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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 

San Francisco, CA 94105 

IN THE MATTER OF: ) 

) 

Black Hills Corp., ) Docket No. 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 pertaining to this case, as described below. 

2. In a letter dated May 13, 2005, Respondent requested an applicability detennination by 

EP A's Clean Air Markets Division ("CAMD") as to whether the Black Hills 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. On February 6,2008, 

EPA made an applicability determination that LVC Unit I was subject to the Acid Rain Program 

as of January 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 self disclosing a 

series of potential violations of the Clean Air Act, 42 U.S.C. § 7401 et seq. ("CAA"), at the 

Facility. The potential violations related to Black Hills' failure to comply with the regulatory 

requirements under 40 C.F.R. Parts 70, 72 and 75, of the Acid Rain Program. The Respondent 

requested that EPA apply the "Final Policy Statement on Incentives for Self-Policing: Discovery, \ 
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Black Hills Corp. 2 

Consent Agreement and Final Order 

Disclosure, Correction, and Prevention of Violations," 65 Fed. Reg. 19618, April 11, 2000 

("Audit Policy") to the self disclosed 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 of sulfur dioxide from the Facility in 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 of Practice Governing the Administrative Assessment of Civil Penalties, 

Issuance of Compliance or Corrective Action Orders, and the Revocation, Termination or 

Suspension of Penn its," 40 C.F.R. Part 22 (64 Fed. Reg. 40138, July 23, 1999)(''the 

Consolidated Rules"). 

6. Section 22.1 3 (b) of the Consolidated! Rules provides that where the parties agree to 

settlement of one or more causes of action before the filing of a complaint, a proceeding may be 

simultaneously commenced and concluded by the issuance of a consent agreement and final 

order. Respondent stipulates that EPA has jurisdiction over this matter. Respondent agrees not 

to contest EPA's jurisdiction with respect to execution of this Consent Agreement, issuance of 

the attached Final Order, or the enforcement thereof. 40 C.F.R. § 22.18. 

7. Respondent hereby waives its right to request a judicial or administrative hearing on 

any issue of law or fact set forth in this 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. 
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Black Hills Corp. 3 

Consent Agreement and Final Order 

§ 22.18(b). 

III. PARTIES BOUND 

9. This Consent Agreement and the attached Final Order apply to and are bindipg upon 

the parties hereto, their officers, agents, successors, and assigns. Any change in ownership or 

corporate status of Respondent including, but not limited to, any transfer of assets or real 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 of Section 113(d)(1) ofCAA. 

11. Respondent voluntarily provided EPA with infonnation in its letters of February 22, 

2008, August 21,2008, September 17,2008, August 17, 2009, and September 9,2009, 

concerning Respondent's request that EP A apply the Audit Policy to the self disclosed violations 

at its Facility. 

12. The violations Respondent disclosed include the following: a) failure to comply with 

all of the requirements of the Acid Rain Program pursuant 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 of representation pursuant to 40 C.F.R. § 72.24; d) failure to notify Region 9 

of Acid Rain certification and to develop certification report for Clark County, Nevada and EP A 

pursuant to 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 conduct manual linearity testing, 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 plan to 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 monitoring plan to 

EPA and to Clark County pursuant to 40 C.F.R. § 75.62(a)(2) and j) 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 by Respondent, EPA has determined that for the 

violations set forth in Paragraph 12 above, Respondent has met each of the following conditions 

set forth in the Audit Policy. 

a. The violations disclosed by Respondent were discovered through an "environmental 

audit" conducted at its Facility, which meets the criteria defined in Section II (B) of the Audit 

Policy. 

b. The violations disclosed by Respondent were identified voluntarily, not through a 

monitoring, sampling or auditing procedure required by statute, regulation, permit, or judicial 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 of a federal, state, or local agency inspection, investigation, or information 

request, notice of a citizen suit, legal complaint by a third party, or imminent discovery by a 

regulatory agency. 

e. Respondent has identified the steps the Facility has taken to promptly correct the 

violation and to prevent a recurrence of the 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 occurred previously within the past three years 

at the same facility and are not part of a pattern of violations on the part of Respondent over the 

past five years. 

g. The violations disclosed by Respondent has 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 at issue do not violate the 

specific tenns of any judicial or administrative order or consent agreement. 

h. Respondent has cooperated with EPA and provided the information necessary for the 

Agency to determine the applicability of the Audit Policy to its disclosure. 

