### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 1 of 115 Pg ID 22

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN

UNITED STATES OF AMERICA,
Plaintiff


### v. ) ) ) ) 

# j Civil Action No.:

# J!1

- 1-35

# ~D ) CONSUMERS ENERGY COMPANY, ) ) ) Defendant. ) )

CONSENT DECREE

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TABLE OF CONTENTS

I. JURISDICTION AND VENUE
..................................................................................................3 II. APPLICABILITY
......................................................................................................................3 III. DEFINITIONS
..........................................................................................................................4 IV. NOx EMISSION REDUCTIONS AND CONTROLS
...........................................................l6 V. S02 EMISSION REDUCTIONS AND CONTROLS
.............................................................25 VI. PM EMISSION REDUCTIONS AND CONTROLS
.............................................................34 VII. PROHIBITION ON NETTING CREDITS OR OFFSETS
..................................................42 VIII. WIND POWERCOMMITMENT
.......................................................................................43 IX. ENVIRONMENTAL MITIGATION PROJECTS
.................................................................44 X. CIVIL PENALTY
....................................................................................................................46 XI. RESOLUTION OF CIVIL CLAIMS
.....................................................................................47 XII. PERIODIC REPORTING
.....................................................................................................51 XIII. REVIEW AND APPROVAL OF SUBMITTALS
.............................................................,54 XIV. STIPULATED PENALTIES
...............................................................................................55 XV. FORCE MAJEURE
..............................................................................................................67 XVl. DISPUTE RESOLUTION
...................................................................................................71 XVII. PERMITS
...........................................................................................................................73 XVIII. INFORMATION COLLECTION AND RETENTION
....................................................75 XIX. NOTICES
.............................................................................................................................76 XX. SALES OR TRANSFERS OF OPERATIONAL OR OWNERSHIP INTERESTS
............78 XXI. EFFECTIVE DATE
.............................................................................................................80

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XXII. RETENTION OF JURISDICTION
...................................................................................80 XXIII. MODIFICATION
.............................................................................................................81 XXIV. GENERAL PROVISIONS
...............................................................................................81 XXV. SIGNATORIES AND SERVICE
......................................................................................84 XXVI. PUBLIC COMMENT
.......................................................................................................85 XXVII. TERMINATION
.............................................................................................................86 XXVIII. FINAL JUDGMENT
......................................................................................................87 APPENDIX A- ENVIRONMENTAL MITIGATION PROJECTS APPENDIX B- APPORTIONMENTOF NOx or SOz MASS EMISSIONS AT UNITS WITH COMMON STACKS

II

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WHEREAS, Plaintiff, the United States ofAmerica ("the United States"), on behalfof the United States Environmental Protection Agency ("EPA"), is concurrently filing a Complaint and a Consent Decree, for injunctive reliefand civil penalties pursuantto Sections 113(b)(2) and 167 ofthe Clean Air Act ("CAA'' orthe "Act"), 42 U.S.C. 

### §§ 7413(b)(2) and 7477, alleging that Defendant, Consumers Energy Company ("Consumers") violated the Prevention ofSignificant Deterioration ("PSD") provisions ofPart C ofSubchapter I oftheAct, 42 U.S.C. 

### §§ 7470-7492, the requirements ofTitle V ofthe Act, 42 U.S.C. 

### §§ 7661-766lf, and the PSD and opacity provisions ofthe federally enforceable Michigan State Implementation Plan ("Michigan SIP"); WHEREAS, on March 30, 2007, and October 17, 2008, EPA issued Notices ofViolation and Findings ofViolation ("NOV/FOV") to Consumers with respectto alleged violations ofthe CAA; WHEREAS, the United States provided Consumers and the State ofMichigan with actual notice pertaining to Consumers' alleged violations, in accordance with Section 113 ofthe Act, 42 

## u.s.c. § 7413; WHEREAS, in the Complaint, Plaintiffalleges, inter alia, that Consumers made major modifications to major emitting facilities, failed to obtain the necessary permits and install and operate the controls necessary underthe Actto reduce sulfurdioxide ("S02"), oxides ofnitrogen ("NOx"), and/or particulate matter ("PM") emissions, and failed to meet established opacity standards, at certain electricity generating stations located in Michigan, and that such emissions
can damage human health and the environment; WHEREAS, in the Complaint, Plaintiffalleges claims upon which reliefcan be granted against Consumers under Sections 113 and 167 ofthe Act, 42 U.S.C. 

### §§ 7413 and 7477;

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WHEREAS, the United States and Consumers (collectively, the "Parties") have agreed that settlement ofthis action is in the best interest ofthe Parties and in the public interest, and thatentry ofthis Consent Decree without further litigation is the most appropriate means of resolving this matter; WHEREAS, the Parties anticipate thatthe installation and operation ofpollution control equipmentand practices pursuantto this Consent Decree, refueling ofcertain facilities with natural gas and/orthe retirement ofcertain facilities required by this Consent Decree, will achieve significant reductions ofS02, NOx, and PM emissions and improve air quality; WHEREAS, the Parties have agreed, and this Courtby entering this Consent Decree finds, thatthis Consent Decree has been negotiated in good faith and at arm's length and thatthis Consent Decree is fair, reasonable, in the public interest, and consistentwith the goals ofthe Act; WHEREAS, the Parties agree thatthe United States' filing ofthe Complaintand entry into this Consent Decree constitute diligent prosecution by the United States, under Section 304(b)(I)(B) ofthe CAA, 42 U.S.C. 

### § 7604(b)(I)(B), ofall matters alleged in the Complaintand addressed by this ConsentDecreethrough the Date ofLodging ofthis Consent Decree; WHEREAS, Consumers has cooperated in the resolution ofthese matters; WHEREAS, Consumers denies the violations alleged in the Complaint, and nothing herein shall constitute an admission ofliability; and WHEREAS, the Parties have consentedto entry ofthis ConsentDecree withouttrial of any issues; NOW, THEREFORE, without any admission offact or law, it is hereby ORDERED, ADJUDGED, AND DECREED as follows: 2

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I. JURISDICTION AND VENUE 1. This Court hasjurisdiction overthis action, the subjectmatter herein, and the Parties consenting hereto, pursuantto 28 U.S.C. §§ 1331, 1345, 1355, and 1367, and pursuantto Sections 113 and 167 ofthe Act, 42 U.S.C. §§ 7413 and 7477. Venue is proper under Section 113(b) ofthe Act, 42 U.S.C. § 7413(b), and under 28 U.S.C. § 1391(b) and (c), because violations alleged in the Complaint are alleged to have occurred in, and Consumers conducts business in, thisjudicial district. Consumers consents to and shall not challenge entry ofthis Consent Decree orthis Court'sjurisdiction to enter and enforce this Consent Decree. Except as expressly provided for herein, this Consent Decree shall not create any rights in orobligations of any party otherthan the Parties to this Consent Decree. Except as provided in Section XXVI (Public Comment) ofthis Consent Decree, the Parties consentto entry ofthis Consent Decree without further notice. 

### II. APPLICABILITY 2. Upon entry, the provisions ofthisConsent Decree shall apply to and be binding upon the United States, and upon Consumers and any successors, assigns, or other entities or persons otherwise bound by law. 3. Consumers shall provide a copy ofthis Consent Decree to all vendors, suppliers, consultants, contractors, agents, and any othercompany orother organization retained as ofor after the Date ofEntry to perform any ofthe work required by this Consent Decree. Notwithstanding any retention ofcontractors, subcontractors, or agents to perform any work required under this Consent Decree, Consumers shall be responsible for ensuringthat all work is performed in accordance with the requirements ofthis Consent Decree. In any action to enforce 3

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this Consent Decree, Consumers shall not assert as a defense the failure ofits officers, directors, employees, servants, agents, orcontractors to take actions necessary to comply with this Consent Decree, unless such failure is determined to be a Force Majeure Event in accordance with Section XV (Force Majeure) ofthis Consent Decree. 

### III. DEFINITIONS 4. Forthe purposes ofthis Consent Decree, every term expressly defined by this Section shall have the meaning given that term herein. Every otherterm used in this Consent Decree that is also a term used underthe Act or in a federal regulation implementingthe Act shall mean in this Consent Decree what such term means under the Actorthose regulations. 5. A "30-Day Rolling Average Emission Rate" for a Unit shall be expressed in lb/mmBTU and calculated in accordance with the following procedure: first, sum the total pounds ofNOx or S02 emitted from the Unit during the current Unit Operating Day and the previous 29 Unit Operating Days; second, sum the total heat inputto the Unit in mmBTU during the current Unit Operating Day and the previous 29 Unit Operating Days; and third, divide the total number ofpounds ofNOx or S02 emitted during the 30 Unit Operating Days by the total heat input during the 30 Unit Operating Days. A new 30-Day Rolling Average Emission Rate shall be calculated for each new Unit Operating Day. Each 30-Day Rolling Average Emission Rate shall include all emissions that occurduring all periods within any Unit Operating Day, including emissions from startup, shutdown, and Malfunction, except as otherwise provided by Section XV (Force Majeure). 6. A "90-Day Rolling Average Emission Rate" for a Unit shall be expressed in lb/mmBTU and calculated in accordance with the following procedure: first, sum the total 4

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pounds ofNOx or S02 emitted from the Unit during the current UnitOperating Day and the previous 89 Unit Operating Days; second, sum the total heatinputto the Unit in mmBTU during the currentUnit Operating Day and the previous 89 Unit OperatingDays; and third, divide the total numberofpounds ofNOx or S02 emitted during the 90 Unit Operating Days by the total heat input during the 90 Unit Operating Days. A new 90-Day Rolling Average Emission Rate shall be calculated for each new Unit Operating Day. Each 90-Day Rolling Average Emission Rate shall include all emissions that occur during all periods within any Unit Operating Day, including emissions from startup, shutdown, and Malfunction, exceptas otherwise provided by Section XV (Force Majeure). 7. A "365-Day Rolling Average Emission Rate" for a Unit shall be expressed in lb/mmBTU and calculated in accordance with the following procedure: first, sum the pounds of the pollutant in question emitted from the Unit during the mostrecent Unit Operating Day and the previous 364 Unit Operating Days; second, sum the total heat inputto the Unit in mmBTU duringthe most recent Unit Operating Day and the previous 364 Unit Operating Days; and third, divide the total number ofpounds ofthe pollutantemitted during the 365 Unit Operating Days by the total heat input duringthe 365 Unit Operating Days. A new 365-Day Rolling Average Emission Rate shall be calculated for each new Unit Operating Day. Each 365-Day Rolling Average Emission Rate shall include all emissions that occurduring all periods ofoperation, including startup, shutdown, and Malfunction, exceptas otherwise provided by Section XV (Force Majeure).

5

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8. "Baghouse" means a full stream (fabric filter ormembrane) particulate emissions control device. Full stream is defined as capturing the entire stream ofexhaust gas with no concurrent by-pass. 9. "BoilerIsland" means a Unit's (a) fuel combustion system (including bunker, coal pulverizers, crusher, stoker, and fuel burners); (b) combustion air system; (c) steam generating system (firebox, boilertubes, and walls); and (d) draft system (excludingthe stack), all as further described in "Interpretation ofReconstruction," by John B. Rasnic, U.S. EPA (November 25, 1986) and attachments thereto. I0. "Campbell" means Consumers' J.H. Campbell Generating Plant consisting of three electric utility steam-generating units designated as Unit I (260 MW), Unit 2 (360 MW), and Unit 3 (835 MW) and related equipment, located in West Olive, Ottawa County, Michigan. Campbell Unit 3 is co-owned by Consumers (approximately 93%) along with Wolverine Power Supply Cooperative and the Michigan Public Power Association. 11. "Capital Expenditures" means all capital expenditures, as defined by Generally Accepted Accounting Principles ("GAAP"), as those principles exist atthe Date ofEntry ofthis Consent Decree, excluding the cost ofinstalling orupgrading pollution control devices. 12. "CEMS" or "Continuous Emission Monitoring System," means, for obligations involving the monitoring ofNOx and S02 emissions underthis ConsentDecree, the devices defined in 40 C.F.R. § 72.2 and installed and maintained as required by 40 C.F.R. Part 75. 13. "Clean Air Act" or "CAA'' or "Act" means the federal Clean Air Act, 42 U.S.C. §§ 7401-767lq, and its implementing regulations.

6

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14. "Cobb"means, for purposes ofthis Consent Decree, Consumers' B.C. Cobb Generating Plant consisting oftwo electric utility steam-generating units designated as Unit4 (160 MW) and Unit 5 (160 MW) and related equipment, located in Muskegon, Muskegon County, Michigan. 15. "ConsentDecree" means this Consent Decree and the Appendices hereto, which
are incorporated into the ConsentDecree. 16. "Consumers"or "Defendant" means Consumers Energy Company. 17. "Consumers System" means the Campbell, Cobb, Karn, Weadock, and Whiting facilities as defined herein. 18. "Continuously Operate" or "Continuous Operation" means that when a pollution control technology or combustion control is required to be used at a Unitpursuantto this Consent Decree (including, but not limited to, SCR, FGD, DSI, ESP, Baghouse, orLowNOx Combustion System), it shall be operated at all times thatthe Unit it serves is in operation (except (a) the SCRs on Campbell Units 2 and 3 need not be operated during scheduled maintenance on the applicable Unit's Urea Based Ammonia System and (b) as otherwise provided by Section XV (Force Majeure)), consistentwith the technological limitations, manufacturers' specifications, good engineering and maintenance practices (including Campbell Unit 2 and Unit 3 scheduled UreaBased Ammonia System outages), and good airpollution control practices for minimizing emissions (as defined in 40 C.F.R. 

### § 60.11(d)), as applicable, for such equipment and the Unit. 19. "Date ofEntry" means the date this Consent Decree is approved or signed by the United States District CourtJudge. 7

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20. "Date ofLodging" means the date this Consent Decree is filed for lodging with the Clerk ofthe Court for the United States District Court for the Eastern District ofMichigan. 21. "Day" means calendarday unless otherwise specified in this ConsentDecree. 22. "Dry Sorbent Injection" or"DSJ" means a process in which a sorbent is pneumatically injected into the ducting downstream ofwhere the coal is combusted and flue gas is produced, and upstream ofthe PM Control Device. 23. "Electrostatic Precipitator" or "ESP" means a device for removing particulate matterfrom combustion gases by imparting an electric charge to the particles and then attracting them to a metal plate orscreen ofopposite charge before the combustion gases are exhaustedto the atmosphere. 24. "Emission Rate" for a given pollutant meansthe numberofpounds ofthat pollutant emitted permillion British Thermal Units ofheat input (lb/mmBTU), calculated in accordance with this Consent Decree. 25. "Environmental Mitigation Projects" or "Projects" means the projects set forth in Section IX (Environmental Mitigation Projects) and Appendix A ofthis Consent Decree. 26. "EPA" meansthe United States Environmental Protection Agency. 27. "Flue Gas Desulfurization System" or "FGD" means a pollution control device that employs flue gas desulfurization technology, including an absorber orabsorbers utilizing lime orlimestone, ora sodium based material, for the reduction ofS02 emissions. 28. "Force Majeure" means Force Majeure as defined in Section XV (Force Majeure) ofthis Consent Decree.

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29. "Fossil Fuel" means any hydrocarbon fuel, including coal, petroleum coke, petroleum oil, or natural gas. 30. "Full Stream Operation" is defined as the design configuration ofa control device such that it captures the entire stream ofexhaust gas with no concurrent by-pass. 31. "Greenhouse Gases" means the airpollutant defined at40 C.F.R. §86.1818-12(a)
as ofthe Date ofLodging ofthis Consent Decree as the aggregate group ofsix greenhouse gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. This definition continues to apply even if40 C.F.R. 

### § 86.1818-12(a) is subsequently revised, stayed, vacated orotherwise modified. 32. "Improved Unit" for NOx means a Consumers System Unit equipped with an SCR
or scheduled under this Consent Decree to be equipped with an SCR. A Unit may be an Improved Unit for one pollutantwithoutbeing an Improved Unit for anotherpollutant. 33. "Improved Unit" for S02 means a Consumers System Unit equipped with an FGD
or scheduled underthis Consent Decree to be equipped with an FGD. A Unit may be an Improved Unit for one pollutantwithout being an Improved Unit for another pollutant. 34. "Karn," for purposes ofthis Consent Decree, means Consumers' D.E. Karn Generating Plant consisting oftwo electric utility steam-generating units designated as Unit I (255 MW) and Unit 2 (260 MW) and related equipment, located in Essexville, Bay County, Michigan. Karn does not include the oil-fired electricity generating units designated as Karn Units 3 and 4, also located in Essexville, Bay County, Michigan. 35. "Karn Units 3 and 4"means Consumers' oil-fired Units 3 and 4, in Essexville, Bay County, Michigan. 9

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36. "KW" means Kilowatt orone thousand watts net. 37. "lb/mmBTU" means one pound permillion British Thermal Units. 38. "LowNOx Combustion System" means burners and associated combustion air control equipment, including OverFire Air ifspecified, which control mixing characteristics of Fossil Fuel and oxygen, thus restraining the formation ofNOx during combustion offuel in the boiler. 39. "Malfunction" means a failure to operate in a normal orusual manner by any air pollution control equipment, process equipment, ora process, which is sudden, infrequent, and not reasonably preventable. Failures that are caused in part by poor maintenance orcareless operation are not Malfunctions. 40. "Michigan SIP" means the Michigan State Implementation Plan, and any amendments thereto, as approved by EPA pursuantto Section 110 ofthe Act, 42 U.S.C. 

### § 741 0. 41. "MW" means a megawatt or one million watts net. 42. "National AmbientAir Quality Standards" or "NAAQS" means national ambient air quality standards promulgated pursuantto Section 109 ofthe Act, 42 U.S.C. 

### § 7409. 43. "Natural Gas" means natural gas received directly orindirectly through a connection to an interstate pipeline transporting natural gas governed by a tariffapproved by the Federal Energy Regulatory Commission. The Parties recognize thatNatural Gas is expected to contain no more than 0.5 grains ofsulfurper 100 standard cubic feet ofNatural Gas. 44. "Netting" shall mean the process ofdetermining whether a particularphysical change orchange in the method ofoperation ofa major stationary source results in a "net

10

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emissions increase" or "net significantemissions increase" as those terms are defined at40 C.F.R. 

### § 52.21(b)(3)(i) and (ii) and in the Michigan SIP. 45. "NOx'' means oxides ofnitrogen, measured in accordance with the provisions of this Consent Decree. 46. "NOx Allowance" means an authorization to emita specified amount ofNOx that is allocated or issued under an emissions trading ormarketable permitprogram ofany kind established under the Clean Air Act or the Michigan SIP; provided, however, that with respectto any such program thatfirst applies to emissions occurring after December 31, 2011, a "NOx Allowance" shall include an allowance created and allocated to a Consumers System Unitunder such program only for control periods starting on orafterthe fourth anniversary ofthe Date of Entry ofthis Consent Decree. 47. "NonattainmentNSR" means the new source review program within the meaning ofPart D ofSubchapter I ofthe Act, 42 U.S.C. 

### §§ 7501-7515 and 40 C.F.R. Part51, and corresponding provisions ofthe federally enforceable Michigan SIP. 48. "Operational or Ownership Interest" means part orall ofConsumers' legal or equitable operational or ownership interest in any operating, non-Retired Unit. The parties recognize that underthis definition, Section XX (Sales orTransfers ofOperational or Ownership Interests) ofthis Consent Decree does not apply to salvage, scrap, ordemolition ofa Retired Unit. 49. "Operating Day" means any calendarday on which a Unitfires Fossil Fuel.

11

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50. "OtherUnit" means any Unit within the Consumers System that is not an Improved Unit for the pollutant in question. A Unit may be an Improved Unit for NOx and an Other Unit for S02, and vice versa. 51. "OverFire Air" or "OFA" mean an in-furnace staged combustion control to reduce NOx emissions. 52. "Parties" means the United States ofAmerica on behalfofEPA, and Consumers. "Party" means one ofthe named "Parties." 53. "PM" means total filterable particulate matter, measured in accordance with the provisions ofthis Consent Decree. 54. "PM Continuous Emission Monitoring System" or "PM CEMS" means, for obligations involving the monitoring ofPMemissions under this Consent Decree, the equipment that samples, analyzes, measures, and provides, by readings taken at frequent intervals, an electronic and/orpaper record ofPM emissions. 55. "PM Control Device" means any device, including an ESP or Baghouse, which reduces emissions ofPM. 56. "PM Emission Rate" means the number ofpounds ofPM emitted per million BTU ofheat input (lb/mmBTU). 57. "Prevention ofSignificant Deterioration" or "PSD" means the new source review program within the meaning ofPart C ofSubchapter I oftheAct, 42 U.S.C. §§ 7470-7492 and 40 C.F.R. Part 52, and corresponding provisions ofthe federally enforceable Michigan SIP. 58. "ProjectDollars" means Consumers' expenditures and payments incurred or made in carrying outthe Environmental Mitigation Projects identified in Section IX 12

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(Environmental Mitigation Projects) ofthis Consent Decree to the extentthat such expenditures
orpayments both: (a) comply with the requirements set forth in Section IX (Environmental Mitigation Projects) and Appendix A ofthis Consent Decree, and (b) constitute Consumers' direct payments for such projects (or in the case ofland acquisition ordonation projectsrequired by AppendixA,the EPA-approved assessed value ofreal estate contributed for such projects), or Consumers' external costs for contractors, vendors, and equipment. 59. "Refuel toNatural Gas" or "Refueledto Natural Gas" means, solely for purposes ofthis Consent Decree, the modification ofa Unit such thatthe modified unit generates electricity solely through the combustion ofNatural Gas. Nothing herein shall preventthe reuse ofany equipmentat any existing Unitprovided that Consumers applies for, and obtains, all required permits, including, ifapplicable, a PSD orNonattainmentNSRpermit. 60. "Retire"or"Retirement"meansthatConsumers shall permanently shut down and
cease to operate the Unit suchthatthe Unitcannotphysically orlegally burn Fossil Fuel, and that Consumers shall comply with applicable state and federal requirements for permanently ceasing operation ofthe Unitas a Fossil Fuel-fired electric generating Unit, including removing the Unit from Michigan's air emissions inventory, and amending all applicable permits so as to reflectthe permanent shutdown status ofsuch Unit. Consumers can only subsequently operate such a Unit ifit is Refueled to Natural Gas withinthe meaning ofthis ConsentDecree, and Consumers obtains any and all required CAA permit(s) for the Refueled to Natural Gas Unit, including but not limited to an appropriate permitpursuantto CAA Subchapter I, Parts C and D, and pursuant to the applicable Michigan SIP provisions implementingCAA SubchapterI.

