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UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

UNITED STATES OF AMERICA, )

 )

Plaintiff, ) CIVIL ACTION NO.

 ) 

v. ) CV 08-1479-PHX-JAT

 )

SALT RIVER PROJECT AGRICULTURAL ) CONSENT DECREE

IMPROVEMENT AND POWER DISTRICT )

 )

Defendant. ) )

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TABLE OF CONTENTS

I. JURISDICTION AND VENUE ..................5

II. APPLICABILITY ......................6

III. DEFINITIONS.......................7

IV. NOx EMISSION REDUCTIONS AND CONTROLS . . . . . . . . . . 13

V. SO2 EMISSION REDUCTIONS AND CONTROLS . . . . . . . . . . 15

VI. PM EMISSION REDUCTIONS AND CONTROLS . . . . . . . . . . 21

VII. PROHIBITION ON NETTING CREDITS OR OFFSETS . . . . . . 26

VIII. ENVIRONMENTAL PROJECTS . . . . . . . . . . . . . . . . 27

IX. CIVIL PENALTY . . . . . . . . . . . . . . . . . . . . . 29

X. RESOLUTION OF PAST CIVIL CLAIMS . . . . . . . . . . . . . 30

XI. PERIODIC REPORTING . . . . . . . . . . . . . . . . . . . 30

XII. REVIEW AND APPROVAL OF SUBMITTALS . . . . . . . . . . . 33

XIII. STIPULATED PENALTIES . . . . . . . . . . . . . . . . . 33

XIV. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . 44

XV. DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . 47

XVI. PERMITS . . . . . . . . . . . . . . . . . . . . . . . . 49

XVII. INFORMATION COLLECTION AND RETENTION . . . . . . . . . 52

XVIII. NOTICES . . . . . . . . . . . . . . . . . . . . . . . 53

XIX. SALES OR TRANSFERS OF OWNERSHIP INTERESTS . . . . . . . 55

XX. EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . 56

XXI. RETENTION OF JURISDICTION . . . . . . . . . . . . . . . 56

XXII. MODIFICATION . . . . . . . . . . . . . . . . . . . . . 57

XXIII. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . 57

XXIV. SIGNATORIES AND SERVICE . . . . . . . . . . . . . . . 59

XXV. PUBLIC COMMENT . . . . . . . . . . . . . . . . . . . . . 60

XXVI. CONDITIONAL TERMINATION OF ENFORCEMENT UNDER CONSENT

DECREE . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

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XXVII. FINAL JUDGMENT . . . . . . . . . . . . . . . . . . . 61

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WHEREAS, Plaintiff, the United States of America (“the

United States”), on behalf of the United States Environmental

Protection Agency (“EPA”) is concurrently filing a complaint for

injunctive relief and civil penalties pursuant to Sections

113(b)(2) and 167 of the Clean Air Act (the “Act”), 42 U.S.C.

§§ 7413(b)(2) and 7477, alleging that Defendant, Salt River

Project Agricultural Improvement and Power District (“SRP”) has

undertaken construction projects at a major emitting facility in

violation of the Prevention of Significant Deterioration (“PSD”)

provisions of Part C of Subchapter I of the Act, 42 U.S.C.

§§ 7470-7492, and in violation of the federally approved and

enforceable Arizona State Implementation Plan (“SIP”); 

WHEREAS, in its complaint, the United States alleges, inter

alia, that SRP failed to obtain the necessary permits and install

the controls necessary under the Act to reduce sulfur dioxide

(“SO2”), oxides of nitrogen (“NOx”), and particulate matter

(“PM”), and that SRP failed to obtain an operating permit under

Title V of the Act that reflects applicable requirements imposed

under Part C of Subchapter I of the Act for its Coronado

Generating Station (“CGS”) located near St. Johns, Arizona;

WHEREAS, the complaint alleges claims upon which relief can

be granted against SRP under Sections 113 and 167 of the Act, 42

U.S.C. §§ 7413 and 7477; 

WHEREAS, the United States provided SRP and the State of

Arizona actual notice of alleged violations in accordance with

Section 113(a)(1) and (b) of the Act, 42 U.S.C. § 7413(a)(1) and

(b);

WHEREAS, the United States and SRP (collectively, the

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“Parties”) have agreed that settlement of this action is in the

best interest of the Parties and in the public interest, and that

entry of this Consent Decree without further litigation is the

most appropriate means of resolving this matter;

WHEREAS, the Parties recognize, and the Court by entering

this Consent Decree finds, that this Consent Decree has been

negotiated in good faith and at arm’s length and that this

Consent Decree is fair, reasonable, consistent with the goals of

the Act, and in the public interest;

WHEREAS, SRP has cooperated in the resolution of this

matter;

WHEREAS, SRP denies the violations alleged in the complaint,

and nothing herein shall constitute an admission of liability;

WHEREAS, SRP maintains that its agreement in this Consent

Decree to install, correlate, maintain, and operate PM CEMS shall

not prevent SRP in any future proceedings from challenging the

relationship between the data generated from such PM CEMS,

including the averaging period for which such data is reported

pursuant to Paragraph 71, and the results of performance tests

for PM (e.g., Method 5, 5B, 5I, or 17); and 

WHEREAS, the Parties have consented to entry of this Consent

Decree without trial of any issues;

NOW, THEREFORE, without any admission of fact or law, it is

hereby ORDERED, ADJUDGED, AND DECREED as follows: 

I. JURISDICTION AND VENUE

1. This Court has jurisdiction over this action, the

subject matter herein, and the Parties consenting hereto,

pursuant to 28 U.S.C. §§ 1331, 1345, 1355, and 1367, and pursuant

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to Sections 113 and 167 of the Act, 42 U.S.C. §§ 7413 and 7477. 