14. The economic benefit ofnon~compliance received by Respondent 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 of the conditions of the Audit Policy and qualifies for a 100 percent 

reduction in the gravity-based component of the civil penalty for the self disclosed 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 of noncompliance that has accrued to 

Respondent of$189 as a result of the violatio~ identified in Paragraph 12 above of is 
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Black Hills Corp. 6 

Consent Agreement and Final Order 

insignificant. Therefore, EP A will not assess a penalty for the economic benefit for 

noncompliance with CAA. Accordingly, the civil penalty assessed in this matter is zero ($0). 

VI. CERTIFICATION 

21. By signing this Consent Agreement, Respondent certifies that it is ~ently in 

compliance with the provisions of the Acid Rain Program identified in Paragraph 12 above. 

Respondent agrees to undertake all necessary actions to continue the internal procedures to 

prevent recurrences of violations of such environmental requirements. 

22. By signing this Consent Agreement, Respondent certifies that the information it has 

supplied concerning this matter was at the time of submission, and is, truthful, accurate, and 

complete for each such submission, response and statement. Respondent realizes that there are 

significant penalties for submitting false or misleading infonnation, including criminal penalties 

for knowing submission of such information, 18 U.s.C. § 1001. 

23. EPA reserves the right to revoke this Consent Agreement and accompanying 

settlement penalty if and to the extent that any infonnation or certification provided by 

Respondent, upon which any civil penalty mitigation granted herein for such violation was based, 

was materially false or inaccurate at the time such information or certification was provided to 

EP A, and EPA reserves the right to assess and collect any and all civil penalties for any violation 

described herein. Such revocation shall be in writing and shall become effective upon receipt by 

Respondent. 

24. This Consent Agreement and the accompanying Final Order resolve only those civil 

claims specified in paragraph 12 above. Nothing herein shall be construed to limit the authority 
Black Hills Corp. 7 

Consent Agreement and Final Order 

of EPA andlor the United States to undertake action against any person, including the 

Respondent, in response to any condition which EPA or the United States determines may 

present an imminent and substantial endangerment to the public health, welfare or the 

environment, enforcement actions for CAA violations not addressed by this CAFO, nor shall 

anything in this Consent Agreement or the accompanying Final Order be construed to resolve, 

and the United States reserves its authority to 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 Order by the EPA Region 9 

Judicial Officer and full satisfaction by the parties, shall be a complete and full civil settlement of 

the specific violation set forth in paragraph 12 above. 

26. The provisions of this Consent Agreement and Final Order shall be binding upon 

Respondent, its agents, successors or assigns. 

27. Respondent's obligations.under this Consent Agreement, if any, shall end when 

Respondent has performed all of the tenns of the Consent Agreement in accordance with the 

Final Order. 

28. Each party to this Consent Agreement shall bear its own costs for this matter, 

including any costs and attorneys fees associated with any past, present, or future proceedings. 

VIII. EFFECTIVE DATE 

29. Respondent and EPA agree to issuance of the attached Final Order. Upon filing, 

EP A will transmit a copy of the 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 of the 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) of EPA's Consolidated Rules of Practice, 64 Fed. Reg. 

40138 (July 23, 1999), and Section 113(d)(1) of the Clean Air Act (CAA); the Consent 

Agreement resolving this matter is hereby approved and incorporated by reference into this Final 

Order. It is hereby ordered that: 

Respondent shall comply with all of the terms of the Consent Agreement, incorporated 

herein by reference, and with the requirements set forth in the CAA and regulations thereunder; 

So Ordered, this 30 day ,of ~ ber ,2009. 

Regional Judicial 0 er 

U.S. Environmental rotection Agency, Region IX 
CERTIFICATE OF SERVICE 

I certify that the original of the foregoing Consent Agreement and Final Order was 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 of the 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 of Regional Counsel (ORC-I) 

U.S. Environmental Protection Agency 

75 Hawthorne Street 

San Francisco, CA 94105 
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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 of the Consent Agreement and Final Order ("CAFO") filed 

pursuant to section 1 13(d) of the Clean Air Act, 42 U.S.c. §§ 7401-7671q. If you 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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