13

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61. "Selective Catalytic Reduction" or "SCR" means an air pollution control device for reducing 

### NOx emissions in which ammonia 

### ("NH3") is added to the flue gas and then passed through layers ofa catalystmaterial. The ammonia and 

### NOx in the flue gas stream react on the surface ofthe catalyst, forming nitrogen ("Nz") and water vapor. 

### 62. 

### "SOz" means sulfur dioxide, measured in accordance with the provisions ofthis Consent Decree. 63. 

### "SOz Allowance" means an authorization to emit a specified amount of

### SOz that is allocated or issued under an emissions trading ormarketable permitprogram ofany kind established under the Clean AirActor the Michigan SIP; provided, however, that with respect to any such program that first applies to emissions occurring after December 

### 3I, 20II, an "S02 Allowance" shall include an allowance created and allocated to a Consumers System Unitunder such program only for control periods starting on or after the fourth anniversary ofthe Date of Entry ofthis Consent Decree. 64. "State" means the State ofMichigan. 65. "State Implementation Plan" or "SIP" means regulations and other materials promulgated by a state for purposes ofmeeting the requirements ofthe Act that have been approved by EPA pursuantto Section 

### IIO ofthe Act, 

### 42 U.S.C. 

### § 

### 74IO. 66. "Surrender" or "SurrenderofAllowances" means, for purposes of

### SOz or

### NOx Allowances, permanently surrendering allowances from the accounts administered by EPA and Michigan for all Units in the Consumers System, so that such allowances can never be used thereafter to meet any compliance requirements underthe Act, a SIP, orthis Consent Decree.



### I4

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67. "System-Wide Annual NOxTonnage Limitation" means the limitations, as specified in this Consent Decree, on the number oftons ofNOxthat may be emitted from Campbell, Cobb, Kam, Weadock, and Whiting, collectively, during the relevant calendaryear (i.e., January I through December 31), and shall include all emissionsofNOxduring all periods ofoperations, including startup, shutdown, and Malfunction. 68. "System-Wide Annual S02Tonnage Limitation" means the limitations, as specified in this ConsentDecree, on the number oftons ofS02 that may be emitted from Campbell, Cobb, Kam, Weadock, and Whiting, collectively, during the relevant calendaryear (i.e., January 1through December 31), and shall include all emissions ofS02during all periods ofoperations, including startup, shutdown, and Malfunction. 69. ''Title V Permit" means the permitrequired ofConsumers' major sources pursuantto SubchapterV ofthe Act, 42 U.S.C. §§ 7661-7661e. 70. "Unit"means collectively,the coal pulverizer, stationary equipmentthatfeeds coal tothe boiler, the boilerthat produces steam for the steam turbine, the steamturbine, the generator, the equipment necessary to operate the generator, steam turbine, and boiler, and all ancillary equipment, including pollution control equipment and systems necessary for production ofelectricity. An electric steam generating station may comprise one ormore Units. 71. "UreaBased Ammonia System"or "UBAS" means a type ofammoniafeed system for SCRs where solid urea pellets are stored in a silo. Upon use, the solid urea is heated to liquid, thermally decomposed to ammonia, and injected into the SCR as the reagent for the NOx reduction reaction.

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72. "Weadock" means, for purposes ofthis Consent Decree, Consumers' J.C. Weadock Generating Plant consisting oftwo electric utility steam-generating Units designated as Unit 7 (155 MW) and Unit 

### 8 (155 MW) and related equipment, located in Essexville, Bay County, Michigan. 73. "Whiting"means, for purposes ofthis ConsentDecree, Consumers' Whiting Generation Station consisting ofthree electric utility steam-generating Units designated as Unit I (l02 MW), Unit 2 (102 MW), and Unit 3 (124 MW) and related equipment, located in Luna Pier, Monroe County, Michigan. 74. "Wind Power" means capacity installed by Consumers orPowerPurchase Agreements ("PPAs") entered into by Consumers for capacity using wind turbines. IV. NOx EMISSION REDUCTIONSAND CONTROLS A. Unit-SpecificNOxRequirements atCampbellUnits 1, 2 and 3 75. Commencing upon the Date ofEntry, Consumers shall Continuously Operate the existing LowNOx Combustion System (including OFA) atCampbell Unit 1. 76. Commencing no laterthan 365 Operating Days afterthe Date ofEntry and continuing thereafter, Consumers shall Continuously Operate the Low NOx Combustion System (including OFA) at Campbell Unit I so that it achieves and maintains a 365-Day Rolling Average Emission Rate for NOx ofno greaterthan0.220 lb/mmBTU. 77. Commencing upon the Date ofEntry and continuing thereafter, Consumers shall Continuously Operate an SCR at Campbell Unit 2.

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78. Commencing no laterthan 60 Operating Days afterthe Date ofEntry and continuing thereafter, Consumers shall continuously achieve and maintain a 30-Day Rolling Average Emission Rate for NOx ofno greaterthan 0.100 lb/mmBTU at Campbell Unit 2. 79. Commencing no laterthan 180 Operating Days afterthe Date ofEntry and continuing thereafter, Consumers shall continuously achieve and maintain a 90-Day Rolling Average Emission Rate for NOx ofno greaterthan 0.080 lb/mmBTU at Campbell Unit 2. 80. Commencing upon the Date ofEntry and continuing thereafter, Consumers shall Continuously Operate an SCR at Campbell Unit 3. 81. Commencing no later than 60 Operating Days afterthe Date ofEntry and continuing thereafter, Consumers shall continuously achieve and maintain a 30-Day Rolling Average Emission Rate for NOx ofno greaterthan 0.100 lb/mmBTU at Campbell Unit 3. 82. Commencing no later than 180 Operating Days afterthe Date ofEntry and continuing thereafter, Consumers shall continuously achieve and maintain a 90-Day Rolling Average Emission Rate for NOx ofno greaterthan0.080 lb/mmBTU at Campbell Unit 3. 83. Campbell Unit 1and Unit 2 exhaustto a common stack where all mass emissions
are monitored. Accordingly, so long as the two Units exhaustto a common stack, the procedures ofAppendix B shall be used for purposes ofapportionment ofthe common stack NOx mass emissions and heat input to individual Campbell Units l and 2 for purposes ofdetermining NOx lb/mmBtu emission rates. Consumers reserves the rightto monitorNOx mass emissions at each unit individually ifit becomes technically feasible to do so.

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B. Unit-Specific NOx 

### Requirements atKarn Units 1and 2 84. Commencing upon the Date ofEntry, Consumers shall Continuously Operatethe existing SCR at Kam Unit I. 85. Commencing no laterthan 60 Operating Days afterthe Date ofEntry and continuingthereafter, Consumers shall Continuously Operate the SCR at Kam Unit I so as to achieve and maintain a 30-Day Rolling Average Emission Rate for NOx ofno greaterthan 0.080 lb/mmBTU. 86. Commencing upon the Date ofEntry, Consumers shall Continuously Operate the existing SCR at Kam Unit 2. 87. Commencing no later than 60 Operating Days afterthe Date ofEntry and continuing thereafter, Consumers shall Continuously Operate the SCR at Kam Unit 2 so as to achieve and maintain a 30-Day Rolling Average Emission Rate for NOx ofno greaterthan 0.080 lb/mmBTU. 

### C. Unit-Specific NOx 

### Requirements atCobbUnits 4 and 5 88. Commencing upon the Date ofEntry, and continuing until the Unit is Retired or Refueled to Natural Gas pursuantto this ConsentDecree, Consumers shall Continuously Operate the existing LowNOx Combustion System (including OFA) at Cobb Unit 5. 89. Commencing no later than 365 Operating Days after the Date ofEntry, and continuing until the Unit is Retired or Refueled to Natural Gas pursuantto this Consent Decree, Consumers shall Continuously Operate the LowNOx Combustion System (including OFA) at Cobb Unit 5 so that it achieves and maintains a 365-Day Rolling Average Emission Rate for NOx ofno greaterthan0.220 lb/mmBTU. I8

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 22 of 115 Pg ID 43

90. By no later than April 15,2016, Consumers shall (a) either Retire orRefuel to Natural Gas Cobb Unit 4 and (b) eitherRetire or Refuel to Natural Gas Cobb Unit 5. No later than one yearfrom the Date ofEntry, Consumers shall notify Plaintiffin writing which optionRetire or Refuel to Natural Gas- it elects for Cobb Units 4 and 5. IfConsumers Refuels to Natural Gas Cobb Units 4 and/or 5, Consumers shall permanently cease burning coal atthe unit(s) and shall continuously achieve and maintain a 365-Day Rolling Average Emission Rate for NOx ofno greaterthan0.200 lb/mmBTU. Furthermore, each such Refueled Unit shall not exceed a capacity factor of20.0 percent in any single calendaryear, and shall not exceed a threeyear rolling average capacity factor of 10.0 percent, based on an electrical output capacity of 135 MW gross per Unit. D. Unit-Specific 

### NOx Requirements at Weadock Units 7 and 8 91. Commencing upon the Date ofEntry, and continuing until the Unit is Retired pursuantto this ConsentDecree, Consumers shall Continuously Operate the existing Low NOx Combustion Systems at Weadock Units 7 and 8. 92. Commencing no later than 365 Operating Days afterthe Date ofEntry, and continuing until the Unit is Retired pursuantto this ConsentDecree, Consumers shall Continuously Operate the Low NOx Combustion Systems at Weadock Units 

### 7 and 

### 8 so that each Unit achieves and maintains a 365-Day Rolling Average Emission Rate for NOx ofno greater than0.340 lb/mmBTU. 93. Weadock Units 

### 7 and 

### 8 exhaustthrough a common duct to a common stack. Accordingly, so long as the two Units exhaustto a common duct, notwithstanding any other provision, any NOx Emission Rates setforth under this Consent Decree as applicable to each of 19

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 23 of 115 Pg ID 44

Weadock Unit 7 and Unit 8 shall be measured and calculated for the two Units together as ifthey
were a single Unit (e.g., where the ConsentDecree specifiesthat Consumers shall operate Weadock Unit 7 and Unit 8to achieve and maintain a 365-Day Rolling Average Emissions Rate for NOx of0.34 lb/mmBTU ateach Unit, the emissions rate calculation for the Weadock Units will be based on the total NOx emissions and heat input for the two Units together measured at the common duct). A violation ofany such rate based on common duct measurements shall be presumed to be two violations, unless Consumers proves to EPA's satisfaction thatthe violation is due solely to the mal-performance ofone ofthe two Units. The procedures in Appendix Bare
an acceptable means ofdemonstrating that a violation based on the common duct measurements is due solely to the mal-performance ofone ofthe two Units. 94. By no later than April15, 2016, Consumers shall Retire Weadock Units 7 and 8. E. Unit-Specific 

### NOx Requirements at Whiting Units 1, 2, and 3 95. Commencing upon the Date ofEntry, and continuing until the Unitis Retired pursuantto this Consent Decree, Consumers shall Continuously Operate the existing Low NOx Combustion Systems at Whiting Units I, 2, and 3. 96. Commencing no laterthan 365 Operating Days after the Date ofEntry, and continuing until the Unit is Retired pursuantto this Consent Decree, Consumers shall Continuously Operate the Low NOx Combustion Systems at Whiting Units 1, 2, and 3 so that each Unit achieves and maintains a 365-Day Rolling Average Emission Rate for NOx ofno greaterthan0.280 lb/mmBTU. 97. By no laterthan April 15, 2016, Consumers shall Retire Whiting Units 1, 2, and 3.

20

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 24 of 115 Pg ID 45

F. System-WideAnnual NOx TonnageLimitations 98. The Consumers System, collectively, shall operate so as not to exceed the following System-Wide Annual

### NOx Tonnage Limitations: 

### Forthe CalendarYearSpecified Below: System-Wide Annual NOx Tonnage Limitation: 2015 15,245 2016 9,319 2017 and continuing each calendaryear 6,912 [cap shall adjust to 6,600 ifConsumers thereafter electsto Retire Cobb 4 and 5**L-----------~~~~~-----------~------** 

### G. Monitoring ofNOxEmissions 99. In determining a 30-Day Rolling Average Emission Rate for

### NOx, a 90-Day Rolling Average Emission Rate for

### NOx, or a 365-Day Rolling Average Emission Rate for

### NOx, Consumers shall use CEMS in accordance with the procedures of40 C.P.R. Part 75, exceptthat the 

### NOx emissions data need not be bias adjusted and the missing data substitution procedures of 40 C.P.R. Part 75 shall not apply. Ifapplicable, diluentcapping (i.e., 

### 5%C02) will be applied to the

### NOx emission rate for any hours where the measured C02 concentration is less than 5% following the procedures in 40 C.P.R. Part 75, Appendix F, Section 3.3.4.1. 

### I00. Forpurposes ofcalculating the System-Wide Annual 

### NOx Tonnage Limitations, Consumers shall use CEMS in accordance with the procedures specified in 40 C.P.R. Part 75, which includes the requirements associated with the concepts ofbias adjustments and missing data substitution. 

### H. Use and SurrenderofNOx Allowances 1 01. Except as may be necessary to comply with Section XIV (Stipulated Penalties), Consumers shall not use 

### NOx Allowances to comply with any requirementofthis Consent 21

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 25 of 115 Pg ID 46

Decree, including by claiming compliance with any emission limitation required by this Consent Decree by using, tendering, orotherwise applyingNOx Allowances to offset any excess emissions. I02. Except as provided in this Consent Decree, Consumers shall not sell, bank, trade,
or transfer any NOx Allowances allocated to the Consumers System Units. Nothing in this Consent Decree shall restrict Consumers' ability to transferNOx Allowances among its own facility orgeneral accounts. I03. Beginningwith the year 2014 compliance period, and continuing each year thereafter, Consumers shall Surrender all NOx Allowances allocated to the Consumers System for that year's compliance period that Consumers does not need in orderto meet its own federal and/or state CAA regulatory requirements for the Consumers System Units. However, NOx Allowances allocated to the Consumers System may be used by Consumers to meet its own federal and/or state CAA regulatory requirements for such Units. 104. Nothing in this Consent Decree shall prevent Consumers from purchasing or otherwise obtaining NOx Allowances from another source for purposes ofcomplying with federal and/or state CAA regulatory requirements to the extent otherwise allowed by law. 105. The requirements ofthis Consent Decree pertaining to Consumers' use and SurrenderofNOx Allowances are permanent injunctions not subjectto any termination provision ofthis Consent Decree. I. Super-Compliant 

### NOx Allowances 106. Notwithstanding Section IV.H (Use and SurrenderofNOx Allowances) ofthis Consent Decree, beginning with the year 2014 and continuing in each yearthereafter, Consumers 22

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 26 of 115 Pg ID 47

may sell, bank, use, trade, ortransferNOx Allowances allocated to the Consumers System that
are made available in that year's compliance period solely as a result of:
a. the installation and operation ofany NOx pollution control that is not otherwise required by, ornecessary to maintain compliance with, any provision ofthis Consent Decree, and is not otherwise required by law; b. the use ofSCRpriorto the date established by this Consent Decree; or
c. achievement and maintenance ofan Emission Rate below a 365-Day Rolling Average Emission Rate for NOx at the following Units: (i) at Campbell Unit I: 0.200 lb/mmBTU; (ii) at Campbell Unit 2: 0.070 lb/mmBTU; (iii) at Campbell Unit 3: 0.070 lb/mmBTU; (iv) at Cobb Unit 5: 0.200 lb/mmBTU; (v) at Kam Unit I: 0.070 lb/mmBTU; (vi) at Kam Unit 2: 0.070 lb/mmBTU; provided that Consumers is also in compliance for that calendaryear with all emission limitations for NOx set forth in this Consent Decree. Consumers shall timely report the generation ofsuch super-compliantAllowances in accordance with Section 

### XII (Periodic Reporting) ofthis Consent Decree. 

### J. Method for Surrenderof

### NOx Allowances I07. Consumers shall Surrender, ortransferto a non-profit third-party selected by Consumers for Surrender, all NOx Allowances required to be Surrendered pursuant to Section 

### IV.H (Use and SurrenderofNOx Allowances) ofthis Consent Decree by June 30 ofthe immediately following calendaryear. Such Surrenderneed not include the specific NOx Allowances that were allocated to Consumers System Units, so long as Consumers Surrenders

23

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 27 of 115 Pg ID 48

NOx Allowances that are from the same year oran earlieryear and that are equal to the number required to be Surrendered under this Consent Decree. I08. Ifany NOx Allowances required to be Surrendered underthis Consent Decree are transferred directly to a non-profit third-party, Consumers shall include a description ofsuch transfer in the next report submitted to EPA pursuantto Section XII (Periodic Reporting) ofthis Consent Decree. Such report shall: (a) identify the non-profit third-party recipient(s) ofthe NOx Allowances and listthe serial numbers ofthe transferred NOx Allowances; and (b) include a certification by the third-party recipient(s) stating thatthe recipient(s) will not sell, trade, or otherwise exchange any ofthe NOx Allowances and will not use any ofthe NOx Allowancesto meet any obligation imposed by any environmental law. No later than the third periodic report due afterthe transfer ofany NOx Allowances, Consumers shall include a statementthatthe thirdparty recipient(s) Surrendered the NOx Allowances for permanent Surrenderto EPA in accordance with the provisions ofthe following Paragraph I09 within one yearafter Consumers transferred the NOx Allowances to them. Consumers shall not have complied with the NOx Allowance Surrender requirements ofthis Paragraph I08 until all third-party recipient(s) have actually Surrendered the transferred NOx Allowances to EPA. I09. Forall NOx Allowances required to be Surrendered, Consumers orthe third-party recipient(s) (as the case may be) shall first submit aNOx Allowance transferrequestto EPA's Office ofAir and Radiation's Clean AirMarkets Division directing the transfer ofsuchNOx Allowances to the EPA Enforcement SurrenderAccount orto any other EPA accountthat EPA may direct in writing. Such NOx Allowance transfer requests may be made in an electronic
mannerusing EPA's Clean AirMarkets Division Business System or similar system provided by 

### 24

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 28 of 115 Pg ID 49

EPA. As part ofsubmitting these transfer requests, Consumers orthe third-party recipient(s) shall irrevocably authorize the transfer ofthese NOx Allowances and identify- by name of account and any applicable serial or other identification numbers or station names- the source and location ofthe NOx Allowances being Surrendered. V. 

### S02 EMISSION REDUCTIONS AND CONTROLS A. Unit-Specific 

### S02 Requirements at Campbell Units 1, 2, and 3 II0. Commencing no laterthan 60 Operating Days after the Date ofEntry, Consumers shall Continuously OperateCampbell Units I and 2 so thatthe Units achieve and maintain a combined 30-Day Rolling Average Emission Rate for S02 ofno greaterthan 1.00 lb/mmBTU. Ill. Commencing no laterthan 60 Operating Days after the Date ofEntry, Consumers shall Continuously OperateCampbell Unit 3 so thatthe Unit achieves and maintains a 30-Day Rolling Average Emission Rate for S02 ofno greaterthan 1.00 lb/mmBTU. 112. Consumers shall install an FGD at Campbell Unit 3 and, commencing on December 31, 2016, Consumers shall Continuously Operate such FGD. Commencing no later than 60 Operating Days thereafter, Consumers shall Continuously Operate such FGD so as to achieve and maintain a 30-Day Rolling Average Emission Rate for S02 ofno greaterthan 0.085 lb/mmBTU. Commencing no later than 365 Operating Days after December 31,2016, Consumers shall Continuously Operate such FGD so as to achieve and maintain a 365-Day Rolling Average Emission Rate for S02 ofno greaterthan 0.070 lb/mmBTU. 113. Consumers shall install DSI at Campbell Unit 1and, commencing on June 30, 2016, Consumers shall Continuously Operate such DSI. Commencing no laterthan 60 Operating Days afterJune 30, 2016, Consumers shall Continuously Operate DS1 at Campbell 25

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 29 of 115 Pg ID 50

Unit 1so as to achieve and maintain a 30-Day Rolling Average Emission Rate for S02 ofno greaterthan 0.350 lb/mmBTU. Commencing no laterthan 180 Operating Days afterJune 30, 2016, Consumers shall Continuously Operate DSI atCampbell Unit 1so as to achieve and maintain a 90-Day Rolling Average Emission Rate for S02 ofno greaterthan 0.290 Jb/mmBTU. 114. Consumers shall install DSI at Campbell Unit 2 and, commencing on June 30, 2016, Consumers shall Continuously Operate such DSI. Commencing no laterthan 365 Operating Days after June 30, 2016, Consumers shall Continuously Operate DSI at Campbell Unit 2 so as to achieve and maintain a 365-Day Rolling Average Emission Rate for S02 ofno greaterthan 0.320 lb/mmBTU. 115. Campbell Unit 1and Unit 2 exhaustto a common stack where all mass emissions
are monitored. Priorto June 30, 2016, so long as the two Units exhaustto a common stack, notwithstanding any otherprovision, any S02 Emission Rates set forth underthis Consent Decree as applicable to each ofCampbell Unit I and Unit 2 shall be measured and calculated for the two Units together as ifthey were a single Unit. For example, where the Consent Decree specifies Campbell Unit 1and Unit 2 shall achieve and maintain a 30-Day Rolling Average Emissions Rate for S02 of 1.00 lb/mmBTU, the emissions rate calculation for the Campbell Units will be based on the total S02 emissions and heat input for the two Units together measured at the common stack. A violation ofany such rate based on common stack measurements shall be presumed to be two violations, unless Consumers proves to EPA's satisfaction thatthe violation is due solely to the mal-performance ofone ofthe two units. 116. By June 30, 2016, Consumers shall either (a) install, certify, and operate unit level S02 CEMS on Campbell Units 1and 2 and follow the procedures in Appendix B to calculate 26

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 30 of 115 Pg ID 51

unit level S02 mass emissions or (b) install, certify, and operate unit level S02 CEMS and flow CEMS on Campbell Units 1and 2 to allowthe direct determination ofunit level S02 mass emissions. Installation and certification ofthe S02 CEMS and flow CEMS, as applicable, shall follow the procedures of40 C.F.R. Part 75, Appendix A. 

### B. Unit-Specific S02 Requirements at Karn Units 1and 2 117. Consumers shall install an FGD at Karn Unit 1and, commencing on December 31, 2014, Consumers shall Continuously Operate such FGD. Commencing no laterthan 60 Operating Days thereafter, Consumers shall Continuously Operate such FGD so as to achieve and maintain a 30-Day Rolling Average Emission Rate for S02 ofno greaterthan 0.090 lb/mmBTU. Commencing no later than 365 Operating Days after December 31, 2014, Consumers shall Continuously Operate such FGD so as to achieve and maintain a 365-Day Rolling Average Emission Rate for S02 ofno greaterthan 0.075 lb/mmBTU. 118. Consumers shall install an FGD at Karn Unit 2 and, commencing on April 15, 2015, Consumers shall Continuously Operate such FGD. Commencing no later than 60 Operating Days thereafter, Consumers shall Continuously Operate such FGD so as to achieve and maintain a 30-Day Rolling Average Emission Rate for S02 ofno greaterthan 0.090 lb/mmBTU. Commencing no laterthan 365 Operating Days after April 15, 2015, Consumers shall Continuously Operate such FGD so as to achieve and maintain a 365-Day Rolling Average Emission Rate for S02 ofno greaterthan 0.075 lb/mmBTU. 

### C. Unit-Specific S02 Requirements atCobbUnits 4 and 5 119. Commencing no later than 60 Operating Days afterthe Date ofEntry, and continuing until the Unit is Retired or Refueled toNatural Gas pursuantto this Consent Decree, 27

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 31 of 115 Pg ID 52

Consumers shall Continuously OperateCobb Units 4 and 5 so that each Unit achieves and maintains a 30-Day Rolling Average Emission Rate for 

### S02 ofno greaterthan 1.40 lb/mmBTU. 120. Commencing no laterthan 365 Operating Days afterthe Date ofEntry, and continuing until the Unit is Retired or Refueled to Natural Gas pursuantto this Consent Decree, Consumers shall Continuously OperateCobb Units 4 and 5 so that each Unit achieves and maintains a 365-Day Rolling Average Emission Rate for 

### S02 ofno greaterthan 1.20 lb/mmBTU. 121. By no laterthan April 15, 2016, Consumers shall eitherRetire orRefuel to Natural Gas Cobb Units 4 and 5. No laterthan one year from the Date ofEntry, Consumers shall notify Plaintiffin writing which option- Retire orRefuel to Natural Gas- it elects for Cobb Units 4 and 5. D. Unit-Specific 

### S02 Requirements at WeadockUnits 7 and 8 122. Commencing no later than 60 Operating Days afterthe Date ofEntry, Consumers shall Continuously Operate Weadock Units 7 and 8 so that each Unit achieves and maintains a 30-Day Rolling Average Emission Rate for 

### S02 ofno greaterthan 1.40 lb/mmBTU. 123. Commencing no laterthan 365 Operating Days afterthe Date ofEntry, Consumers shall Continuously OperateWeadock Units 7 and 8 so that each Unit achieves and maintains a 365-Day Rolling Average Emission Rate for 

### S02 ofno greaterthan 1.20 lb/mmBTU. 124. Weadock Units 7 and 8 exhaustthrough a common duct to a common stack. Accordingly, so long as the two Units exhaustto a common duct, notwithstanding any other provision, any 

### S02 Emission Rates set forth underthis ConsentDecree as applicable to each of Weadock Unit 7 and Unit 8 shall be measured and calculated for the two Units together as ifthey
were a single Unit (e.g., where the ConsentDecree specifies that Consumers shall operate 

### 28

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 32 of 115 Pg ID 53

Weadock Unit 7 and Unit 8to achieve and maintain a 30-Day Rolling Average Emissions Rate for S02 of 1.40 lb/mmBTU at each Unit, the emissions rate calculation for the Weadock Units will be based on the total S02 emissions and heat input for the two Units together measured at the common duct). A violation ofany suchrate based on common duct measurements shall be presumed to be two violations, unless Consumers proves to EPA's satisfaction thatthe violation is due solely to the mal-performance ofone ofthe two Units. 125. By no later than April 15, 2016, Consumers shall Retire Weadock Units 7 and 8. 

### E. Unit-Specific S02 RequirementsatWhiting Units 

### 1, 2, and 

### 3 126. Commencing no laterthan 60 OperatingDaysafter the Date ofEntry, Consumers shall Continuously Operate Whiting Units I, 2, and 3 so that each Unit achieves and maintains a 30-Day Rolling Average Emission Rate for S02 ofno greater than 1.40 lb/mmBTU. 127. Commencing no laterthan 365 OperatingDays afterthe Date ofEntry, Consumers shall Continuously OperateWhiting Units l,

### 2, and 3 so that each Unit achieves and maintains a 365-Day Rolling Average Emission Rate for S02 ofno greaterthan0.90 lb/mmBTU. 128. By no later than April 15, 2016, Consumers shall Retire Whiting Units I,

### 2, and 3. F. System-WideAnnual S02TonnageLimitation. 129. The Consumers System, collectively, shall operate so as notto exceed the following System-Wide Annual S02Tonnage Limitations: FortheCalendarYearSpecified Below: System-WideAnnual SOz

### Tonnage Limitation: 2015 57,900 2016 34,000 2017 and continuingeach calendaryear 10,900 thereafter 29

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 33 of 115 Pg ID 54

G. MonitoringofS02 Emissions 130. In determining a 30-Day Rolling Average Emission Rate for S02,a 90-Day Rolling Average Emission Rate for S02,or a 365-Day Rolling Average Emission Rate for S02, Consumers shall use CEMS in accordance with the procedures of40 C.F.R. Part 75, exceptthat the S02 emissions data need not be bias adjusted and the missing data substitution procedures of 40 C.F.R. Part 75 shall not apply. IfConsumers elects to install unit level S02 CEMS on Campbell Units 1and 2 (in lieu ofinstalling both unit level S02 and flow CEMS) and calculates unit level S02 mass emission according to the procedures in Appendix 

### B, diluent capping 

### (i.e., 5% C02) will be applied to the S02 emission rate for any hours where the measured C02 concentration is less than 5% following the procedures in 40 C.F.R. Part 75, Appendix F, Section 3.3.4.1.131. For purposes ofcalculating the System-Wide Annual S02Tonnage Limitation, Consumers shall use CEMS in accordance with the procedures specified in 40 C.F.R. Part 75, which includes the requirements associated with the concepts ofbias adjustments and missing data substitution. H. Use and SurrenderofS02Allowances 132. Except as may be necessary to comply with Section 

### XIV (Stipulated Penalties), Consumers shall not use S02 Allowances to comply with any requirement ofthis Consent Decree, including by claiming compliance with any emission limitation required by this Consent Decree by using, tendering, orotherwise applying S02 Allowances to offset any excess emissions.
30

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 34 of 115 Pg ID 55

133. Except as provided in this ConsentDecree, Consumers shall not sell, bank, trade,
ortransfer any S02 Allowances allocated to the Consumers System Units. Nothing in this Consent Decree shall restrict Consumers' ability to transfer S02 Allowances among its own facility orgeneral accounts. 134. Beginning with the year 2014 compliance period, and continuing each year thereafter, Consumers shall Surrender all S02 Allowances allocated to the Consumers System for that year's compliance period that Consumers does not need in orderto meet its own federal and/or state CAA regulatory requirements for the Consumers System Units. However, S02 Allowances allocated to the Consumers System Units may be used by Consumers to meet its
own federal and/or state CAAregulatory requirements for such Units. 135. Nothing in this Consent Decree shall prevent Consumers from purchasing or otherwise obtaining S02 Allowances from another source for purposes ofcomplying with federal and/or state CAA regulatory requirements to the extent otherwise allowed by law. 136. The requirements ofthis Consent Decree pertainingto Consumers' use and SurrenderofS02 Allowances are permanent injunctions not subjectto any termination provision ofthis Consent Decree. 

### I. Super-Compliant S02

### Allowances 137. Notwithstanding Section V.H (Use ofSurrenderofS02 Allowances) ofthis Consent Decree, beginning with the year 2014 and continuing in each calendaryearthereafter, Consumers may sell, bank, use, trade, ortransfer S02 Allowances made available in that year's compliance period solely as a result of:

31

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 35 of 115 Pg ID 56

a. the installation and operation ofany S02 pollution control that is not otherwise required by, ornecessary to maintain compliance with, any provision ofthis Consent Decree, and is not otherwise required by law; b. the use ofFGD orDSI priorto the date established by this Consent Decree; or
c. achievement and maintenance ofan Emission Rate below a 365-Day Rolling Average Emission Rate for S02 atthe following Units: (i) at Campbell Units I and 2: 0.260 lb/mmBTU; (ii) at Campbell Unit 3: 0.060 lb/mmBTU; (iii) at Karn Unit 

### I: 0.075 lb/mmBTU, (iv) at Karn Unit 2: 0.075 lb/mmBTU; provided that Consumers is also in compliance for that calendaryearwith all emission limitations for S02 set forth in this Consent Decree. Consumers shall timely report the generation ofsuch super-compliant Allowances in accordance with Section XII (Periodic Reporting) ofthis ConsentDecree. J. 

### Method for SurrenderofS02Allowances. 138. Consumers shall Surrender, ortransferto a non-profitthird party selected by Consumers for Surrender, all S02 Allowances required to be Surrendered pursuantto Section V.H (Use and SurrenderofS02 Allowances) ofthis Consent Decree by June 30ofthe immediately following calendaryear. Such Surrender need not include the specific S02 Allowances that were allocated to Consumers System Units, so long as Consumers Surrenders S02 Allowancesthat are from the same yearoran earlieryear and that are equal to the number required to be Surrendered underthis ConsentDecree. 139. Ifany S02 Allowances required to be Surrendered underthis Consent Decree are transferred directly to a non-profitthird party, Consumers shall include a description ofsuch 32

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 36 of 115 Pg ID 57**~------------**

transfer in the next report submitted to EPA pursuantto Section XII (Periodic Reporting) ofthis Consent Decree. Such report shall: (a) identify the non-profitthird party recipient(s) ofthe S02 Allowances and Jist the serial numbers ofthe transferred S02 Allowances; and (b) include a certification by the non-profit third party recipient(s) statingthatthe recipient(s) will not sell, trade, or otherwise exchange any ofthe allowances and will not use any ofthe S02 Allowances to meet any obligation imposed by any environmental law. No laterthan the third periodic report due after the transfer ofany S02 Allowances, Consumers shall include a statementthatthe non-profitthird party recipient(s) Surrendered the S02 Allowances for permanent Surrenderto EPA in accordance with the provisions ofthe following Paragraph 140 within one year after Consumers transferred the S02 Allowances to them. Consumers shall not have complied with the S02 Allowance Surrender requirements ofthis Paragraph 139 until all third party recipient(s) have actually Surrendered the transferred S02 Allowancesto EPA. 140. For all S02Allowances required to be Surrendered, Consumers orthe third party recipient(s) (as the case may be) shall first submit an S02 Allowance transferrequestto EPA's Office ofAir and Radiation's Clean AirMarkets Division directing the transfer ofsuch S02 Allowancesto the EPA Enforcement SurrenderAccount orto any other EPA accountthat EPA may direct in writing. Such S02 Allowance transferrequests may be made in an electronic
mannerusing EPA's Clean Air Markets Division Business System or similar system provided by EPA. As part ofsubmitting these transfer requests, Consumers orthe third party recipient(s) shall irrevocably authorize the transfer ofthese S02 Allowances and identify- by name of account and any applicable serial orother identification numbers or station names- the source and location ofthe S02 Allowances being Surrendered. 33

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 37 of 115 Pg ID 58

VI. PMEMISSIONREDUCTIONS AND CONTROLS A. Optimization ofBaghouses and ESPs 141. By no laterthan 60 Operating Days from Entry ofthis Consent Decree and continuing thereafter, Consumers shall Continuously Operate each PM Control Device on each Unit in the Consumers System and use good air pollution control practices to maximize the PM emission reductions at all times when the Unit is in operation. Consumers shall: (a), at a minimum, to the extentpracticable: (i) fully energize each section ofthe ESP for each Unit, where applicable; operate each compartmentofthe Baghouse as designed for Full Stream Operation for each Unit, where applicable (regardless ofwhetherthose actions are needed to comply with opacity limits); (ii) operate automatic control systems
on each ESP to maximize PM collection efficiency, where applicable; (iii) maintain and replace bags on each Baghouse as needed to maximize collection efficiency, where applicable; (iv) maintain power levels delivered to the ESPs, consistentwith manufacturers' specifications, the operational design ofthe Unit, and good engineering practices; and (v) evaluate and restore the plate-cleaning and discharge-electrodecleaning systems for the ESPs at each Unit by varying the cycle time, cycle frequency, rapper-vibrator intensity, and number ofstrikes percleaning event; and (b) during the next planned Unit outage (or unplanned outage ofsufficient length), optimize the PM controls on that Unit by inspecting for and repairing any failed ESP section orBaghouse compartment and any openings in ESP casings, ductwork and expansionjointsto minimize air leakage.

34

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 38 of 115 Pg ID 59

B. Unit-Specific PM Requirements at Campbell Units 1, 2, and 3 142. Commencing no laterthan 60 Operating Days afterthe Date ofEntry, and continuingthrough May 1, 2016, Consumers shall Continuously Operate the PM Control Devices being vented to a combined stack at Campbell Units I and 2 so as to achieve and maintain a PM Emission Rate ofno greaterthan 0.030 lb/mmBTU at the common stack. 143. Commencing no later than 60 Operating Days afterthe Date ofEntry, and continuingthrough December 30, 2016, Consumers shall Continuously Operate the existing ESP at Campbell Unit 3 so as to achieve and maintain a PM Emission Rate ofno greaterthan 0.030 lb/mmBTU. 144. Consumers shall install a Baghouse at Campbell Unit 1and, commencing on April 1, 2016, and continuingthereafter, Consumers shall Continuously Operate such Baghouse
so that it achieves and maintains a PM Emission Rate ofno greaterthan 0.015 lb/mmBTU. 145. Consumers shall install a Baghouse at Campbell Unit 2 and, commencing no later than 30 Operating Days afterthe Date ofEntry, and continuing thereafter, Consumers shall Continuously Operate such Baghouse so that it achieves and maintains a PM Emission Rate of
no greaterthan 0.015 lb/mmBTU. 146. Consumers shall install a Baghouse at Campbell Unit 3 and, commencing on December 31, 2016, and continuing thereafter, Consumers shall Continuously Operate such Baghouse so that it achieves and maintains a PM Emission Rate ofno greaterthan 0.015 lb/mmBTU.

35

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C. Unit-Specific PM Requirements at Karn Units 1and 2 147. Commencing no laterthan 30 Operating Days afterthe Date ofEntry, and continuing thereafter, Consumers shall Continuously Operate the existing Baghouse at Karn Unit I so as to achieve and maintain a PM Emission Rate ofno greaterthan 0.015 lb/mmBTU. 148. Commencing no laterthan 30 Operating Days afterthe Date ofEntry, and continuing thereafter, Consumers shall Continuously Operate the existing Baghouse at Karn Unit 2 so as to achieve and maintain a PM Emission Rate ofno greaterthan 0.015 lb/mmBTU. D. Unit-Specific PM Requirements at Cobb Units 4 and 5 149. By no later than April 15, 2016, Consumers shall eitherRetire or Refuel to Natural Gas Cobb Units 4 and 5. No later than one year from the Date ofEntry, Consumers shall notify Plaintiffin writing which option- Retire orRefuel to Natural Gas- it elects for Cobb Units 4 and 5. E. Unit-Specific PM Requirements at WeadockUnits 7 and 8, and Whiting Units 1, 2, and 3 150. By no laterthan April 15, 2016, Consumers shall Retire Weadock Units 7 and 8, and Whiting Units I, 2, and 3. F. Opacity Limits 151. Subjectto and consistentwith provisions ofthe Michigan SIP, by no laterthan 60 Operating Days afterthe date ofthe initial Continuous Operation ofthe Baghouses at Campbell Unit I, Campbell Unit 2, Campbell Unit 3, Karn Unit I, and Karn Unit 2 as required by Section VI (PM Emission Reductions and Controls) ofthis Consent Decree and continuing thereafter, Consumers shall Continuously Operate each such Unit so as to maintain compliance with the opacity limit set forth in the Michigan SIP and Title V Permit for each Unit. 36

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152. Subject to and consistent with provisions ofthe Michigan SIP, by no laterthan 60 Operating Days after the date ofoptimization ofPM controls on Cobb Unit 4, Cobb Unit 5, Weadock Unit 7, Weadock Unit 8, Whiting Unit I, Whiting Unit 2, and Whiting Unit 3 as required by Paragraph 141(b) ofthis Consent Decree and continuing thereafter, Consumers shall Continuously Operate each such Unit and the oil-fired Kam Units 3 and 4 so as to maintain compliance with the opacity limit setforth in the Michigan SIP and Title V Permit for each Unit. 

### G. PMEmissions Testing and MonitoringRequirements 153. Within 12 months ofthe Date ofEntry, and continuing annually thereafter (unless
a Unit is Retired or Refueled to Natural Gas), Consumers shall conduct a stack test for PM pursuantto Paragraphs 154, 155, and 156. The annual performance testrequirement imposed on Consumers by this Paragraph 153 may be satisfied by stacktests conducted by Consumers as may be required by its permits from the State ofMichigan for any yearthat such stacktests are required under the permits. Consumers may perform testing every otheryear, ratherthan every year, provided that two ofthe most recently completed test results from tests conducted in accordance with the methods and procedures specified in this Consent Decree demonstrate that the PM emissions are equal to or less than 0.015 lb/mmBTU ifthe applicable rate is 0.030 lb/mmBTU, and 0.010 lb/mmBTU ifthe applicable rate is 0.015 lb/mmBTU. Consumers shall perform testing every year, rather than every otheryear, beginning in the year immediately following any testresult demonstrating that the PM emissions are greaterthan 0.015 lb/mmBTU ifthe applicable rate is 0.030 lb/mmBTU, and 0.010 lb/mmBTU ifthe applicable rate is 0.015 lb/mmBTU.

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154. To determine compliance with the PM Emission Rate established in Subsections VI.B and (Unit-Specific PM Requirements at Campbell Units 1, 2 and 3) and C (Unit-Specific PM Requirements at Kam Units 1and 2), Consumers shall use the applicable reference methods and procedures (filterableportion only) specified in its CAA permits and the Michigan SIP for Campbell Units 1and 2 (combined stack testing or individual unittesting), Campbell Unit 3, and Kam Units 1and 2. Each test shall consist ofthree separate runs performed under representative operating conditions not including periods ofstartup, shutdown, or Malfunction. The sampling time for each run associated with a Unit controlled by a Baghouse shall be at least 120 minutes and the volume ofeach run shall be at least 1.70 dry standard cubic meters (60 dry standard cubic feet). The sampling time for each run associated with a Unit controlled by an ESP shall be at least 60 minutes and the volume ofeach run shall be at least 30 dry standard cubic feet. Consumers shall calculate the PM Emission Rate from the stack test results in accordance with 40 C.F.R. § 60.8(f). The results ofeach PM stacktest shall be submittedto EPA within 60 Days ofcompletion ofeach test. 155. Consumers shall use the applicable reference methods and procedures (filterable portion only) for compliance demonstrations with the PM emission rates specified in its CAA permits and the Michigan SIP for Cobb Units 4 and 5, Weadock Units 7 and 8 and Whiting Units 1, 2 and 3. Each test shall consist ofthree separate runs performed underrepresentative operating conditions not including periods ofstartup, shutdown, orMalfunction. Unless otherwise specified in its CAA permit, the samplingtime for each run shall be at least 60 minutes and the volume ofeach run shall be at least 30 dry standard cubic feet. The results ofeach PM stack test shall be submittedto EPA within 60 Days ofcompletion ofeach test. 38

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156. Within 12 months ofthe Date ofEntry, and continuing annually thereafter in accordance with the testing frequency established in Paragraph 153, Consumers shall also conduct a PM stack test for condensable PM at Campbell Units 1 and 2 (combined stack testing
or individual unit testing), Campbell Unit 3, and Kam Units 1and 2 using the reference methods and procedures set forth at40 C.F.R. Part 51, Appendix M, Method 202. Each test shall consist ofthree separate runs performed underrepresentative operating conditions not including periods ofstartup, shutdown, orMalfunction. The samplingtime for each run shall be at least 120 minutes and the volume ofeach run shall be at least 1.70 dry standard cubic meters (60 dry standard cubic feet). Consumers shall calculate the number ofpounds ofcondensable PM emitted per million BTU ofheat input (lb/mmBTU) from the stacktest results in accordance with 40 C.F.R. 

### § 60.8(f). The results ofthe PM stacktestconducted pursuantto this Paragraph 156 shall not be used for the purpose ofdetermining compliance with the PM Emission Rates required by this Consent Decree. The results ofeach PM stack test shall be submitted to EPA within 60 Days ofcompletion ofeach test. 157. As an alternative to the PM testing required in this Section VI.G (PM Emissions Testing and Monitoring Requirements) ofthis Consent Decree, following the installation and operation ofPM CEMS as required by Section VI.H ofthis ConsentDecree, Consumers, at its sole discretion, may seek EPA approval pursuantto Section XIII (Review and Approval of Submittals) ofthis Consent Decree to forego stack testing and instead demonstrate continuous compliance with an applicable filterable PM Emission Rate by using the PM CEMS data on a 3- hour rolling average basis. IfEPA approves a requestto demonstrate continuous compliance with an applicable PM Emission Rate at a Unit using PM CEMS underthis Paragraph 157, stack 39

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testing for condensable PM pursuantto this Consent Decree using the reference methods and procedures set forth at 40 C.F.R. Part 51, Appendix M, Method 202 is not required for that Unit. 158. When Consumers submits the application for modification ofits Title V Permit pursuantto Section XVII (Permits) ofthis ConsentDecree, that application shall include a Compliance Assurance Monitoring ("CAM") plan, under40 C.F.R. Part 64, for any applicable PM Emission Rate in Subsections VI.B (Unit-Specific PM Requirements at Campbell Units 1, 2 and 3) and C (Unit-Specific PM Requirements at Karn Units I and 2). The PM CEMS required under Paragraph 159 may be used in that CAM plan. 

### H. PMCEMS 159. Consumers shall install, correlate, maintain, and operatethree PM CEMS as specified below. The PM CEMS shall comprise a continuous particle mass monitor measuring particulate matter concentration, directly orindirectly, on an hourly average basis and a diluent monitorused to convertthe concentration to units expressed in lb/mmBTU. The PM CEMS installed at each Unit must be appropriate for the anticipated stack conditions and capable of measuring PM concentrations on an hourly average basis. Consumers shall maintain, in an electronic database, the hourly average emission values ofall PM CEMS in lb/mmBTU. Except for periods ofmonitor malfunction, maintenance, calibration, orrepair, Consumers shall continuously operate the PM CEMS at all times when the Unit it serves is operating. 160. By no later than six (6) months from the Date ofEntry ofthis Consent Decree, Consumers shall submitto EPA for review and approval pursuantto Section XIII (Review and Approval ofSubmittals) ofthis ConsentDecree a plan for the installation and correlation ofthree PM CEMS at Campbell Unit 3, Karn Unit I, and Karn Unit 2. 40

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161. By no laterthan six months from the submittal ofplans in the prior Paragraph 160, Consumers shall submitto EPA for review and approval pursuantto Section XIII (Review and Approval ofSubmittals) ofthis Consent Decree a proposed Quality Assurance/Quality Control ("QA/QC") protocol that shall be followed for such PM CEMS. 162. In developing both the plan for installation and correlation ofthe PM CEMS and the QA/QC protocol, Consumers shall use the criteria set forth in 40 C.F.R. Part 60, Appendix B, Performance Specification 11, and Appendix F, Procedure 2. Following EPA's approval ofthe plan described in Paragraph 160 and the QA/QC protocol described in Paragraph 161, Consumers shall thereafter operate the PM CEMS in accordance with the approved plan and QAIQC protocol. Notwithstanding any otherprovision ofthis Consent Decree, exceedances of the PM Emission Rate that occur as a result ofde-optimizing emission controls and/or spiking the exhaust gas with excess particulate required to achieve the high level PMtest runs duringthe correlation testing shall notbe a violation ofthe requirements ofthis Consent Decree (or credible evidence thereof) and shall not be subjectto stipulated penalties; provided, however, that Consumers shall make best efforts to keep the high level PM test runs during such correlation testing belowthe applicable PM Emission Rate. 163. By no laterthan eighteen (18) months after the date that EPA approvesthe plan described in Paragraph 160, Consumers shall install, correlate, maintain, and commence Continuous Operation ofthe PM CEMS approved by EPA at Kam Units 1and 2, conduct performance specification tests on the PM CEMS, and demonstrate compliance with the PM CEMS installation and correlation plans submitted to and approved by EPA. By March 31, 2017, Consumers shall install, correlate, maintain, and commence Continuous Operation ofthe 41

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PM CEMS approved by EPA atCampbell Unit 3, conductperformance specification tests on the PM CEMS, and demonstrate compliance with the PM CEMS installation and correlation plans submitted to and approved by EPA. Consumers shall report, pursuantto Section XII (Periodic Reporting), the data recorded by the PM CEMS, expressed in lb/mmBTU on a rolling average 3- hour basis in electronic format to EPA and identify in the report any PM emission rates in excess ofthe applicable PM Emission Rate and any concentrations measured by the PM CEMS that are greaterthan 125% ofthe highest PM concentration level used in the mostrecent correlation testing performed pursuantto Performance Specification 11 in 40 C.F.R. Part 60, Appendix B. 

### I. General PMProvisions 164. Except as approved pursuantto Paragraph 157, stacktesting shall be used to determine compliance with the PM Emission Rates established by this Consent Decree. Data from PM CEMS shall be used, at a minimum, to provide information to operators on PM emissions rate trends on a continuous basis. 165. Nothing in this Consent Decree is intended to, orshall, alter orwaive any applicable law (including but not limited to any defenses, entitlements, challenges, or clarifications related to the Credible Evidence Rule, 62 Fed. Reg. 8314 (Feb. 24, 1997)) concerning the use ofdata for any purpose underthe Act. 

### VII. PROHIBITION ON NETTING CREDITS OR OFFSETS 166. Emission reductions thatresult from actions to be taken by Consumers afterthe Date ofEntry ofthis ConsentDecree to comply with the requirements ofthis Consent Decree shall not be considered as a creditable contemporaneous emission decrease for the purpose of obtaining a Netting credit oroffset underthe CAA'sNonattainmentNSRand PSD programs, 42

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and shall not be used in any way to determine whether or not a project would result in either a "significantemissions increase" ora "significant net emissions increase" underthe NonattainmentNSR and PSD programs. 167. The limitations on the generation and use ofNetting credits and offsets set forth in the previous Paragraph 166 do not apply to emission reductions achieved by a particular Consumers System Unitthat are greaterthan those required underthis Consent Decree for that particular Consumers System Unit. For purposes ofthis Paragraph, emission reductions from a Consumers System Unit are greaterthan those required underthis Consent Decree ifthey result from such Unit's compliance with federally-enforceable emission limits that are more stringent than those limits imposed on the Unit underthis Consent Decree and under applicable provisions ofthe CAA orthe Michigan SIP. 168. Nothing in this ConsentDecree is intendedto preclude the emission reductions generated underthis Consent Decree from being considered by the applicable state regulatory agency orEPA for the purpose ofattainment demonstrations submitted pursuantto 

### § 110 ofthe Act, 42 U.S.C. 

### §7410, orin determining impacts on National Ambient Air Quality Standards, PSD increment, or air quality related values, including visibility, in a Class I area. 

### VIII. WIND POWER COMMITMENT 169. Consumers shall install and operate, orenter long-term power purchase agreements ("PPAs") with a duration ofat least 20 years from the date ofthe PPA, for 400 MW (nameplate) ofnew Wind Power generating capacity. To satisfy this requirement, Consumers must contract for orcommence operation ofsuch new Wind Power generating capacity between June 10, 2009 and December 31, 2015. 43

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IX. ENVIRONMENTAL MITIGATION PROJECTS 170. Consumers shall implementthe Environmental Mitigation Projects ("Projects") described in Appendix A to this Consent Decree in compliance with the approved plans and schedules for such Projects and otherterms ofthis Consent Decree. In implementingthe Projects, Consumers shall spend no less than $7.7 million in ProjectDollars. Consumers shall not include its own personnel costs in overseeing the implementation ofthe Projects as Project Dollars.171
. Consumers shall maintain, and presentto EPA upon request, all documents to substantiate the Project Dollars expended to implementthe Projects described in Appendix A, and shall provide these documents to EPA within 30 Days ofsuch request. 172. All plans and reports prepared by Consumers pursuantto the requirements ofthis Section lX (Environmental Mitigation Projects) ofthe ConsentDecree and required to be submitted to EPA shall be publicly available from Consumers without charge. 173. Consumers shall certify, as part ofeach plan submitted to EPA for any Project, that Consumers is not otherwise required by law to perform the Project described in the plan, that Consumers is unaware ofany otherperson who is required by Jaw to perform the Project, and that Consumers will not use any Project, orportion thereof, to satisfy any obligations that it may have under other applicable requirements ofJaw, including but not limited to any applicable renewable or energy efficiency portfolio standards. 174. Consumers shall use good faith efforts to secure as much environmental benefit as possible for the Project Dollars expended, consistent with the applicable requirements and limits ofthis Consent Decree. 44

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175. 1fConsumerselects (where such an election is allowed) to undertake a Project by contributing funds to anotherperson orentity that will carry outthe Project in lieu ofConsumers, but not including Consumers' agents or contractors, that person or instrumentality must, in writing: (a) identify its legal authority for accepting such funding; and (b) identify its legal authority to conductthe Project for which Consumers contributes the funds. Regardless of whether Consumers elects (where such election is allowed) to undertake a Project by itselforto do so by contributing funds orreal estate to anotherperson or instrumentality that will carry out the Project, Consumers acknowledges that it will receive credit for the expenditure ofsuch funds
or real estate contributed as Project Dollars only ifConsumers demonstrates thatthe funds orreal estate transfer have been spent/completed by either Consumers orby the person or instrumentality receiving them, and that such expenditures meet all requirements ofthis Consent Decree.176. Consumers shall comply with the reporting requirements described in Appendix A. 177. 1n connection with any communication to the public orto shareholders regarding Consumers' actions orexpenditures relating in any way to the Environmental Mitigation Projects in this Consent Decree, Consumers shall include prominently in the communication the information thatthe actions and expenditures were required by this Consent Decree. 178. Within 60 Days following the completion ofeach Projectrequired under this Consent Decree (including any applicable periods ofdemonstration ortesting), Consumers shall submitto the United States a report that documents the date thatthe Project was completed, the results achieved by implementingthe Project, including the emission reductions orother 45

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environmental benefits, and the ProjectDollars expended by Consumers in implementingthe Project. 

### X. CIVIL PENALTY 179. Within 30 Days afterthe Date ofEntry ofthis Consent Decree, Consumers shall pay to the United States a civil penalty in the amount of$2.75 million dollars. The civil penalty shall be paid by Electronic Funds Transfer ("EFT") to the United States Department ofJustice, in accordance with current EFTprocedures, referencing USAO File Number2014V00933, DOJ Case Number 90-5-2-1-09771, and the civil action case name and case number ofthis action. The costs ofsuch EFT shall be Consumers' responsibility. Payment shall be made in accordance with instructions provided to Consumers by the Financial Litigation Unit ofthe U.S. Attorney's Office for the Eastern District ofMichigan. Any funds received after 2:00 p.m. EDT shall be credited on the nextbusiness day. At the time ofpayment, Consumers shall provide notice of payment, referencing the USAO File Number, the DOJ Case Number, and the civil action case
name and case number, to the Department ofJustice andto EPA in accordance with Section XIX (Notices) ofthis Consent Decree. 180. Failure to timely pay the civil penalty shall subject Consumers to interest accruing from the date payment is due until the date payment is made atthe rate prescribed by 28 U.S.C. § 1961, and shall render Consumers liable for all charges, costs, fees, and penalties established by law for the benefit ofa creditor or ofthe United States in securing payment. 181. Payments made pursuantto this Section are penalties within the meaning of Section 162(f) ofthe Internal Revenue Code, 26 U.S.C. § 162(£), and are nottax-deductible expenditures for purposes offederal law. 46

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XI. RESOLUTION OF CIVIL CLAIMS A. Resolution of

### U.S. Civil Claims 182. Claims ofthe United States Basedon Modifications Occurring Before the Date of Lodging ofthis ConsentDecree. Entry ofthis Consent Decree shall resolve all civil claims of the United States against Consumers that arose from any modifications commenced at any Consumers System Unit prior to the Date ofLodging ofthis Consent Decree, including but not limited to those claims alleged in the Complaint in this action and the NOVs issued by EPA to Consumers on March 30, 2007 and October 17, 2008, under any orall of: (a) Parts CorD of Subchapter I ofthe CAA, 42 U.S.C. §§ 7470-7492,7501-7515, and the implementing PSD and NonattainmentNSR provisions ofthe Michigan SIP; (b) Section 111 ofthe Act, 42 U.S.C. § 7411, and 40 C.F.R. 

### § 60.14; and (c) Title V ofthe Act, 42 U.S.C. 

### §7661-7661f, but only to the extentthat such Title V claims are based on Consumers' failure to obtain an operating permit thatreflects applicable requirements imposed under Parts C or D ofSubchapter I ofthe Clean Air Act. Entry ofthis Consent Decree shall also resolve the civil claims ofthe United States for any opacity claims at any Consumers System Unit and at Kam Units 3 and 4 that occurred prior to the Date ofLodging ofthis Consent Decree. 183. Claims ofthe United States Based on Modifications after the Date ofLodging of this Consent Decree. Entry ofthis Consent Decree also shall resolve all civil claims ofthe United States that arise from a modification commenced before December 31, 2017, for pollutants regulated under Parts CorD ofSubchapter I ofthe Act and under regulations promulgated thereunder as ofthe Date ofLodging except as provided below, and:

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a. where such modification is commenced at any Consumers System Unit afterthe Date ofLodging ofthis Consent Decree, or b. where such modification is one this Consent Decree expressly directs Consumers to undertake._ The term "modification" as used in this Paragraph 183 shall have the meaning thatterm is given under the CAA and under the regulations in effect as ofthe Date ofLodging ofthis Consent Decree. The claims resolved by this Paragraph 183 shall not include claims based upon Greenhouse Gases and sulfuric acid mist. 184. Reopener. The resolution ofthe United States' civil claims against Consumers, as provided by this Section XI.A (Resolution ofU.S. Civil Claims), is subjectto the provisions of Section XI.B (Pursuit ofCivil Claims Otherwise Resolved by Section XI.A). 

### B. PursuitofCivil Claims OtherwiseResolved by 

### Section XI.A 185. Bases for Pursuing Resolved Claims for the Consumers System. IfConsumers violates a System-Wide Annual NOxTonnage Limitation or System-Wide Annual S02Tonnage Limitation; or fails by more than 90 Daysto Retire any Unit as required by this ConsentDecree;
or fails by more than 90 Daysto install, upgrade, orcommence Continuous Operation ofany emission control device or achieve any Emission Rate or limitation required pursuantto this Consent Decree, then the United States may pursue any claim at any Consumers System Unit that is otherwise resolved under Section XI.A (Resolution ofU.S. Civil Claims), subjectto subparagraphs (a) and (b) below.
a. For any claims based on modifications undertaken at an OtherUnit (i.e., any Unit ofthe Consumers System that is not an Improved Unit for the pollutant in question), claims may 48

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be pursued only where the modification(s) on which such claim is based was commenced within the five (5) years preceding the violation orfailure specified in this Paragraph 185a.
b. For any claims based on modifications undertaken at an Improved Unit, claims may be pursued only where the modification(s) on which such claim is based was commenced: 

### (I) after the Date ofLodging ofthis Consent Decree, and (2) within the five (5) years preceding the violation orfailure specified in this Paragraph 185.b.
186. Additional Bases for Pursuing Resolved Claims for Modifications at an Improved Unit: Solely with respectto Improved Units, the United States may also pursue claims arising from a modification (or collection ofmodifications) at an Improved Unitthathave otherwise been resolved under Section XI.A (Resolution ofU.S. Civil Claims), ifthe modification (or collection ofmodifications) atthe Improved Unit on which such claim is based (a) was commenced after the Date ofLodging, and (b) individually (orcollectively) increased the maximum hourly emission rate ofthat Unit for NOx or S02 (as measured by 40 C.F.R. 

### § 60.14(b) and (h)) by more than 10%. 187. Additional Bases for Pursuing Resolved Claims for Modification at an Other Unit: Solely with respect to OtherUnits, the United States may also pursue claims arising from a modification (or collection ofmodifications) at an Other Unit that have otherwise been resolved under Section XI.A (Resolution ofU.S. Civil Claims), ifthe modification (or collection of modifications) at the Other Unit on which such claim is based was commenced within the five years preceding any ofthe following events:



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a. a modification (or collection ofmodifications) at such OtherUnit commenced afterthe Date ofLodging ofthis Consent Decree increases the maximum hourly emission rate for such OtherUnit for the relevantpollutant (NOx or S02), as measured by 40 C.F.R. § 60.14(b) and (h);
b. the aggregate ofall Capital Expenditures made at such OtherUnit exceed $150/KW on the Unit's Boiler Island (based on the generating capacities identified in this Consent Decree) during the period from the Date ofEntry ofthis Consent Decree through December 31, 2017 (Capital Expenditures shall be measured in calendaryear 2013 constant dollars, as adjusted by the McGraw-Hill EngineeringNews-Record Construction Cost Index); or

c. a modification (or collection ofmodifications) at such Other Unit commenced afterthe Date ofLodging ofthis Consent Decree results in an emissions increase ofNOx and/or S02 at such Other Unit, and such increase: (I)presents, by itself, or in combination with other emissions or sources, "an imminent and substantial endangerment" within the meaning of Section 303 ofthe Act, 42 U.S.C. § 7603; (2) causes orcontributes to violation ofa NAAQS in any Air Quality Control Areathat is in attainment with thatNAAQS; (3) causes orcontributes to violation ofa PSD increment; or (4) causes orcontributes to any adverse impact on any formally-recognized air quality and related values in any Class I area. The introduction ofany
new orchanged NAAQS shall not, standing alone, providethe showing needed underthis Subparagraph 187.c. to pursue any claim for a modification at an Other Unit resolved under Section XI.A (Resolution ofU.S. Civil Claims).

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XII. PERIODIC REPORTING 188. Afterentry ofthis Consent Decree, Consumers shall submitto the United States a periodic report, within 75 Days afterthe end ofeach halfofthe calendaryear (January through June and July through December). The report shall include the following information:
a. all information necessary to determine compliance with the requirements ofthe following provisions ofthis ConsentDecree: Section 

### IV (NOx Emission Reductions and Controls) concerningNOx emissions and monitoring, and the Use and SurrenderofNOx Allowances; Section V (S02 Emission Reductions and Controls) concerning S02 emissions and monitoring, and the Use and SurrenderofS02 Allowances; and Section 

### VI (PM Emission Reductions and Controls) concerning PM emissions and monitoring. Such information includes but it not limited to (I) summaries ofall 30-Day Rolling Average Emission Rates, 90-Day Rolling Average Emission Rates, and 365-Day Rolling Average Emission Rates, (2) calculations ofSystem-Wide Annual NOx and S02 Tonnage Limitations, and (3) specific calculations demonstrating the basis and specific amounts of NOx Allowances and S02 Allowances to be Surrendered; b. 3-hourrolling average PM CEMS data as required by Paragraph 157, identifying all periods ofmonitor malfunction, maintenance, and/orrepair as provided in Paragraph 159;
c. all information relating to super-compliantNOx and S02 Allowancesthat Consumers claims to have generated in accordance with Sections 

### IV.I (Super-Compliant NOx Allowances) and 

### V.I (Super-Compliant S02 Allowances) through compliance beyond the requirements ofthis Consent Decree, including a detailed description ofthe 51

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basis for such claim and the specific amount ofsuper-compliantNOx and S02 Allowances generated at each Unit; d. subjectto the provisions ofthe Michigan SIP, a report ofall 6-minute average opacity measurements in excess ofthe requirements ofParagraphs 151 and 152, and the
reasons for any such exceedances and a description ofcorrective actions undertaken;
e. documentation ofany Capital Expenditures at an OtherUnit's BoilerIsland made during the reporting period and cumulative BoilerIsland Capital Expenditures to date; f. all information indicating that the installation or upgrade and commencementof operation ofa new or upgraded pollution control device may be delayed, including the nature and cause ofthe delay, and any steps taken by Consumersto mitigate such delay; g. all affirmative defenses asserted pursuantto Paragraphs 208 through 213 during the reporting period; h. an identification ofall periods when any pollution control device required by this Consent Decree to Continuously Operate was not operating, the reason(s) for the equipment not operating, and the basis for Consumers' compliance ornon-compliance with the Continuous Operation requirements ofthis Consent Decree;
1. a summary ofactions implemented pursuantto implementation ofthe Wind PowerCommitmentpursuantto Section VIII (Wind Power Commitment); and 

### J. a summary ofactions implemented and expenditures made pursuantto implementation ofthe Environmental Mitigation Projects requiredpursuantto Section IX. (Environmental Mitigation Projects)

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189. In any periodic report submitted pursuantto this Section, Consumers may incorporate by reference information previously submitted under its Title V permitting requirements, provided that Consumers attaches the Title V Permit report (orthe pertinent portions ofsuch report) and provides a specific reference to the provisions ofthe Title V Permit report that are responsive to the information required in the periodic report. 190. In addition to the reports required pursuantto this Section XII (Periodic Reporting), ifConsumers violates or deviates from any provision (excluding emissions which will be reported pursuantto Paragraph 188.d) ofthis ConsentDecree, Consumers shall submitto the United States a report on the violation ordeviation within 10 business days after Consumers knew or should have known ofthe event. In the report, Consumers shall explain the cause or
causes ofthe violation or deviation and any measures taken or to be taken by Consumers to cure the reported violation or deviation orto prevent such violation ordeviation in the future. Ifat any time, the provisions ofthis Consent Decree are included in Title V Permits, consistent with the requirements for such inclusion in this ConsentDecree, then the semiannual deviation reports required under applicable Title V regulations shall be deemed to satisfy all the requirements of this Paragraph 190. 191. Each Consumers report shall be signed by a Responsible Official as defined in Title V ofthe Clean Air Act for Campbell, Kam, Kam Units 3 and 4, Cobb, Weadock, and Whiting, as appropriate, and shall contain the following certification: This information waspreparedeither byme or under mydirection orsupervision in accordance with a system designedto assure thatqualifiedpersonnelproperly gather andevaluate the information submitted. Basedon myevaluation, ormy inquiryof theperson(s) who manage(s) the system, ortheperson(s) directly responsibleforgathering the information, Ihereby certify underpenaltyof law that, to the bestof myknowledge andbelief, this information is true, accurate, 

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andcomplete. I understandthat there are significantpenalties for submitting false, inaccurate, or incomplete information to the UnitedStates. 192. Ifany NOx or S02Allowances are Surrendered to any non-profitthird party pursuantto Paragraphs I

### 08 and/or 139, the non-profitthird party's certification shall be signed by a managing officerofthe non-profitthird party and shall contain the following language: 

### I certify underpenaltyof law that [name of non-profitthird party]will notsell, trade, orotherwise exchange anyof the allowances andwill not use anyof the allowances to meetanyobligation imposedbyany environmental law. I understandthat there are significantpenalties for making misrepresentations to ormisleadingthe UnitedStates. 

### XIII. REVIEW AND APPROVAL OFSUBMITTALS 193. Consumers shall submiteach plan, report, orother submission required by this Consent Decree to the United States whenever such a document is required to be submitted for review or approval pursuantto this Consent Decree. EPA may approve the submittal ordecline to approve it and provide written comments explaining the bases for declining such approval as
soon as reasonably practicable. Within 60 Days ofreceiving written comments from EPA, Consumers shall either: (a) revise the submittal consistentwith the written comments and provide the revised submittal to EPA; or (b) submitthe matterfor dispute resolution, including the period ofinformal negotiations, under Section XVI (Dispute Resolution) ofthis Consent Decree.194. Upon receipt ofEPA's final approval ofthe submittal, orupon completion ofthe submittal pursuantto dispute resolution, Consumers shall implementthe approved submittal in accordance with the schedule specified therein oranotherEPA-approved schedule.

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XIV. STIPULATED PENALTIES 195. For any failure by Consumers to comply with the terms ofthis Consent Decree, and subjectto the provisions ofSections XV (Force Majeure) and XVI (Dispute Resolution), Consumers shall pay, within 30 Days afterreceipt ofwritten demand to Consumers by the United States, the following stipulated penalties to the United States: ConsentDecreeViolation Stipulated Penalty a. Failure to pay the civil penalty as specified in Section X $10,000 perDay (Civil Penalty) ofthis Consent Decree b. Failure to comply with any applicable 30-Day Rolling $2,500 perDay per violation Average Emission Rate where the violation is less than 5% in excess ofthe lb/mmBTU limits $5,000 perDay per violation where the violation is equal to orgreaterthan 5% but less than 1 0% in excess ofthe lb/mmBTU limits $10,000 perDay per violation where the violation is equal to or greater than 1 0% in excess of the lb/mmBTU limits

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c. Failure to comply with any applicable 90-Day Rolling $1,000 per Day perviolation where the violation is less than Average Emission Rate 5% in excess ofthe lb/mmBTU limits $1,750perDay perviolation where the violation is equal to orgreaterthan 5%but Jess than 1

0% in excess ofthe Jb/mmBTU limits $2,500 per Day per violation where the violation is equal to or greaterthan 1 0% in excess of the Ib/mmBTU limits d. Failure to comply with any applicable 365-Day Rolling $350 perDay perviolation for a Average Emission Rate, where the violation is Jess than 5% 365-Day Rolling Average in excess ofthe limits setforth in this ConsentDec.ree Emission Rate violation, plus $4,000 for each subsequent 365- Day Rolling Average Emission Rate violation that includes any day in a previously assessed 365-Day Rolling Average Emission Rate violation (e.g., if a violation ofthe 365-Day Rolling Average Emission Rate for a Unit first occurs on June 1, 2013, occurs again on June 2, 2013, and again on May 31, 2014, the total stipulated penalty assessed for these three violations would equal $135,750)

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e. Failure to comply with any applicable 365-Day Rolling $450per Day perviolation for a Average Emission Rate, where the violation is equal to or 365-Day Rolling Average greaterthan 5%but less than 10% in excess ofthe limits set Emission Rate violation, plus forth in this ConsentDecree $5,000 for each subsequent 365- Day Rolling Average Emission Rate violation that includes any day in a previously assessed 365-Day Rolling Average Emission Rate violation (e.g., if a violation ofthe 365-Day Rolling Average Emission Rate for a Unit first occurs on June 1, 2013, occurs again on June 2, 2013, and again on May 31, 2014, the total stipulated penalty assessed for these three violations would equal $174,250) f. Failure to comply with any applicable 365-Day Rolling $600 per Day perviolation for a Average Emission Rate, where the violation is equal to or 365-Day Rolling Average greaterthan 10% in excess ofthe limits set forth in this Emission Rate violation, plus Consent Decree $6,000 for each subsequent 365- Day Rolling Average Emission Rate violation that includes any day in a previously assessed 365-Day Rolling Average Emission Rate violation (e.g., if a violation ofthe 365-Day Rolling Average Emission Rate for a Unit first occurs on June 1 ' 2013, occurs again on June 2, 2013, and again on May 31, 2014, the total stipulated penalty assessed for these three violations would equal $231 ,000)

57

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g. Failure to comply with the applicable System-Wide 5,000 perton for first 100 tons, Annual Tonnage Limitations established by this Consent $10,000perton for each Decree additional ton above I00 tons, plus the SurrenderofNOx or SOz Allowances in an amount equal to two times the number oftons ofNOx or S02emitted thatexceededthe System-Wide Annual Tonnage Limitation h. Failure to comply with any applicable PM Emission Rate $2,500 per Operating Day per specified in Section VI.B (Unit-Specific PM Requirements violation, starting on the day a atCampbell Units I, 2 and 3) or C (Unit-Specific PM stacktestresult demonstrates a Requirements at Kam Units I and 2) ofthis Consent violation and continuing each Decree, where the violation is Jess than five percent (5%) in day thereafter untiIand excess ofthe lb/mmBTU limit excluding such day on which a subsequent stacktest* demonstrates compliance with the applicable PM Emission Rate i. Failure to comply with any applicable PM Emission Rate $5,000 per Operating Day per specified in Section VI.B orC ofthis ConsentDecree, violation, starting on the day a where the violation is equal to or greaterthan 5%but Jess stacktestresult demonstrates a than 10% in excess ofthe Jb/mmBTU limit violation and continuing each day thereafter until and excluding such day on which a subsequent stacktest* demonstrates compliance with the applicable PM Emission Rate 

### j. Failure to comply with any applicable PM Emission Rate $10,000 per Operating Day per specified in Section VI.B orC ofthis ConsentDecree, violation, starting on the day a where the violation is equal to orgreaterthan I0% in excess stacktestresult demonstrates a ofthe lb/mmBTU limit violation and continuing each day thereafter until and excluding such day on which a subsequent stack test* demonstrates compliance with the applicable PM Emission Rate

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k. Failure to install, commence Continuous Operation, or $10,000 per Day perviolation Continuously Operate a NOx, S02,or PM control device as during the first 30 Days; required under this Consent Decree $37,500 per Day perviolation thereafter I. Failure to Retire a Unit as required under this Consent $10,000perDay perviolation Decree during the first 30 Days; $37,500per Day perviolation thereafter m. Failure to conduct a stacktest for PM as required by $5,000 per Day perviolation subsection VI.G PM Emissions Testing and Monitoring Requirements) ofthis Consent Decree n. Failure to install or operateNOx, S02, and/or PM CEMS $1 ,000 per Day perviolation as required in this Consent Decree o. Failure to apply for any permitrequired by Section XVII $1,000 perDay per violation (Permits) p. Failure to timely submit, modify, or implement, as $750 perDay perviolation approved, the reports, plans, studies, analyses, protocols, or during the first I0 Days; $1,000 other submittals required by this ConsentDecree perDay perviolation thereafter q. Failure to SurrenderNOx Allowances as required under $37,500 perDay, plus $1,000 this Consent Decree perNOx Allowance not Surrendered r. Failure to Surrender S02Allowances as required under $37,500 perDay, plus $1,000 this Consent Decree per S02 Allowance not Surrendered
s. Using, selling, banking, trading, ortransferring NOx The SurrenderofAllowances in Allowances or S02Allowances except as permitted under an amount equal to four times this Consent Decree the number ofAllowances used, sold, banked, traded, or transferred in violation ofthis ConsentDecree t. Failure to demonstrate the third-party SurrenderofaNOx $2,500 perDay per violation or S02 Allowance in accordance with Paragraphs 108 and 139
u. Failure to optimize ESPs and Baghouses as required by $1,000 perDay perviolation Paragraph 141
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v. Failureto undertake and complete any ofthe $1,000 perDay perviolation Environmental Mitigation Projects in compliance with during the first 30 Days; $5,000 Section IX (Environmental Mitigation Projects) and per Day per violation thereafter Appendix A ofthis Consent Decree w. A violation ofthe opacity standard under Paragraph 151 $1,000 perDay per violation or 152 X. Any other violation ofthis Consent Decree $1,000 perDay perviolation *Consumers shall not be requ1red to make any subm1ss1on, mcludmg any not1ce ortest protocol, orto obtain any approval to orfrom EPA in advance ofconducting such a subsequent stacktest, provided that Consumers uses the test methods and procedures specified within Paragraphs 154, 155, and 156 or test protocols otherwise previously approved by EPA. 196. Violations ofany limit based on a 30-Day Rolling Average Emission Rate constitute 30 Days ofviolation but where such a violation (forthe same pollutant and from the
same Unit) recurs within periods less than 30 Operating Days, Consumers shall not be obligated to pay a daily stipulated penalty for any Day ofthe recurrence for which a stipulated penalty has already been paid. 197. Violations ofany limit based on a 90-Day Rolling Average Emission Rate constitute 90 Days ofviolation but where such a violation (forthe same pollutant and from the
same Unit) recurs within periods less than 90 Operating Days, Consumers shall not be obligated to pay a daily stipulated penalty for any Day ofthe recurrence for which a stipulated penalty has already been paid. 198. Violations ofany limit based on a 365-Day Rolling Average Emission Rate constitute 365 Days ofviolation but where such a violation (forthe same pollutant and from the
same Unit) recurs within periods less than 365 Operating Days, Consumers shall not be obligated to pay a daily stipulated penalty for any Day ofthe recurrence for which a stipulated penalty has already been paid. 60

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199. Consumers shall not be subjectto stipulated penalties for a failure to comply with any 30-Day Rolling Average Emission Rate for 

### NOx, or any 30-Day Rolling Average Emission Rate for 

### S02 that will be metthrough the use ofFGD as required by Paragraphs 112, 117, and 118, due to a startup or shutdown event provided that (a) Consumer's emissions do not exceed the 30-Day Rolling Average

### NOx or

### S02 Emission Rate by more than 0.015 lb/mmBTU, (b) in the next periodic reporting period, Consumers provides EPA with data and calculations to demonstrate a startup or shutdown event occurred and but for the startup or shutdown event, Consumers would have achieved and maintained compliance with the applicable 30-Day Rolling Average Emission Rate for 

### NOx or 

### S02, and (c) Consumers identifies the time period ofthe event, provides EPA with data regarding the flue gas temperature entering each applicable control device during the startup or shutdown event and provides a briefdescription ofwhy such startup/shutdown conditions limited or impeded the operation ofapplicable pollution control device(s). For all Units otherthan those at the Campbell plant, Consumers may only invoke this provision in relation to five startup or shutdown events percalendaryearper Unit during the term ofthis ConsentDecree. For Units atthe Campbell plant, Consumers may only invoke this provision in relation to seven startup or shutdown events per calendaryearperUnit during the term ofthis Consent Decree. Forpurposes ofthis Paragraph 199, a startup or shutdown event may not extend more than 72 hours. This provision applies only to the calculation ofstipulated penalties, and shall not be included in any permit. 200. In addition, only for purposes ofthe 90-Day Rolling Average Emission Rate for 

### NOx required by Paragraphs 79 and 82 for Campbell Units 2 and 3, Consumers shall not be subjectto stipulated penalties for a failure to comply with the 90-Day Rolling Average Emission 61

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Rate for NOx due to a startup or shutdown eventprovided that (a) Consumer'semissions do not exceed the 90-Day Rolling Average NOx Emission Rate by more than 0.0151b/mmBTU, (b) in the next periodic reporting period, Consumers provides EPA with data and calculations to demonstrate a startup or shutdown event occurred and butfor the startup or shutdown event, Consumers would have achieved and maintained compliance with the applicable 90-Day Rolling Average Emission Rate forNOx, and (c) Consumers identifies the time period ofthe event, provides EPA with data regarding the flue gas temperature entering each applicable control device during the startup or shutdown event and provides a briefdescription ofwhy such startup/shutdown conditions limited or impeded the operation ofapplicable pollution control device(s). For all Units otherthan those atthe Campbell plant, Consumers may only invoke this provision in relation to five startup or shutdown events percalendaryearper Unit during the term ofthis Consent Decree. ForUnits at the Campbell plant, Consumers may only invoke this provision in relation to seven startup or shutdown events percalendaryearper Unit during the term ofthis Consent Decree. Forpurposes ofthis Paragraph 200, a startup or shutdown event may not extend more than 72 hours. This provision applies only to the calculation ofstipulated penalties, and shall not be included in any permit. 201. All stipulated penalties shall begin to accrue on the Day after the performance is due oron the Day a violation occurs, whichever is applicable, and shall continue to accrue until performance is satisfactorily completed oruntil the violation ceases, whichever is applicable. Nothing in this Consent Decree shall preventthe simultaneous accrual ofseparate stipulated penalties for separate violations ofthis ConsentDecree.



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202. For purposes ofthe stipulated penalty Surrender ofAllowances required pursuant to subparagraphs 195(g) and (s), Consumers shall make the Surrender ofany Allowances required by such subparagraphs by June 30 ofthe immediately following calendaryear. 203. Consumers shall pay all stipulated penaltiesto the United States within 30 Days ofreceipt ofwritten demand to Consumers from the United States, and shall continue to make such payments every 30 Days thereafter until the violation(s) no longer continues, unless Consumers elects within 20 Days ofreceipt ofwritten demand to Consumers from the United Statesto dispute the accrual ofstipulated penalties in accordance with the provisions in Section XVI (Dispute Resolution) ofthis ConsentDecree. 204. Stipulated penalties shall continue to accrue as provided in accordance with Paragraph 20I during any dispute, with interest on accrued stipulated penalties payable and calculated atthe rate established by the Secretary ofthe Treasury, pursuantto 28 U.S.C. § 1961, but need not be paid until the following:
a. Ifthe dispute is resolved by agreement, orby a decision ofthe United States pursuantto Section XVI (Dispute Resolution) ofthis ConsentDecree that is not appealed to the Court, accrued stipulated penalties agreed or determined to be owing, togetherwith accrued interest, shall be paid within 30 Days ofthe effective date ofthe agreement or of the receipt ofthe United States' decision; b. Ifthe dispute is appealed to the Court and the United States prevails in whole or in part, Consumers shall, within 30 Days ofreceipt ofthe Court's decision or order, pay all accrued stipulated penalties determined by the Courtto be owing, togetherwith

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interest accrued on such penalties determined by the Courtto be owing, except as provided in subparagraph c, below;
c. Ifthe Court'sdecision is appealed by either Party, Consumers shall, within 15 Days ofreceipt ofthe final appellate court decision, pay all accrued stipulated penalties determined by the appellate courtto be owing, together with interest accrued on such stipulated penalties. Notwithstanding any otherprovision ofthis ConsentDecree, the accrued stipulated penalties agreed by the United States and Consumers, ordetermined by the United Statesthrough Dispute Resolution, to be owing may be less than the stipulated penalty amounts set forth in Paragraph 195. 205. All monetary stipulated penalties shall be paid in the manner set forth in Section X (Civil Penalty) ofthis Consent Decree and all SurrenderofAllowances stipulated penalties shall comply with the Surrender ofAllowances procedures ofParagraphs 107-109 and 138-140. 206. Should Consumers fail to pay stipulated penalties in compliance with the terms of this Consent Decree, the United States shall be entitled to collect interest on such penalties, as provided for in 28 U.S.C. § 1961. 207. The stipulated penalties provided for in this ConsentDecree shall be in addition to any otherrights, remedies, or sanctions available to the United States by reason ofConsumers' failure to comply with any requirement ofthis Consent Decree or applicable law, exceptthat for any violation ofthe Act (including the Act's implementing regulations and permits) for which this Consent Decree provides for payment ofa stipulated penalty, Consumers shall be allowed a credit for stipulated penalties paid against any statutory penalties also imposed for such violation. 64

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208. Affirmative Defense as to Stipulated Penalties for Excess Emissions Occurring During Malfunctions: Ifany ofConsumers' Units exceed an applicable 30-Day or90-Day Rolling Average Emission Rate for NOx or 30-Day or90-Day Rolling Average Emission Rate for SOz set forth in this Consent Decree due to Malfunction, Consumers, bearing the burden of proof, has an affirmative defense to stipulated penalties underthis Consent Decree, ifConsumers has complied with the reporting requirements ofParagraphs 21 0 and 211 and has demonstrated all ofthe following:
a. the excess emissions were caused by a sudden, unavoidable breakdown of technology, beyond Consumers' controI; b. the excess emissions (1) did not stem from any activity oreventthat could have been foreseen and avoided, orplanned for, and (2) could not have been avoided by betteroperation and maintenance practices;
c. to the maximum extent practicable, the air pollution control equipment and processes were maintained and operated in a manner consistent with good practice for minimizing emissions; d. repairs were made in an expeditious fashion when Consumers knew or should have known that an applicable 30-Day or 90-Day Rolling Average Emission Rate
was being exceeded. Off-shift labor and overtime musthave been utilized, to the extent practicable, to ensure that such repairs were made as expeditiously as practicable;
e. the amount and duration ofthe excess emissions (including any bypass) were minimized to the maximum extent practicable during periods ofsuch emissions; 

### 65

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f. all possible steps were taken to minimize the impact ofthe excess emissions on ambient airquality; g. all emission monitoring systems were kept in operation ifat all possible; h. Consumers' actions in response to the excess emissions were documented by validated, contemporaneous operating logs, or otherrelevant evidence; 

### i. the excess emissions were notpart ofa recurring pattern indicative ofinadequate design, operation, or maintenance; and 

### J. Consumers properly and promptly notified EPA as required by this Consent Decree. 209. To assert an affirmative defense for Malfunction under Paragraph 208, Consumers shall submit all data demonstrating the actual emissions for the Day the Malfunction
occurs and the 29-Day or 89-Day period, as applicable, following the Day the Malfunction
occurs. Consumers may, ifit elects, submitemissions data for the same 30-Day or 90-Day period butthat excludes the excess emissions. 210. Foran affirmative defense under Paragraph 208, Consumers, bearingthe burden ofproof, shall demonstrate, through submission ofthe data and information underthe reporting provisions ofthis Section, that all reasonable and practicable measures within Consumers' control were implemented to preventthe occurrence ofthe excess emissions. 211. Consumers shall provide notice to Plaintiffin writing ofConsumers' intentto assert an affirmative defense for Malfunction under Paragraph 208, in Consumers' semi-annual progress reports as required by Paragraph 188. This notice shall be submitted pursuant to the provisions ofSection XIX (Notices). The notice shall contain: 66

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a. The identity ofeach stack orotheremission point where the excess emissions occurred; b. The magnitude ofthe excess emissions expressed in lb/mmBTU and the operating data and calculations used in determining the magnitude ofthe excess emissions;
c. The time and duration orexpected duration ofthe excess emissions; d. The identity ofthe equipment from which the excess emissions emanated;
e. The nature and cause ofthe excess emissions; f. The steps taken to remedy the Malfunction and the steps taken orplanned to preventthe recurrence ofthe Malfunction; g. The steps that were or are being taken to limitthe excess emissions; and h. Ifapplicable, a list ofthe steps taken to comply with permit conditions governing Unit operation during periods ofMalfunction. 212. A Malfunction shall not constitute a Force Majeure Event unless the Malfunction also meets the definition ofa Force Majeure Event, as provided in Section XV (Force Majeure). 213. The affirmative defense provided herein is only an affirmative defense to stipulated penalties for violations ofthis ConsentDecree, and not a defense to any civil or administrative action for injunctive relief. 

### XV. FORCEMAJEURE 214. For purposes ofthis Consent Decree, a "Force Majeure Event" shall mean an eventthat has been orwill be caused by circumstances beyond the control ofConsumers, its contractors, orany entity controlled by Consumers that delays qompliance with any provision of this Consent Decree orotherwise causes a violation ofany provision ofthis Consent Decree 67

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 71 of 115 Pg ID 92

despite Consumers' best efforts to fulfill the obligation. "Bestefforts to fulfill the obligation" include using the bestefforts to anticipate any potential Force Majeure Event and to address the effects ofany such event (a) as it is occurring and (b) after it has occurred, such thatthe delay and any adverse environmental effect ofthedelay orviolation is minimized to the greatest extent possible. 215. Notice ofForce Majeure Events. Ifany eventoccurs orhas occurred that may delay compliance with or otherwise cause a violation ofany obligation under this Consent Decree, as to which Consumers intends to assert a claim ofForce Majeure, Consumers shall notify Plaintiffin writing as soon as practicable, but in no event later than 21 Days following the date Consumers first knew, or by the exercise ofdue diligence should have known, that the event caused or may cause such delay orviolation. In this notice, Consumers shall reference this Paragraph 215 ofthis Consent Decree and describe the anticipated length oftime that the delay
or violation may persist, the cause or causes ofthe delay orviolation, all measures taken orto be taken by Consumers to prevent or minimize the delay and any adverse environmental effect of the delay or violation, the schedule by which Consumers proposes to implementthose measures, and Consumers' rationale for attributing a delay or violation to a Force Majeure Event. Consumers shall adopt all reasonable measures to avoid or minimize such delays orviolations. Consumers shall be deemed to know ofany circumstance which Consumers, its contractors, or any entity controlled by Consumers knew or should have known. 216. Failure to Give Notice. IfConsumers fails to comply with the notice requirements ofthis Section, the United States may void Consumers' claim for Force Majeure as to the specific event for which Consumers has failed to comply with such notice requirement. 

### 68

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217. United States' Response. The United States shall notify Consumers in writing regarding Consumers' claim ofForce Majeure as soon as reasonably practicable. Ifthe United States agrees that a Force Majeure Event has delayed orprevented, or will delay orprevent, compliance with any provision ofthis ConsentDecree, or has otherwise caused orwill cause noncompliance with any provision ofthis ConsentDecree, the United States and Consumers shall stipulate to an extension ofdeadline(s) for performance ofthe affected compliance requirement(s) by a period equal to the delay or period ofnoncompliance actually caused by the event. In such circumstances, an appropriate modification shall be made pursuantto Section XXIII (Modification) ofthis ConsentDecree. 218. Disagreement. Ifthe United States does not accept Consumers' claim ofForce Majeure, or ifthe United States and Consumers cannot agree onthe length ofthe delay actually caused by the Force Majeure Event, the matter shall be resolved in accordance with Section XVI (Dispute Resolution) ofthis Consent Decree. 219. Burden ofProof. In any dispute regarding Force Majeure, Consumers shall bear the burden ofproving that any delay in performance or any other violation ofany requirement of this ConsentDecree was caused by or will be caused by a Force Majeure Event. Consumers shall also bearthe burden ofprovingthat Consumers gave the notice required by this Section XV (Force Majeure) and the burden ofproving the anticipated duration and extent ofany delay(s) attributable to a Force Majeure Event. An extension ofone compliance date based on a particular event may, but will not necessarily, result in an extension ofa subsequent compliance date.

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220. Events Excluded. Unanticipated orincreased costs orexpenses associated with the performance ofConsumers' obligations underthis ConsentDecree shall not constitute a Force Majeure Event. 221. Potential Force Majeure Events. The Parties agree that, depending upon the circumstances related to an event and Consumers' response to such circumstances, the kinds of events listed below are amongthose that could qualify as Force Majeure Events within the meaning ofthis Section: construction, labor, orequipmentdelays; Malfunction ofa Unitor emission control device; unanticipated coal supply orpollution control reagent delivery interruptions; acts ofGod; acts ofwar orterrorism; and orders by a government official, government agency, other regulatory authority, ora regional transmission organization, acting under and authorized by applicable Jaw, that directs Consumersto supply electricity in response to a system-wide (state-wide orregional) emergency oris necessary to preservethe reliability of the bulk power system. Depending upon the circumstances and Consumers' response to such circumstances, failure ofa permitting authority to issue a necessary permit in a timely fashion may constitute a Force Majeure Event where the failure ofthe permitting authority to act is beyond the control ofConsumers and Consumers has taken all steps available to itto obtain the necessary permit, including, but not limited to: submitting a complete permit application; responding to requests for additional information by the permitting authority in a timely fashion; and accepting lawful permitterms and conditions after expeditiously exhausting any legal rights to appeal terms and conditions imposed by the permitting authority. 222. As part ofthe resolution ofany matter submitted to this Courtunder Section XVI (Dispute Resolution) regarding a claim ofForce Majeure, the United States and Consumers by 70

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agreement, or this Court by order, may in appropriate circumstances extend ormodify the schedule for completion ofwork under this Consent Decree to account for the delay in the work that occurred as a result ofany delay agreed to by the United States orapproved by the Court. Consumers shall be liable for stipulated penaltiespursuantto Section XIV (Stipulated Penalties) for its failure thereafter to complete the work in accordance with the extended or modified schedule (provided that Consumers shall not be precluded from making a further claim ofForce Majeure with regard to meeting any such extended ormodified schedule). XVI. DISPUTE RESOLUTION 223. The dispute resolution procedure provided by this Section XVI (Dispute Resolution) shall be available to resolve all disputes arising under this ConsentDecree, provided that the Party invoking such procedure has first made a good faith attemptto resolve the matter with the other Party. 224. The dispute resolution procedure required herein shall be invoked by one Party giving written notice to the other Party advising ofa dispute pursuantto this Section. The notice shall describe the nature ofthe dispute and shall state the noticing Party'sposition with regard to such dispute. The Party receiving such a notice shall acknowledge receipt ofthe notice, and the Parties in dispute shall expeditiously schedule a meeting to discuss the dispute informally not laterthan 14 Days following receipt ofsuch notice. 225. Disputes submitted to dispute resolution underthis Section shall, in the first instance, be the subject ofinformal negotiations between the Parties. Such period ofinformal negotiations shall not extend beyond 30 Days from the date ofthe first meeting between the Parties' representatives unless they agree in writing to shorten or extend this period. 71

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226. Ifthe Parties are unable to reach agreementduring the informal negotiation period, the United States shall provide Consumers with a written summary oftheirposition regarding the dispute. The written position provided by the United States shall be considered binding unless, within 45 Daysthereafter, Consumers seeksjudicial resolution ofthe dispute by filing a petition with this Court. The United States may submit a response to the petition within 45 Days offiling. 227. The time periods set out in this Section XVI (Dispute Resolution) may be shortened orlengthened upon motion to the Courtofone ofthe Partiesto the dispute, explaining the Party'sbasis for seeking such a scheduling modification. 228. This Court shall notdraw any inferences norestablish any presumptions adverse to either Party as a result ofinvocation ofthis Section XVI (Dispute Resolution) orthe Parties' inability to reach agreement. 229. As partofthe resolution ofany dispute underthis Section XVI (Dispute Resolution), in appropriate circumstancesthe Parties may agree, orthis Court may order, an extension ormodification ofthe schedule for the completion ofthe activities required underthis Consent Decree to account for the delay that occurred as a result ofdispute resolution. Consumers shall be liable for stipulated penalties pursuantto Section XIV (Stipulated Penalties) for its failure thereafterto completethe work in accordance with the extended ormodified schedule, provided that Consumers shall not be precluded from asserting that aForce Majeure Eventhas caused ormay cause a delay in complying with the extended ormodified schedule. 230. The Court shall decide all disputes pursuantto applicable principles oflaw for resolving such disputes. In their filings with the Courtunder Paragraph 226, the Parties shall 72

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 76 of 115 Pg ID 97

state their respective positions as to the applicable standard oflaw for resolving the particular dispute. 

### XVII. PERMITS 231. Unless expressly stated otherwise in this ConsentDecree, in any instance where otherwise applicable law orthis ConsentDecree requires Consumers to secure a permitto authorize construction oroperation ofany device, including all preconstruction, construction, and operating permits required under State law, Consumers shall make such application in a timely manner. EPA will use its best efforts to review expeditiously all permit applications submitted by Consumers in orderto meet the requirements ofthis ConsentDecree. 232. Notwithstanding the previous Paragraph 231, nothing in this ConsentDecree shall be construed to require Consumers to apply for or obtain an NSRpermit for physical changes in,
orchange in the method ofoperation of, any Consumers System Unitthat would give rise to claims resolved by Paragraph 182 through 183, subjectto Paragraphs 184 through 187 ofthis Consent Decree. 233. When permits are required, Consumers shall complete and submit applications for such permits to the applicable agency to allow sufficienttime for all legally required processing and review ofthe permitrequest, including requests for additional information by the applicable agency. Any failure by Consumers to submit a timely permit application for a Consumers System Unit shall bar any use by Consumers ofSection XV (Force Majeure) ofthis Consent Decree, where a Force Majeure claim is based on permitting delays. 234. Notwithstanding the reference to Consumers' Title V Permits in this Consent Decree, the enforcement ofsuch permits shall be in accordance with their own terms and the Act 73

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 77 of 115 Pg ID 98

and its implementing regulations. Consumers' Title V Permits shall notbe enforceable under this Consent Decree, although any term or limit established by or under this ConsentDecree shall be enforceable underthis ConsentDecree regardless ofwhether such term has orwill become part ofa Title V Permit, subjectto the terms ofSection XXVII (Termination) ofthis Consent Decree. 235. Within 180 Days afterthe Date ofEntry ofthis Consent Decree, Consumers shall modify any applicable Title V Permit application(s) for the Campbell and Kam plants, or apply for modifications ofits Title V Permits, to include a schedule for all Unit-specific, plant-specific, and system-specific performance, operational, maintenance, and control technology requirements established by this Consent Decree including, but not limited to, any (a) 30-Day, 90-Day and 365-Day Rolling Average Emission Rates, (b) System-Wide Annual NOx and S02Tonnage Limitations, (c) the requirements pertaining to the SurrenderofNOx and S02 Allowances, (d) PM Emission Rate and annual stacktestrequirements, and (e) PM CEMS monitoring requirements. 236. Within one year from the Date ofEntry ofthis Consent Decree, Consumers shall either apply to permanently include the requirements and limitations enumerated in Paragraph 235 ofthis ConsentDecree into a federally enforceable non-Title V permit or request a sitespecific revision to the Michigan SIP to include such requirements and limitations. 237. Consumers shall provide the United States with a copy ofeach application for a federally enforceable permitorMichigan SIP amendment, as well as a copy ofany permit proposed as a result ofsuch application, to allowfor timely participation in any public comment opportunity. 

### 74

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238. Priorto termination ofthis ConsentDecree, Consumers shall obtain enforceable provisions in its Title V permits that incorporate all Unit-specific, plant-specific, and systemspecific performance, operational, maintenance, and control technology requirements enumerated in Paragraph 235 ofthis Consent Decree. 239. IfConsumers proposesto sell or transferto an entity unrelated to Consumers ("Third Party Purchaser") part orall ofits Operational or Ownership Interest covered under this Consent Decree, Consumers shall comply with the requirements ofSection XX (Sales or Transfers ofOperational or Ownership Interests) ofthis Consent Decree with regard to that Operational or Ownership Interest priorto any such sale ortransfer. 

### XVIII. INFORMATIONCOLLECTIONAND RETENTION 240. Any authorized representative ofthe United States, including its attorneys, contractors, and consultants, upon presentation ofcredentials, shall have a right ofentry upon the premises ofa Consumers System Unit at any reasonable time for the purpose of:
a. monitoring the progress ofactivities required underthis Consent Decree; b. verifying any data orinformation submitted to the United States in accordance with the terms ofthis Consent Decree;
c. obtaining samples and, upon request, splits ofany samplestaken by Consumers or its representatives, contractors, or consultants; and d. assessing Consumers' compliance with this Consent Decree. 241. Consumers shall retain, and instruct its contractors and agents to preserve, all nonidentical copies ofall records and documents (including records and documents in electronic form) now in its or its contractors' or agents' possession orcontrol, and that directly relate to 75

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Consumers' performance ofits obligations underthis ConsentDecree for the following periods: (a) until December 31, 2023, for records concerning physical or operational changes undertaken in accordance with Section IV (NOx Emission Reductions and Controls), Section V (S02 Emission Reductions and Controls), and Section VI (PM Emission Reductions and Controls); and (b) until December 31, 2019, for all other records. This record retention requirement shall apply regardless ofany corporate documentretention policy to the contrary. 242. All information and documents submitted by Consumers pursuantto this Consent Decree shall be subjectto any requests under applicable law providing public disclosure of documents unless (a) the information and documents are subjectto legal privileges orprotection
or (b) Consumers claims and substantiates in accordance with 40 C.F.R. Part 2 thatthe information and documents contain confidential business information. 243. Nothing in this Consent Decree shall limit the authority ofEPA to conducttests and inspections at Consumers' facilities under Section 114 ofthe Act, 42 U.S.C. 

### § 7414, or any other applicable federal law, regulation, orpermit. 

### XIX. NOTICES 244. Unless otherwise provided herein, whenevernotifications, submissions, or communications are required by this ConsentDecree, they shall be made in writing and addressed as follows: As to the United States ofAmerica: (ifby mail service) Chief, Environmental Enforcement Section Environment and Natural Resources Division U.S. Department ofJustice P.O. Box 7611, Ben Franklin Station Washington, DC 20044-7611 76

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 80 of 115 Pg ID 101 ------- -----------

OJ# 90-5-2-1-09771 (ifby commercial delivery service) Chief, Environmental Enforcement Section Environment and Natural Resources Division U.S. DepartmentofJustice ENRD Mailroom, Room 2121 60I D Street, NW Washington, DC 20004 OJ# 90-5-2-1-09771 and (ifby mail service) Director, Air Enforcement Division Office ofEnforcement and Compliance Assurance U.S. Environmental Protection Agency Mail Code 2242A 1200 Pennsylvania Avenue, NW Washington, DC 20460 (ifby commercial delivery service) Director, Air Enforcement Division Office ofEnforcement and Compliance Assurance U.S. Environmental Protection Agency Ariel Rios South Building, Room 1119 1200 Pennsylvania Avenue, NW Washington, DC 20004 and Director, Air Division U.S. EPA Region 5 77 W. Jackson Blvd. (AE-17J) Chicago, 

### IL 60604 As to Consumers: Catherine M. Reynolds General Counsel Consumers Energy Company One Energy Plaza Jackson, MI 49201 77

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 81 of 115 Pg ID 102**~------------------------------------~~------------** --

and Kevin 

### .1. Finto Hunton & Williams LLP Riverfront Plaza, East Tower 951 East Byrd Street Richmond, VA 23219 245. All notifications, communications, or submissions made pursuantto this Section shall be senteither by: (a) overnight mail orovernight delivery service with signature required for delivery, or (b) certified orregistered mail, return receiptrequested. All notifications, communications, and submissions (a) sent by overnight, certified, orregistered mail shall be deemed submitted on the date they are postmarked, or (b) sentby overnight delivery service shall be deemed submitted on the date they are delivered to the delivery service. 246. Either Party may change eitherthe notice recipient orthe address for providing notices to it by serving the other Party with a notice setting forth such new notice recipient or address. 

### XX. SALES ORTRANSFERS OFOPERATIONAL OROWNERSHIP INTERESTS 247. IfConsumers proposesto sell ortransfer an Operational or Ownership Interestto
a Third Party Purchaser, Consumers shall advise the Third Party Purchaser in writing ofthe existence ofthis Consent Decree prior to such sale ortransfer, and shall send a copy ofsuch written notification to the Plaintiffpursuantto Section XIX (Notices) ofthis Consent Decree at least 60 Days before such proposed sale ortransfer. 248. No sale ortransfer ofan Operational orOwnership Interest shall take place before the Third Party Purchaser and the United States have executed, and the Courthas approved, a modification pursuantto Section XXIII (Modification) ofthis Consent Decree making the Third 78

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Party Purchaser a party to this ConsentDecree andjointly and severally liable with Consumers for all the requirements ofthis Consent Decree that may be applicable to the transferred or purchased Operational orOwnership Interests. 249. This Consent Decree shall not be construed to impede the transfer ofany Operational or Ownership Interests between Consumers and any Third Party Purchaser so long
as the requirements ofthis Consent Decree are met. This Consent Decree shall notbe construed to prohibit a contractual allocation -asbetween Consumers and any Third Party Purchaser of Operational orOwnership Interests- ofthe burdens ofcompliance with this ConsentDecree, provided that both Consumers and such Third Party Purchaser shall remainjointly and severally liable to the United States for the obligations ofthis Consent Decree applicable to the transferred
orpurchased Operational or Ownership Interests. 250. Ifthe United States agrees, the United States, Consumers, and the Third Party Purchaserthat has become a party to this Consent Decree pursuantto Paragraph 248 may execute a modification that relieves Consumers ofits liability under this Consent Decree for, and makes the Third Party Purchaser liable for, all obligations and liabilities applicable to the purchased ortransferred Operational orOwnership Interests. Notwithstandingthe foregoing, however, Consumers may not assign, and may not be released from, any obligation underthis Consent Decree that is not specificto the purchased ortransferred Operational or Ownership Interests, including the obligations set forth in Sections IX (Environmental Mitigation Projects) and X (Civil Penalty). Consumers may propose and the United States may agree to restrictthe scope ofthejointand several liability ofany purchaser ortransferee for any obligations ofthis

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Consent Decree that are not specificto the transferred orpurchased Operational or Ownership Interests, to the extent such obligations may be adequately separated in an enforceable manner. 251. Paragraphs 248 through 250 ofthis ConsentDecree do not apply ifan Ownership Interest is transferred solely as collateral security in orderto consummate a financing arrangement (not including a sale-leaseback), so long as Consumers: (a) remains the operator (as thatterms is used and interpreted underthe Act) ofthe subjectUnit(s); (b) remains subjectto and liable for all obligations and liabilities ofthis Consent Decree; and (c) supplies the United States with the following certification within 30 Days after the transfer: Certification ofChange in Ownership Interest Solely for Purpose ofConsummating Financing. We, the ChiefExecutive Officer and General Counsel ofConsumers Energy Company ("Consumers"), herebyjointly certify underTitle 18 U.S.C. Section I00I, on our own behalfand on behalfofConsumers, that any change in Consumer's Ownership Interest in any Unitthat is caused by the creation ofa collateral security interest in such Unit(s) pursuantto the financing agreement consummated on [insert applicable date] between Consumers and [insert applicable entity]: a) is made solely for purpose ofproviding collateral security in orderto consummate a financing arrangement; b) does not impair Consumer's ability, legally or otherwise, to comply timely with all terms and provisions ofthe Consent Decree entered in UnitedStates v. Consumers Energy Company, Civil Action ;c) does not affect Consumers' operational control ofany Unit covered by that ConsentDecree in a mannerthat is inconsistentwith Consumers' performance ofits obligations underthe Consent Decree; and d) in no way affects the status ofConsumers' obligations or liabilities underthat Consent Decree. 

### XXI. EFFECTIVE DATE 252. The effective date ofthis ConsentDecree shall be the Date ofEntry. 

### XXII. RETENTION OFJURISDICTION 253. This Court shall retainjurisdiction ofthis case after entry ofthis ConsentDecree to enforce compliance with the terms and conditions ofthis Consent Decree and to take any action necessary orappropriate for the interpretation, construction, execution, or modification of 80

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the ConsentDecree, orfor adjudication ofdisputes. Duringthe term ofthis ConsentDecree, either Party to this Consent Decree may apply to this Court for any reliefnecessary to construe
or effectuate this Consent Decree. 

### XXIII. MODIFICATION 254. The terms ofthis Consent Decree may be modified only by a subsequent written agreement signed by the United States and Consumers. Where the modification constitutes a material change to any term ofthis Consent Decree, it shall be effective only upon approval by this Court. 

### XXIV. GENERAL PROVISIONS 255. When this Consent Decree specifies that Consumers shall achieve and maintain a 30-Day Rolling Average Emission Rate, the Parties expressly recognize that compliance with such 30-Day Rolling Average Emission Rate shall commence immediately upon the date specified and that compliance as ofsuch specified date (e.g., December 30) shall be determined based on data from the specified compliance date and the 29 prior Unit Operating Days (e.g., December 1-30). 256. When this Consent Decree specifiesthat Consumers shall achieve and maintain a 90-Day Rolling Average Emission Rate, the Parties expressly recognize that compliance with such 90-Day Rolling Average Emission Rate shall commence immediately upon the date specified and that compliance as ofsuch specified date (e.g., December 30) shall be determined based on data from the specified compliance date and the 89 prior Unit Operating Days (e.g., October 2 to December 30).

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257. When this Consent Decree specifies that Consumers shall achieve and maintain a 365-Day Rolling Average Emission Rate, the Parties expressly recognize that compliance with such 365-Day Rolling Average Emission Rate shall commence immediately upon the date specified and that compliance as ofsuch specified date (e.g., 365 Days from the Date ofEntry) shall be determined based on data from the specified compliance date and the 364 prior Unit Operating Days (e.g., the 365 Days immediately following the Date ofEntry). Similarly, ifthe specified date is June 30, 2015, compliance as ofsuch specified date shall be determined based
on data from July I, 2014to June 30, 2015. 258. This Consent Decree is not a permit. Compliance with the terms ofthis Consent Decree does not guarantee compliancewith all applicable federal, state, or local laws or regulations. The emission rates and removal efficiencies set forth herein do not relieve Consumers from any obligation to comply with other state and federal requirements underthe Clean Air Act, including Consumers' obligation to satisfy any State modeling requirements set forth in the Michigan SIP. 259. This Consent Decree does not apply to any claim(s) ofalleged criminal liability. 260. In any subsequent administrative orjudicial action initiated by the United States for injunctive reliefor civil penalties relating to the facilities covered by this Consent Decree, Consumers shall not assert any defense orclaim based upon principles ofwaiver, res judicata, collateral estoppel, issue preclusion, claim preclusion, or claim splitting, or any other defense based upon the contention thatthe claims raised by the United States in the subsequent proceeding were brought, or should have been brought, in the instant case; provided, however,

82

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that nothing in this Paragraph is intended to affect the validity ofSection XI (Resolution ofCivil Claims). 261. Nothing in this Consent Decree shall relieve Consumers ofits obligation to comply with all applicable federal, state, and local laws and regulations, including, but not limited to, the Clean Water Act and the National Pollutant Discharge Elimination System (NPDES) implementingregulations, National Ambient Air Quality Standards, the National Emission Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam Generating Units (Utility MACTorMATS), Standards ofPerformance for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial CommercialInstitutional Steam Generating Units (Utility NSPS). Nothing in this Consent Decree should be construed to provide any relieffrom the emission limits ordeadlines specified in such regulations, including, but not limited to, deadlines for the installation ofpollution controls required by any such regulations, nor shall this Consent Decree be construed as a predetermination ofeligibility for the one year extension that may be provided under42 U.S.C. 

### § 7412(i)(3)(B). 262. Subjectto the provisions in Section XI (Resolution of Civil Claims), nothing contained in this Consent Decree shall be construedto prevent or limit the rights ofthe United States to obtain penalties or injunctive reliefunderthe Act orother federal, state, orlocal statutes, regulations, orpermits. 263. Each limit and/or other requirement established by orunderthis Consent Decree is a separate, independent requirement.



### 83

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264. Performance standards, emissions limits, and otherquantitative standards set by
orunderthis Consent Decree must be metto the number ofsignificant digits in which the standard or limit is expressed. Forexample, an Emission Rate ofO.lOO is not met ifthe actual Emission Rate is 0.1 0I. Consumers shall round the fourth significantdigitto the nearestthird significant digit, orthe third significant digit to the nearest second significant digit, depending upon whetherthe limit is expressedto three ortwo significant digits. Forexample, ifan actual Emission Rate is 0.1004, that shall be reported as 0.1 00, and shall be in compliance with an Emission Rate of0.100, and ifan actual Emission Rate is 0.1005, that shall be reported as 0.101, and shall not be in compliance with an Emission Rate of0.100. Consumers shall reportdatato the number ofsignificant digits in which the standard or limit is expressed. 265. This Consent Decree does not limit, enlarge, oraffect the rights ofany Party to this Consent Decree as against any third parties. 266. This Consent Decree constitutes the final, complete, and exclusive agreement and understanding amongthe Parties with respectto the settlementembodied in this Consent Decree, and supersedes all prior agreements and understandings among the Parties related to the subject matter herein. No document, representation, inducement, agreement, understanding, orpromise constitutes any part ofthis Consent Decree orthe settlement it represents, nor shall they be used in construing the terms ofthis Consent Decree. 267. Each Party to this action shall bear its own costs and attorneys' fees. 

### XXV. SIGNATORIES AND SERVICE 268. The undersigned representative ofConsumers, and the Assistant Attorney General for the Environment and Natural Resources Division ofthe Department ofJustice, certifies that 84

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he or she is fully authorized to enter into the terms and conditions ofthis ConsentDecree and to execute and legally bind tothis documentthe Party he or she represents. 269. This Consent Decree may be signed in counterparts, and such counterpart signature pages shall be given full force and effect. 270. Each Party hereby agrees to accept service ofprocess by mail with respectto all matters arising under orrelating to this Consent Decree and to waive the formal service requirements setforth in Rule 4 ofthe Federal Rules ofCivil Procedure and any applicable Local Rules ofthis Court including, but not limited to, service ofa summons. 271. Unless otherwise ordered by the Court, the Plaintiffagrees that Consumers will not be required to file any answer orotherpleading responsive to the concurrently filed Complaint in this matteruntil and unless the Court expressly declines to enterthis Consent Decree, in which case Consumers shall have no less than 30 days afterreceiving notice ofsuch express declination to file an answer or otherpleading in response to the Complaint XXVI. PUBLIC COMMENT 272. The Parties agree and acknowledge thatfinal approval by the United States and entry ofthis Consent Decree is subjectto the procedures of28 C.F.R. 

### § 50.7, providing for notice ofthe lodging ofthis ConsentDecree in the Federal Register, an opportunity for public comment, and the right ofthe United States to withdraw orwithhold consent ifthe comments disclose facts orconsiderations that indicate thatthis ConsentDecree is inappropriate, improper,
or inadequate. Consumers shall not oppose entry ofthis Consent Decree by this Courtor challenge any provision ofthis ConsentDecree unless the United States has notified Consumers, in writing, that the United States no longer supports entry ofthis Consent Decree. 85

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XXVII. TERMINATION 273. Once Consumers has:
a. completed the requirements ofSections IV (NOx Emission Reductions and Controls), V (S02 Emission Reductions and Controls), VI (PM Emission Reductions and Controls), VIII (Wind PowerCommitment), IX (Environmental Mitigation Projects); b. maintained continuous compliance with this Consent Decree, including continuous operation ofall pollution controls required by this ConsentDecree, for
a period of24 months, and has successfully completed all actions necessary to Retire or Refuel to Natural Gas any Unitrequired orelected to be Retired or Refueled to Natural Gas as required by this Consent Decree;
c. paid the civil penalty and any accrued stipulated penalties as required by this Consent Decree; d. either included the requirements and limitations enumerated in this Consent Decree into a federally enforceable permit orobtained a site-specific amendment to the Michigan SIP for each plant in the Consumers System, as required by Section XVII (Permits) ofthis Consent Decree such thatthe requirements and limitations enumerated in this ConsentDecree, including all Unit-specific, plantspecific, and system-specific performance, operational, maintenance, and control technology requirements established by this ConsentDecree become and remain "applicable requirements" as thatterm is defined in 40 C.F.R. Part 70.2; and

86

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e. certified thatthe date ofConsumers' Request for Termination is laterthan December 31, 2019, Consumers may serve upon the United States a Request for Termination, stating that Consumers has satisfied those requirements, together with all necessary supporting documentation. 274. Following receipt by the United States ofConsumers' Request for Termination, the Parties shall confer informally concerningthe Request and any disagreement thatthe Parties may have as to whether Consumers has complied with the requirements for termination ofthis Consent Decree. Ifthe United States agrees that the Decree may be terminated, the Parties shall submit, for the Court's approval, ajoint stipulation terminating the Decree. 275. Ifthe United States does not agree that the Decree may be terminated, Consumers may invoke Dispute Resolution under Section XVI ofthis Decree. However, Consumers shall not seek Dispute Resolution ofany dispute regarding termination, under Paragraph 224 of Section XVI, until 60 days after service ofits Request for Termination orreceipt ofan adverse decision from the United States, whichever is earlier. 

### XXVIII. FINALJUDGMENT 276. Upon approval and entry ofthis ConsentDecree by this Court, this Consent Decree shall constitute a finaljudgmentbetween the Parties.



### 87Signature Page for UnitedStates of Americav. Consumers Energy CompanyConsent Decree FOR THE UNITED STATES DEPARTMENT OF JUSUCE Respectfully submitted,

SAM HIRSCH Acting Assistant Attorney General Environment and Natural Resources Division United StatesDepartment ofJustice

SeniorAttorney Environmental Enforcement Section Environment and Natural Resources Division

88 

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### Signature Page for 

### UnitedStates of Americav. Consumers Energy Company Consent Decree FORTHE UNITED STATES DEPARTMENT OF JUSTICE Respectfully submitted,
BARBARA L. McQuade United States Attorney Eastern District ofMichigan
ELLEN CHRISTENSEN Assistant United States Attorney Eastern District ofMichigan 211 W. Fort St., Suite 2001 Detroit, MI48226

88a 

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 92 of 115 Pg ID 113

### Signature Page for UnitedStates of Americav. Consumers Energy Company 

### Consent Decree
FOR TIIE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

Assist dministrator Office ofEnforcement and

Compliance Assurance United States Environmental

Protection Agency

Director, ir Enforcement Division United States Environmental

Protection Agency

Attorney-Advisor United States Environmental

Protection Agency

84 

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 93 of 115 Pg ID 114Signature Page for 

### UnitedStates of America v. Consumers Energy Company ConsentDecree FORTHE UNITED STATES ENVIRONMENTALPROTECTIONAGENCY Respectfully submitted,

SUSANHEDMAN Regional Administrator United States Environmental ProtectionAgency, Region 5

t/! \h-·-/ Regional Counsel United StatedEnvironmental ProtectionAgency, Region 5

Associate Regional Counsel United States Environmental Protection Agency, Region 5
MICHAEL R. BERMAN Associate Regional Counsel United StatesEnvironmental Protection Agency, Region 5



### 90 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 94 of 115 Pg ID 115Signature Page for 

### UnitedStates of Americav. ConsumersEnergy Company Consent Decree FOR CONSUMERS ENERGY COMPANY By: ackson Hanson SeniorVice-President

91 

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### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 96 of 115 Pg ID 117

APPENDIXA ENVIRONMENTAL MITIGATIONPROJECTS Consumers shall spend no less than$ 7.7 million and shall comply with the requirements ofthis Appendix and with Section IX (Environmental Mitigation Projects) ofthe Consent Decree to implement and secure the environmental benefits ofeach Project. Nothing in the Consent Decree or in this Appendix shall require Consumersto spend any more than a total of$7.7 million on Environmental Mitigation Projects. 

### I. National Park ServiceEcological Restoration ($500,000) A. Within 45 Days from the Date ofEntry ofthe Consent Decree, Consumers shall pay $500,000 to the National Park Service in accordance with 16 U.S.C. § 19jj for the restoration ofland, watersheds, vegetation, and forests using techniques designed to improve ecosystem health and mitigate harmful effects from airpollution. Projects will focus on ecological restoration or invasive species remediation in the Cuyahoga Valley National Park and the Sleeping BearDunes National Lakeshore Park. B. Payment ofthe amount specified in the preceding Paragraph shall be made to the Natural Resources Damage and Assessment Fund managed by the United States Department ofthe Interior. Instructions for transferring funds will be provided to Consumers by the National Park Service. Notwithstanding Section I.A ofthis Appendix, payment offunds is not due until ten (10) days afterreceipt ofpayment instructions. Upon paymentofthe required funds into the Natural Resource Damage and AssessmentFund, Consumers shall have no further responsibilities regarding the implementation ofthe ecological restoration or invasive species projects implemented by the National Park Service in connection with this provision. 

### II. Overall Schedule and Budgetfor Additional Environmental Mitigation Projects A. Within 180 Days from the Date ofEntry, unless otherwise specified by this Appendix, Consumers shall submitproposed plans (ProjectPlans) to EPA for review and approval pursuantto Section XIII ofthe Consent Decree (Review and Approval ofSubmittals) for spending$ 7.2 million in Project Dollars for the Projects specified in Sections Ill-VII of this Appendix. EPA reserves the rightto disapprove any project after an analysis ofits Project Plan. B. Consumers may, at its election, consolidate the Project Plans required by this Appendix into one or more Project Plans. C. Unless otherwise specified by this Appendix, Consumers may, at its election, spread its payments for Environmental Mitigation Projects over a five-year period commencing upon the Date ofEntry. Consumers may also accelerate its payments to bettereffectuate a Project Plan, but Consumers shall not be entitled to any reduction in the nominal amount ofthe required payments by virtue ofthe early expenditures. Any funds

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 97 of 115 Pg ID 118

designated for a specific Projectthat are leftunspent, orare projected to be left unspent, atthe Project's completion may be redirected by Consumers, after consultation with and approval by EPA, to one or more ofthe Projects listed in Sections III-VII below. D. All proposed Project Plans shall includethe following: I. A plan for implementingthe Project. 2. A summary-level budget for the Project. 3. A time line for implementation ofthe Project. 4. A description ofthe anticipated environmental benefits ofthe Project including an estimate ofany emission reductions or mitigation expectedto be realized, andthe methodology and any calculations used in the derivation ofsuch expected benefits, reductions, or mitigation. 5. An estimate ofthe cost-effectiveness ofthe proposed Projectexpressed in dollars per ton ofpollutant reduction. E. Upon approval by EPA ofthe Project Plan(s) required by this Appendix, Consumers shall complete the approved Projects accordingto the approved ProjectPlan(s). Nothing in the Consent Decree shall be interpreted to prohibit Consumers from completingthe Projects ahead ofschedule. F. IfConsumers opts notto perform a Project for which it has submitted a Plan thathas been approved by EPA, then it shall indicate withdrawal from the Project in its next progress report due pursuantto Section XII (Periodic Reporting) ofthe Consent Decree. Consumers will not have any obligation for such Projectpursuantto the Consent Decree, provided that Consumers is otherwise in compliance with the Environmental Mitigation Project requirements ofthe ConsentDecree, which may include performing one ormore Projects approved by EPA pursuantto Sections III-VII ofthis Appendix. G. Nothing in this Appendix shall relieve Consumers of its obligation to comply with all applicable federal, state, and local laws and regulations, including, but not limited to, any obligationsto obtain any permits pursuanttothe Clean WaterAct or Clean AirAct.

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III. Vehicle Replacement, Retrofit and Fueling Infrastructure Projects (Up to $3.0 million) A. Consistentwith the requirements ofthe ConsentDecree and Appendix, Consumers shall propose a Plan and shall spend up to$ 3.0 million on vehicle replacement and/or retrofit projects and/or fueling infrastructureprojects. B. Definitions: I. "Alternative Fuel Vehicle" means a vehicle thatruns exclusively orpartially on a non-petroleum fuel (e.g., Compressed Natural Gas (CNG), Plug-in Extended Range Hybrid Vehicle (PHEV), or Plug-in Electric Vehicle (PEV)). 2. "Compressed Natural Gas (CNG) Vehicle" means a vehicle thatruns exclusively on CNG. 3. "Plug-In Electric Vehicle (PEV)" means a vehicle that does not utilize an internal combustion engine and instead relies entirely on battery powerfor propulsion. 4. "Plug-in Extended Range Hybrid Vehicle (PHEV)" means a vehicle that can be charged from an external source and can generate, store, and utilize electric powerto reduce the vehicle's consumption offossil fuel. These vehicles typically operate exclusively underbattery powerfor a designated range, switchingto gasoline when battery power is depleted. 5. "RenewableEnergy Credit" means a credit granted pursuantto MCL 460.1039 or the national Green-e Energy program that represents generated renewable energy. C. Vehicle Replacement and Retrofit Projects 1. Vehicle Replacement Projects
a. Consumers would replace existing gasoline and/or diesel powered vehicles (passenger cars, lighttrucks, and heavy duty service vehicles) with newly manufactured Alternative Fuel Vehicles and/or CNG Vehicles (collectively, Vehicle Replacement Project). Such vehicles may be owned by Consumers or shall be publicly owned motor vehicles. b. All Vehicle ReplacementProjectvehicles shall meet all applicable engine standards, certifications, and/or verifications and shall be retained and operated for theiruseful life.
c. Consumers shall receive Project Dollarcredit for only the incremental cost ofa Vehicle Replacement Project vehicle, as compared to the cost ofa newly manufactured, similarmotor vehicle powered by conventional diesel or gasoline engmes
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d. Vehicles that are being replaced shall be permanently retired from use by Consumers orany otherentity and shall be disposed ofin accordance with all applicable laws. Consumers reserves the right to sell the vehicles for salvage.
e. Consumers may consider and implement additional options to enhance Alternative Fuel Vehicle and/or CNG vehicle usage, such as to: I) Provide a purchase incentive for acquisition ofPHEV, PEV, CNGvehicle; 2) Fund low-interest loans through banks and dealers for such vehicles; or 3) Provide direct cash incentivesto consumers for such vehicle purchase. 2. Vehicle Retrofit Projects
a. Consumers would retrofit existing diesel engines with engines that have emission control equipmentdesigned to reduce emissions ofNOx, particulates, and/or ozone precursors. Such engines may be owned by Consumers or shall be publicly owned motor vehicles. b. Consumers mustprovide a mechanism for each replaced engine to be properly disposed of, which must include destruction oftheengine block.
c. Consumers shall receive ProjectDollarcredit for only the cost ofthe new engine and the retrofit process ofan engine for a Vehicle Retrofit Project. d. For any third party whom Consumers might contract with to carry out any ofthe project, Consumers shall establish minimum standards that include prior experience in performing engine retrofits. 3. The following vehicles shall be prioritized for retrofit orreplacement in the Project: (a) diesel vehicles (b) oldermodel vehicles, (c) high use vehicles, (d) vehicles in areas with poor air quality, and (e) vehicles in areas with public health concerns related to vehicle pollution, which may include environmentaljustice communities. 4. Jn addition to the information required to be included in periodic reports submitted pursuantto Paragraph 188 ofthe Consent Decree, for each Vehicle Replacement Project, Consumers shall include the following information (unless such information has already been submitted in a priorreport orplan): (a) identification ofthe vehicles replaced orretrofitted duringthe period covered by the periodic report, (b) the method to account for the amount ofProject Dollars that will be credited for each Vehicle Replacement Project vehicle, (c) the per vehicle Project Dollars spentduring the period covered by the periodic report, and (d) identification ofany additional incentive option programsthat will be administered to encourage vehicle replacements for Alternative Fuel Vehicles and/or CNG vehicles.

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D. Fuel Infrastructure Projects 1. Fuel infrastructure projects shall be designed to enhancethe electric vehicle charging infrastructure orcompressed natural gas fueling infrastructure in Michigan. 2. Consumers may undertake enhancementsto the electric vehicle charging or compressed natural gas fueling infrastructure by funding creation ofone ormore charging stations for electric vehicles ornatural gas fueling stations. Prioritization shall be consistent with the Vehicle Replacement orRetrofit Projects and at locations in Bay, Monroe, Muskegon, Ottawa, Jackson and adjacent counties in Michigan, but may also be selected in accordance with Subsection 3 below. 3. IfConsumers elects to undertake this Project, it may partner with third party organizations to handle funding and selection oflocations in Michigan. Locations would be soughtto maximize the number ofvehicles that could utilize the chargers or natural gas fueling station while striving to expand the network ofelectric vehicle charging stations ornatural gas fueling stations in Michigan. Potential sites could consist oflocations thatprovide public access, includingparking lots atmass transit terminals/stops, large industrial facilities or similar employers, residences, and shopping malls. Locations for charging stations could be targeted for areas where vehicles could be left for several hours to fully charge the electric vehicle's battery system orwhich meet the U.S. Department ofEnergy's Workplace Charging Initiative. 4. Emission reductions

- overall emissions reductions would depend upon the number ofvehicles utilizing the facilities and would be based upon the type ofvehicle the Alternative Fuels Vehicle or CNG vehicle replaces in the general geographic area, the emissions characteristics and the annual vehicle miles traveled (VMT). For five years post-charging station installation, Consumers would committo effectively offset the electrical usage associated with the vehicle charging station(s) through the use ofrenewable energy credits (RECs), as defined. E. In addition to the otherrequirements ofthis Appendix, the Project Plan required to be submitted pursuantto Section II ofthis Appendix shall include the following: 1. The process and criteriafor selection ofvehicles and locations to participate in a Vehicle Replacement or Retrofit Project orFueling Infrastructure Project; 2. Any third party(ies) that Consumers proposes would have a coordination or management role in the Vehicle Replacement orRetrofit Project orFueling Infrastructure Project(s), but not including vehicle manufacturers ordealers who would provide vehicles; and 3. The basis (including a discussion ofcost) for selecting the make and model ofthe Vehicle Replacement Project or Vehicle Retrofit Project Vehicle chosen for this Project, including information about other available vehicles and why such vehicles were not selected. 

### 5

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4. The cost and anticipated emissions reductions from the Project. 

### IV. Renewable Energy (Wind Energy, SolarPhotovoltaic (PV) orAnaerobic Digestion) DevelopmentorInstallation Projects (Up to$4.0 million) A. Consistentwith the requirements ofthe ConsentDecree, Consumers shall propose a Plan and shall spend up to$4.0 million on Wind Energy, SolarPhotovoltaic (PV), or Anaerobic Digestion with NutrientRecovery/Removal Development or Installation Projects. B. Definitions: I. "Anaerobic digestion" is a biological process in which microorganisms break down organic matter in the absence of oxygen. A biodigester or digester !s an airtight chamber in which anaerobic digestion ofmanure, biosolids, food waste, other organic wastewater streams or a combination of these feedstocks occurs. This process produces commodities such as biogas (a blend of methane and carbon dioxide), animal bedding, and fertilizer. 2. "DevelopmentProjects" are projects that involve Consumers proposingto execute a long-term powerpurchase agreement ("PPA") with one ormore third-party project developers (the "ProjectDevelopers") with respectto development ofa new oran expansion ofan existing "RenewableEnergy System1" as defined by Michigan Public Act 2952 and located within Michigan. 3. "Installation Projects" are projectsthat involve Consumers contributing monetary funds orequivalent equipmentto Project Developers and/orNon-Profits for installation ofa new orexpansion to an existing Renewable Energy System located in Michigan and owned by Non-Profits orinstalled at local schools, government or municipality-owned (or co-owned) facilities/property, orfacilities/property owned by non-profit groups, orat farm(s). 4. "NutrientRecovery" is the recovery ofstable and useful nutrient-containing products from wastewater and solids, including anaerobically digested manure. 5. "Nutrient Removal" is the reduction, elimination, orrendering insoluble ofnutrient constituents in wastewater and solids, including anaerobically digested manure. 6. "Project Contract Beneficiary" is the party(s) who receives renewable energy system operation and maintenance funding and/or other related services orfinancial benefits

1PA 295 defines a Renewable Energy System as a facility, electricity generation system, or set ofelectricity generation systems that use 1or more renewable energy resources to generate electricity and defines renewable energy resource. 2 Michigan Clean, Renewable, and Energy Efficiency Act of2008, Public Act 295. 6

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 102 of 115 Pg ID 123

from Consumers and who owns the site upon which the renewable energy system is installed. 7. "ProjectEscrow" is the monetary fund oraccountthat is separate from other site owner's project developmentfunding and is set aside to supportthe operation and maintenance activities ofthe system. 8. "Project Service Contract" is the renewable energy system service contractthat provides for operation and maintenance ofthe renewable energy system. Such Project Service Contractwould include annual system checkups and normal component replacements, including installation ofnew system components as needed to ensure the ongoing operation and maintenance and performance ofthe system. 9. "Solar PV" involves Projects that generate electricity using a Solar Photovoltaic (PV) system. I0. "Wind Energy" involves Projects that generate electricity using a wind energy conversion system as defined by Michigan Public Act 295. C. Development or Installation Project Plans I. Consumers shall describe in the Plans submitted to EPA for review and approval, how Consumers shall maintain the emissions avoided or reduced by the Wind Energy, Anaerobic Digestion with Nutrient Recovery/Removal and/or Solar PV Project(s) it implements. 2. The Plan required to be submitted pursuant to this Section ofthis Appendix, shall also satisfy the following criteria:
a Describe how the proposed Projects in the Plan are consistent with the requirements ofthis Section and the Consent Decree, and how the Projects will result in the emission reductions projected to be reduced pursuantto this Section. b. Include a budget and schedule for completing each Wind Energy, Anaerobic Digestion with Nutrient Recovery/Removal and/or Solar PV Project on a phased schedule (if applicable), and the supporting methodologies and calculations for the budget.
c. Describe the methodology and include any calculations that Consumers proposes to use in order to document the emission reductions associated with any proposed Projectto be implemented as part ofthis Section. d. Describe the process and criteria Consumers will use to select the potential Project Beneficiaries, including such factors as base electricity usage, wind or
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solar or anaerobic digester feedstock access availability, and other relevant criteria.
e. Provide the supporting costs and activities associated with the Project Service Contract, including the schedule and monetary installments for deposits to the Project Escrow to support the operation and maintenance activities ofthe system and a demonstration that the Project Escrow includes appropriate restrictions on the Project Contract Beneficiary's use of escrow funds in accordance with the requirements ofthis section. f. Identify any person or entity, other than Consumers, that will be involved in the Project(s) and describe the third-party's role in the Project and the basis for asserting that such entity is able and suited to perform the intended role. Any proposed third-party must be legally authorized to perform the proposed role and to receive Project Dollars. This does not include contractors or installers who would complete the siting analysis and/or installation of the Wind Energy, Anaerobic Digestion with Nutrient Recovery/Removal, or Solar PV systems but does include any proposed affiliate orthird party who would have a coordination orproject management role in the Project. g. Identify the expected nameplate capacity (kilowatts-ac for Wind Energy, kilowatts for Anaerobic Digestion with Nutrient Recovery/Removal, and kilowatts-de for SolarPV) and energy output ofeach system. 3. Upon EPA's approval of the Plan, Consumers shall complete the Wind Energy, Anaerobic Digestion with Nutrient Recovery/Removal and/or Solar PV Project(s) accordingto the approved plan and schedule. D. Development Projects with Consumers (i.e., PPAs) 1. Consistent with the requirements ofthis Appendix, Consumers may propose a Plan to execute a PPA with one or more Project Developers with respect to the development ofa new or an expansion to an existing Wind Energy and/or Solar PV installation or installations in Michigan. 2. Consumers shall execute the PPA as quickly as practicable, but in any event, no later than 2 years after plan approval. Consumers shall only be credited Project Dollars on this Project within the first 5 years ofperformance (as measured from the day that power is first purchased under each PPA). For purposes ofcalculating the Project Dollars, Consumers shall only count the increment between the wholesale price of wind generated or solar generated electricity (including the cost ofthe Renewable Energy Credits ("RECs")3) that is charged under the PPA(s) with respect to any period, minus Consumers' average market clearing cost at the Midcontinent Independent System Operator ("MISO") system level for such period.

3 RECs referto a program in which credits are generated from the creation ofRenewable Energy Systems, which include wind, solar, and biomass/anaerobic digestion developments. RECs are known as Renewable Energy Credits in Michigan and are further defined in PA 295. 8

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3. The PPA will include a term of at least I0 years for which Consumers commits to purchase the power generated and, if generated, acquire associated RECs from the Wind Energy or SolarPV installations. 

### 4. Consumers shall not use and will retire all RECs generated during the first 

### I0 years ofperformance (as measured from the day the power is first purchased under each PPA) (the "Initial 10 Years") in accordance with all applicable rules, and shall identify these RECs as retired in the Michigan Renewable Energy Certification System ("MIRECS") or any other tracking system designated as acceptable by the program recognizing the RECs. Consumers shall not use the RECs generated during the Initial 10 Years of the PPA(s) for compliance with any renewable portfolio standard ("RPS") or for any other REC compliance purpose during the Initial 10 Years. 5. The Project shall be considered completed for purposes ofthe Consent Decree after the Initial 10 Years. Consumers may choose to continue to purchase power or otherwise continue the Project(s) following the Initial 10 Years, butwill no longerbe bound by the terms governing Environmental Mitigation Projects identified in Section IX ofthe Consent Decree and this Appendix, including but not limited to limitations ofthe use ofRECs. RECs generated following the Initial 10 Years may be used for any purpose authorized by Jaw, including but not limited to satisfying regulatory requirements or sales ofRECs to help offset the additional costs ofthe PPA. 6. In addition to the other requirements ofthis Appendix, the Project Plan required to be submitted pursuantto this Section II ofthisAppendix shall include the following:
a. Describe how the proposed Project in the Plan is consistent with the requirements of this Section and the Consent Decree, and how the Project will result in emissions reductions pursuantto this Section. b. Provide that Consumers will enter into a long-term PPA with one or more Project Developers by no laterthan 2 years after the date ofPlan approval.
c. Include an anticipated schedule for issuing Requests for Proposals ("RFPs") for Renewable Energy System development and an overall schedule for implementingthis project. d. Describe the process that Consumers will use to select appropriate Renewable Energy System development(s) to participate in the Project.
e. Identify the Project Developer that Consumers proposes for the PPA, including any proposed third-party who would have a coordination or project management role in the Project, but not including prospective developers who would respond to a RFP. f. In the case of Solar PV, provide that the development will have at least a combined aggregate 250 kW of generating capacity (direct current) and will be 9

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## r------------------------------------------------ -**-~~**

interconnected with the utility grid with appropriate metering and monitoring to track the net power output and identify the expected capacity (kW) and energy output ofthe development(s); g. In the case of Wind Energy, provide that

### ~he development will have at least a combined aggregate I00 kW ofgenerating capacity (alternating current) and will be interconnected with the utility grid with appropriate metering and monitoring to track the net power output and identify the expected capacity (kW) and energy output ofthe development(s); h. Provide that Consumers shall report the actual kW hours generated each year for the initial I0 years in each report required by Paragraph 188 of the Consent Decree.
1. In addition to the information required to be included in each report required by Paragraph 188 ofthe Consent Decree, Consumers shall include in that report the identity of the details of the Wind Energy or Solar PV, including the total generating capacity (kW) ofeach system and development, components installed, total cost, expected energy output, environmental benefits, and the actual kWhours generated for the Initial 10 Years. E. Installation Projects Consistent with the requirements ofthis Appendix, Consumers may propose a plan to install Wind Energy, Anaerobic Digestion with Nutrient Recovery/Removal or Solar PV Projects at federal, state, local, or Tribal government-owned buildings, facilities, property, schools, and/or buildings, facilities and/or property owned by nonprofit organizations or at a farm at any location within the State ofMichigan. 1. Wind Energy
a. For a Wind Energy Project, the development(s) should consist, at a minimum, of: (1) installation of wind turbine(s) at a single location with unrestricted wind access, producing a total installed capacity ofat least 10 kW alternating current; (2) appropriate wind turbine foundation or mounting equipment for the type of roofor Project site location; (3) wiring, conduit, and associated switch gear and metering equipment required for interconnecting the wind turbine(s) to the utility grid; (4) appropriate monitoring equipment and controls to enable stafftracking and monitoring ofthe total and hourly energy output ofthe system (kW hours), hourly ambient wind speed (m/s), and appropriate voltage, power, and current metrics. b. The Wind Energy Project shall be installed on the customer side ofthe meter and ownership ofthe system, and any environmental benefitsthatresult from the installation ofthe Wind Project(s), including associated RECs, shall be conveyed to the owner at the site (the "Project Beneficiary"). 10

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c. Consumers shall ensure that there is a manufacturer parts warranty ("Parts Warranty") in place for the major subcomponents ofthe Wind Energy Project, which, at a minimum, coversthe wind turbine for I0 years. d. Consumers also shall fund one or more service contracts ("Project Service Contract(s)") for the benefit of the Project Beneficiary that provides for operation and maintenance ofthe Wind Energy project for 20 years from the date of installation. The Project Service Contract shall, at a minimum, provide for annual system checkups and for normal component replacements, including installation of new system components as needed to ensure the ongoing maintenance and performance ofthe system for no less than 20 years for Wind Energy.
e. Consumers shall fund the cost of the Project Service Contract by depositing funds in an escrow account ("Project Escrow") that limits the use ofthe Project Escrow funds by the Project Beneficiary to use for purposes ofmaintaining the Wind Energy Project. · f. Services under the Parts Warranty and Project Service Contract may be performed by third-party provider(s) and administered by the Project Beneficiary by way of payment from the Payment Escrow. Other than with respect to its funding of the escrow, Consumers is not responsible for any repair and maintenance costs for the Wind Energy Project. 2. Anaerobic Digestion with Nutrient Recovery/Removal
a. For an Anaerobic Digestion with Nutrient Recovery/Removal Project(s), the Project(s), at a minimum, must consist, of: (1) the installation ofthe anaerobic digester system, which includes the digester, engine-generator set, and all related piping, pumps, and controls at a single location with planned biomass feedstock access, producing a total installed capacity ofat least 150 kW alternating current; (2) the appropriate anaerobic digester system foundation and structural equipment for the project site location; (3) wiring, conduit, and associated switch gear and metering equipment required for interconnecting the anaerobic digester system generator(s) to the utility grid; (4) digestate storage and feedstock storage (if the project accepts off-site feedstocks) that minimizes, to the greatest extent practicable, any loss of feedstock or digestate to the environment; (5) technology for nutrient recovery or nutrient removal; (6) appropriate monitoring equipment and controls to enable staff tracking and monitoring of the total and hourly energy output of the system (kW hours), hourly digester temperature (0C), biogas production and appropriate voltage, power, and current metrics; (7) monitoring system and data collection to track and monitor nutrient recovery or removal effectiveness, including total volume of feedstock digested, total volume of digester outputs treated, nutrient recovery/removal efficiencies, and nutrient content ratio ofgenerated products, and data shall be made available to the EPA; (8) a contingency plan for fate of 11

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nutrients in the event of system failure (i.e., enough crop-land on-site for agronomic application ofdigester outputs); and (9) a plan for the disposition or use ofthe digestate that ensures minimal migration ofnutrients into any waters ofthe State orwaters ofthe United States. b. The Anaerobic Digestion with Nutrient Recovery/Removal Project(s) shall be installed on the customer side ofthe meter and ownership ofthe system, and any environmental benefits that result from the installation of the Anaerobic Digestion with Nutrient Recovery/Removal Project(s), including associated RECs, shall be conveyed to the Project Beneficiary.
c. Consumers shall ensure that there is a Parts Warranty in place for the major subcomponents of the Anaerobic Digestion with Nutrient Recovery/Removal Project(s), which, at a minimum, coversthe digester design for 10 years, digester equipment for 3 years, and engine-generator set for 1year. d. Consumers also shall fund one ormore Project Service Contract(s) for the benefit ofthe Project Beneficiary that provides for operation and maintenance of the Anaerobic Digestion with Nutrient Removal/Recovery Project(s) for 20 years from the date ofoperation. The Project Service Contract(s) shall, at a minimum, provide for annual system checkups and for normal component maintenance and replacements, including installation of new system components as needed to ensure the ongoing maintenance and performance ofthe system for no less than 20 years. Consumers shall fund the escrow in aggregate amount equal to 50% of the anticipated operation and maintenance of the Anaerobic Digestion with Nutrient Recovery/Removal Project(s) for 20 years. Consumers shall ensure that the Project Beneficiary has a binding obligation to fund or otherwise secure the funding for the remaining 50% of the operation and maintenance of the Anaerobic Digestion with Nutrient Recovery/Removal Project(s) from the date ofoperation.
e. Consumers shall fund the cost of the Project Service Contract by depositing funds in Project Escrow that limits the use ofthe Project Escrow funds by the Project Beneficiary to use for purposes ofmaintaining the Anaerobic Digestion with NutrientRemoval/Recovery Project(s). f. Services under the Parts Warranty and Project Service Contract may be performed by third-party provider(s) and administered by the Project Beneficiary by way ofpayment from the Payment Escrow. Other than with respect to its funding of the escrow, Consumers is not responsible for any repair and maintenance costs for the Anaerobic Digestion with Nutrient Removal/Recovery Project(s). g. In addition to the other requirements ofthis Appendix, the Project Plan required to be submitted pursuant to this Section of this Appendix shall also include a
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project feasibility study that analyzes the technical and financial viability ofthe proposed project and identifies any additional sources ofproject funding. 3. SolarPV Project
a. For a Solar PV Project, the development(s) should consist, at a minimum, of: (I) the installation ofconventional flat panel or thin film solar photovoltaics ("PV Projects") at a single location with unrestricted solar access, producing a total installed capacity of at least 10 kW direct current; (2) a grid-tie inverter, appropriately sized for the capacity of solar panels installed at the location; (3) the appropriate solar panel mounting equipment for the type ofroof or project site location; (4) wiring, conduit, and associated switch gear and metering equipment required for interconnecting the solar generator(s) to the utility grid; and (5) appropriate monitoring equipment to enable the school students and/or staffto track and monitor the total and hourly energy output ofthe system (kW hours), environmental benefits delivered (e.g. approximate pounds ofNOx, SOz, and 

### COz avoided), hourly ambient temperature and cell temperature (°C), irradiance (W1M2), and appropriate voltage, power, and currentmetrics. b. The Solar PV Project shall be installed on the customer side ofthe meter and ownership of the system, and any environmental benefits that result from the installation of the Solar PV Project(s), including associated RECs, shall be conveyed to the ProjectBeneficiary.
c. Consumers shall ensure that there is a Parts Warranty in place for the major subcomponents ofthe Solar PV Project(s), which, at a minimum, covers the solar panels (modules) for 25 years and the inverters for I0 years. d. Consumers also shall fund one or more Project Service Contract(s) for the benefit ofthe Project Beneficiary that provides for operation and maintenance of the Solar PV Project(s) for 25 years from date of installation. The Project Service Contract(s), at a minimum, provide for annual system checkups, solar panel (module) cleaning, and for normal component replacements, including installation of new system components as needed to ensure the ongomg maintenance and performance ofthe system for no less than 20 years.
e. Consumers shall fund the cost of the Project Service Contract by depositing funds in Project Escrow that limits the use ofthe Project Escrow funds by the Project Beneficiary to use for purposes ofmaintaining the SolarPV Project(s). f. Services under the Parts Warranty and Project Service Contract may be performed by third-party provider(s) and administered by the Project Beneficiary by way of payment from the Payment Escrow. Other than with respect to its funding of the escrow, Consumers is not responsible for any repair and maintenance costs for the Solar PV Project(s).

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4. In addition to the information required to be included in each reportrequired by Paragraph 188 ofthe Consent Decree, Consumers shall include in thatreportthe identity ofthe buildings/property where the Wind Energy, Anaerobic Digestion with Nutrient Recovery/Removal, or Solar PV system(s) are installed, the total capacity (kilowatts) ofeach system, components installed, total cost, expected energy output, actual kW-hours generated, and environmental benefits realized. 

### V. Wood BurningAppliances Project (No less than $1.0 million and up to $2.0 million) A. Consistentwith the requirements ofSection II ofthis Appendix, Consumers shall propose a plan to spend no less than $1.0 million and up to $2.0 million in Project Dollars to sponsor a wood-burning appliance replacement and/orretrofit project (WBAR Project) that Consumers shall ensure shall be implemented by one ormore state, local or tribal air pollution control agencies, orby one ormore third-party non-profit organizations orentities. B. The WBAR Project shall replace orretrofit inefficient, higher-polluting wood-burning or coal appliances with cleaner-burning, more energy-efficientheating appliances and technologies, such as by: (1) retrofitting older hydronic heaters (a.k.a., outdoorwood boilers) to meet EPA Phase II hydronic heater standards; (2) replacing olderhydronic heaters with EPA Phase II hydronic heaters, or with EPA-certified wood stoves, other cleaner-burning, more energy-efficient hearth appliances (e.g., wood pellet, gas, or propane appliances), orEPA Energy Star qualified heating appliances; (3) replacing non-EPA-certified wood stoves with EPA-certified wood stoves orcleaner-burning, more energy-efficient hearth appliances; and (4) replacing or retrofitting wood-burning fireplaces with EPA Phase II qualified retrofit devices orcleaner-burning natural gas fireplaces. The appliances that are replaced underthe WBAR Project shall be permanently removed from use and appropriately disposed. C. The WBAR Project shall provide incentives for the wood-burning appliance replacements and retrofits through rebates, vouchers, discounts, and for incomequalified residential homeowners, full replacement costs. A wood moisture meter shall be provided to every WBAR Projectparticipantthat receives a new wood-burning appliance or retrofits an existing wood-burning appliance. D. To qualify for the WBAR Project, the wood-burning appliance orfireplace must be in regular use in a primary residence or in a frequently used non-residential building (e.g., churches, greenhouses, schools) during the heating season, and preference shall be given to those appliances that are a primary or a significant source ofheat. E. The WBAR Project shall be implemented within the Lower Peninsula ofthe State of Michigan. In determining the specific areas to implementthis project within the aforementioned geographic areas, Consumers shall give priority to: (I) areas with high amounts ofair pollution (e.g., non-attainment areas); (2) areas located within a geography and topography that make them susceptible to high levels ofparticle

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pollution; (3) areas thathave a significant number ofolder and/orhigher-polluting wood orcoal-burning appliances; and/or (4) areas with dense residential populations. F. No greaterthan 15% ofthe Project Dollars provided to the Implementing Entity shall go towards administrative support and outreach costs associated with implementation ofthe WBAR Project. G. Each WBAR Projectparticipant shall receive information related to properoperation of their new appliance and the benefits ofproperoperation (e.g., lower emissions, better efficiency), including, ifapplicable, the importance ofburningdry seasoned wood. The costs associated with this element ofthe WBAR Project shall not be considered part of the 15% administrative costs, and shall be marginal as compared to the total Project Dollars attributed to the WBAR Project. H. Consumers shall ensure that the Implementing Entity consult with EPA's Residential Wood Smoke Reduction Team and implementthe Wood Burning Appliances Project consistentwith the materials available on EPA'sBurn Wise website at http://www.epa.gov/burnwise. 

### I. Consumers shall complete the WBAR Project not laterthan three years after approval of the ProjectPlan(s), exceptthat Consumers may request an extension oftime to complete the Project ifit appears likely that all ProjectDollars designated underthe Plan will not be spent within such three year period despite Consumers' best efforts to implementthe WBAR Project. 

### J. In addition to the information required to be included in periodic reports submitted pursuantto Paragraph 188 ofthe Consent Decree, Consumers shall include the following information with respect to the WBAR Project for each period covered by the periodic report: (I) a description ofthe proposed outreach to raise awareness within the geographic area ofthe WBAR Project, and (2) the number and type ofappliances made available through the WBAR Project, the cost per unit, and the value ofthe rebate or incentive perunit. K. In addition to the information required to be included in the Projectcompletion report submitted pursuantto Paragraph 178 ofthe Consent Decree, Consumers shall include the following information with respect to the WBAR Project: (I)the numberand type of appliances made available through the WBAR Project, (2) the costperunit, and (3) the value ofthe rebate or incentive per unit. L. Consumers shall describe how the proposed Project in the plan required to be submitted pursuantto Section II ofthis Appendix is consistentwith the requirements ofthis Section and ofthe Consent Decree. In thatplan, Consumers shall also include the following information: (I) identification ofthe proposed Implementing Entity, (2) identification ofany otherentities with which the Implementing Entity proposesto partner to implementthe WBAR Project (e.g., the Hearth, Patio, and Barbecue Association ofAmerica, the Chimney Safety Institute ofAmerica, the American Lung 15

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Association, weatherization offices, individual stove retailers, entitiesthatwill dispose ofthe old appliances), (3) a description ofthe schedule and the budgetary increments in which Consumers shall providethe ProjectDollars to implementthe WBARProject, (4) an estimate ofthe number and type ofappliances Consumers intends to subsidize or make available through the WBAR Project, the costperunit, and the value ofthe rebate or incentive perunit, (5) the criteriathe Implementing Entity will use to determine which income-qualified owners shall be eligible for full costreplacement, and (6) a description ofproposed outreach to raise awareness within the geographic area ofthe WBAR Project. M. Performance: Upon approval ofthe WBARProject Plan by EPA, Consumers shall complete the Project according to the approved plan and schedule. 

### VI. Energy Efficiency Projects (Up to $500,000) A. Consistent with the requirements of Section II of this Appendix, Consumers shall propose a plan to spend up to $500,000 in Project Dollars on Energy Efficiency Projects for low income residents and/or public schools to reduce or avoid emissions ofcriteria pollutants. B. Consumers shall submit a Plan to EPA for review and approval consistent with Section II of this Appendix. Consumers shall describe in the Plan submitted to EPA how Consumers shall achieve and maintain the emission reductions associated with the Energy Efficiency Projects. C. The Plan required to be submitted pursuant to this Section ofthis Appendix shall also satisfy the following criteria: 1. Describe how the proposed Projects in the Plan are consistent with the requirements of this Section and the Consent Decree, and how the Projects will result in the emission reductions projected to be reduced pursuantto this Section. 2. Include a budget and schedule for completing the Energy Efficiency Projects and the supporting methodologies and calculations for the budget. 3. Describe the methodology and include any calculations that Consumers proposes to use in order to document the emission reductions associated with any proposed Projectto be implemented as part ofthis Section. D. Upon EPA's approval ofthe Plan, Consumers shall complete the Projects according to the Plan and schedule. E. For purposes ofthis Section, Energy Efficiency Projects include but are not limited to: "Extreme Energy Makeovers" for communities of homes or public schools located in Michigan. This Project would retrofit a community of low-income housing residences or public schools, with the most cost-effective energy-reduction packages on actual
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homes or school buildings and monitor the results, with a goal to achieve 25% energy use reduction. 

### VII. Land Acquisition, Donation and Ecological Restoration Project (Up to$2.0 million) A. Consistent with the requirements ofSection II ofthis Appendix, Consumers must submit a Plan to EPA for review and approval for the use ofup to 

### $ 2.0 million in Project Dollars for acquisition, donation, and/orrestoration ofecologically significant lands, watersheds, vegetation, and/or forests that are part of, adjacentto, or nearthe Consumers service territories (Land Acquisition and Restoration Project). The ProjectDollars for this Project are in addition to the funding described in Section I ofthis Appendix (National Park Service Ecological Restoration). The goal ofthis Project is the protection through acquisition, donation, and/orrestoration ofecologically significant land, watersheds, vegetation, and forests using adaptive managementtechniques designed to improve ecosystem health and mitigate harmful effects from air pollution. 

### B. Definitions. 1. "Land Acquisition" means purchase ofinterests in land, including fee ownership, easements, orotherrestrictions that run with the land thatprovide for the perpetual protection ofthe acquired land. 2. "Land Donation" means transfer ofownership ofConsumers land in fee ordirect payment offunds to a non-profit organization or governmental agency to acquire and provide for perpetual protection ofthe land. 3. "Restoration" may include (but is not limited to) reforestation orrevegetation (using plants native to the area) and/orremoval ofnon-native invasive plant species, as well as land restoration work for supporting such vegetative restorations. C. Land Acquisition, Donation, and Restoration Project(s) shall apply to land that is ecologically and/or environmentally significant. Prioritization shall be considered in Bay, Monroe, Muskegon, or Ottawa Counties in the state ofMichigan, but may be considered for any ecologically and/or environmentally significant property in the State D. Land Acquisition, Donation, and Restoration Project(s) must also incorporate sufficient provisions to ensure the perpetual protection ofthe acquired, donated and/or restored land, unless the land is already under the ownership ofa governmental entity ornonprofitthathas a legal duty to conservethe land in perpetuity. Any proposal for acquisition ordonation ofland must identify fully all owners ofthe interests in the land. Every proposal for acquisition ortransfer ofland must identify the ultimate holder ofthe interests and provide a basis for concludingthatthe proposed holder oftitle is appropriate for long-term protection ofthe ecological and/or environmental benefits soughtto be achieved through the acquisition ordonation.


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E. Consumers shall submit a Plan to acquire, donate, and/orrestore ecologically significant land that includes: 1. A general description ofthe area proposed to be acquired, donated, and/or restored, including a map clearly identifying the location ofthe land relative to the Units addressed in the Consent Decree. The map should also clearly identify all city, state or federal publicly protected lands/parks in the area surrounding the proposed land to be acquired, donated, or restored. 2. Ajustification ofwhy the area should be considered ecologically and/or environmentally significant and warrants preservation and/or restoration. 3. A description ofthe projected cost ofthe land acquisition, donation, and/or restoration. 4. Identification ofany person orentity, otherthan Consumers, that will be involved in the Land Acquisition, Donation, orRestoration project. Consumers' plan shall describe the third-party's role in the action and the basis for asserting that such entity is able and suited to perform the intended role, including any proposed third party who would have a coordination orprojectmanagement role. 5. A schedule for completing and funding each portion ofthe Land Acquisition, Donation, or Restoration Project. F. Upon EPA's approval ofthe ProjectPlan, Consumers may transfer up to $2,000,000 of Project Dollars to one ormore land acquisition funds ornon-profit organization(s), for partial or full implementation ofthe land acquisitions and/orrestoration described in the Project Plan. G. Performance: All Project Dollars shall be expended in accordance with subsections A through F above. H. Project Completion Report: In addition to the information required by Section II ofthis Appendix, Consumers' projectcompletion report for this Project shall include any reports related to this Projectthat any applicable third party fund ororganization provide to Consumers.

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APPENDIXB Determination ofUnit Specific NOx orSOz 

### Mass Emissions for Those Units Where40 CFR Part75 NOx orSOz 

### Mass Emissions AreMeasured ata Common Stack ForJH Campbell Units 1and 2 and JC Weadock Units 7 and 8, as ofthe Date ofEntry, NOx mass emission rates are monitored atthe associated common stacks via the use ofNOx concentration and flow CEMS. In addition, each ofthe preceding individual units are equipped with duct-level NOx and diluent (i.e., C02) concentration CEMS to permitthe determination of unit specific NOx lb/mmBtu emission rates. The following procedures shall be used to calculate unit level NOx mass emission rates for purposes ofconducting rolling average NOx lb/mmBtu calculations. IfCampbell Units 1and 2 electto install unit level S02 CEMS only in lieu of installing both unit level S02 CEMS and Flow CEMS, the same procedure shall be followed for calculating unit level S02 mass emissions exceptthat the value ofK in Paragraph c. shall equal 1.660xI

## o-7(lb/scf)/ppm.
a. From 40 C.F.R. Part 75, Appendix F, equation F-15 (already calculated and reported under Part 75), common stack heat input shall be calculated as follows:



### Where, HI 

### Qw Fe Common stackhourly heat input rate during unitoperation, mmBtulhr Hourly average volumetric flow rate during unitoperation, wet basis, scfh Carbon-basedF-factor, listedin 40 

### CFR 75, AppendixA, Section 3.3.5 for eachfuel, scf/mmBtu %C02w Hourly concentration of C02 during unitoperation,percent C02 b. From 40 C.F.R. Part 75, Appendix F, Equation F-21a (already calculated and reported under Part 75), individual unit heat input shall be calculated as follows:



### Where, HI; Heat input ratefor a unit, mmBtu/hr Hies Heat input rate atthe common stack, mmBtulhr MW; Gross electrical output, MWe tc Unit operating time, houror fraction of an hour tcs Common stackorcommonpipe operatingtime, houror fraction of an hour n Total numberof units usingthe common stack Designation of aparticular unit

### 2:14-cv-13580-SJM-RSW Doc # 2-1 Filed 09/16/14 Pg 115 of 115 Pg ID 136

c. From 40 C.F.R. Part 75, Appendix F, Equation F-6 (already calculated and reported under Part 75), individual unit

### NOx lb/mmBtu emission rates shall be calculated as follows:

Where, 100 

### E

## =K X Ch X 

### Fe X %C02 Pollutantemission rate during unitoperation, lblmmBtu 1.194xlfJ7 for

### NOx (lb/scj)lppm Hourly average

### NOx concentration during unitoperation, ppm Carbon-basedF-factor, listed in 40 CFR 75, AppendixA, Section 3.3.5 for each fuel, scf/mmBtu Hourly concentration of C02during unit operation,percent C02 d. To calculate unit level 

### NOx mass emissions in each operating hour (not calculated orreported under Part 75), the following calculation shall be performed: Where, 

### E(NOx)h 

### E Hh

Where, 

### M(NOx)h E(NOx)h th E(NOx)h = E X Hli


### NOx massemission ratefor hour "h ", in lbs/hr Pollutantemission rate during unitoperation, lblmmBtu Heat inputrate for a unit, mmBtulhr



### NOx mass emissions for hour "h ", lbs 

### NOx mass emission ratefor hour "h ", in lbslhr Unit operatingtimefor hour "h ", in hours or fraction of an hour
e. The preceding unit specific 

### NOx mass emissions data shall then be used in accordance with Paragraphs 5, 6, and 7to calculate 30-day rolling, 90-day rolling and 365-day rolling

### NOx lb/mmBtu emission rates, respectively (as applicable).