Venue is proper under Section 113(b) of the Act, 42 U.S.C.

§ 7413(b), and under 28 U.S.C. § 1391(b) and (c). Solely for the

purposes of this Consent Decree and the underlying complaint, and

for no other purpose, SRP waives all objections and defenses that

it may have to the Court’s jurisdiction over this action, to the

Court’s jurisdiction over SRP, and to venue in this district. 

SRP consents to and shall not challenge entry of this Consent

Decree or this Court’s jurisdiction to enter and enforce this

Consent Decree. Except as expressly provided for herein, this

Consent Decree shall not create any rights in or obligations of 

any party other than the Parties to this Consent Decree. Except

as provided in Section XXV (Public Comment) of this Consent

Decree, the Parties consent to entry of this Consent Decree

without further notice.

II. APPLICABILITY

2. Upon entry, the provisions of this Consent Decree shall

apply to and be binding upon the Parties, their successors and

assigns, and upon SRP’s directors, officers, employees, servants

and agents solely in their capacities as such.

3. SRP shall provide a copy of this Consent Decree to all

vendors, suppliers, consultants, contractors, agents, and any

other company or other organization retained to perform any of

the work required by this Consent Decree. Notwithstanding any

retention of contractors, subcontractors, or agents to perform

any work required under this Consent Decree, SRP shall be

responsible for ensuring that all work is performed in accordance

with the requirements of this Consent Decree. In any action to

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enforce this Consent Decree, SRP shall not assert as a defense

the failure of its officers, directors, employees, servants,

agents, or contractors to take actions necessary to comply with

this Consent Decree, unless it is determined to be a Force

Majeure Event as governed by Section XIV of this Consent Decree.

III. DEFINITIONS

4. Every term expressly defined by this Section shall have

the meaning given that term herein. Every other term used in

this Consent Decree that is also a term used under the Act or in

a federal regulation implementing the Act shall mean in this

Consent Decree what such term means under the Act or those

regulations.

5. A “30-Day Rolling Average NOx Emission Rate” for a Unit

shall be expressed in lb/mmBtu and calculated in accordance with

the following procedure: first, sum the total pounds of NOx

emitted from the Unit during the current Unit Operating Day and

the previous twenty-nine (29) Unit Operating Days; second, sum

the total heat input to the Unit in mmBtu during the current Unit

Operating Day and the previous twenty-nine (29) Unit Operating

Days; and third, divide the total number of pounds of NOx emitted

during the thirty (30) Unit Operating Days by the total heat

input during the thirty (30) Unit Operating Days. A new 30-Day

Rolling Average NOx Emission Rate shall be calculated for each

new Unit Operating Day. Each 30-Day Rolling Average NOx Emission

Rate shall include all emissions that occur during all periods

within any Unit Operating Day, including emissions from startup,

shutdown, and malfunction. 

6. A “365-Day Plant-Wide Rolling NOx Tonnage Limitation”

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means the limitation, as specified in this Consent Decree, on the

total number of tons of NOx emitted from CGS Units 1 and 2 during

a 365-day period beginning on June 1, 2014, and continuing each

day thereafter, and shall include all emissions during startup,

shutdown, and malfunction, unless the malfunction is determined

to be a Force Majeure Event as defined in Section XIV.

7. A “30-Day Rolling Average SO2 Removal Efficiency” means

the percent reduction in the mass of SO2 achieved by a Unit’s FGD

system over a thirty (30) Unit Operating Day period and shall be

calculated as follows: step one, sum the total pounds of SO2

emitted as measured at the outlet of the FGD system for the Unit

during the current Unit Operating Day and the previous

twenty-nine (29) Unit Operating Days as measured at the outlet of

the FGD system for that Unit; step two, sum the total pounds of

SO2 delivered to the inlet of the FGD system for the Unit during

the current Unit Operating Day and the previous twenty-nine (29)

Unit Operating Days as measured at the inlet to the FGD system

for that Unit (this shall be calculated by measuring the ratio of

the lb/mmBtu SO2 inlet to the lb/mmBtu SO2 outlet and multiplying

the outlet pounds of SO2 by that ratio); step three, subtract the

outlet SO2 emissions calculated in step one from the inlet SO2

emissions calculated in step two; step four, divide the remainder

calculated in step three by the inlet SO2 emissions calculated in

step two; and step five, multiply the quotient calculated in step

four by 100 to express as a percentage of removal efficiency. A

new 30-day Rolling Average SO2 Removal Efficiency shall be

calculated for each new Unit Operating Day, and shall include all

emissions that occur during all periods within each Unit

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Operating Day, including emissions from startup, shutdown, and

malfunction. 

8. A “30-Day Rolling Average SO2 Emission Rate” for a Unit

shall be expressed in lb/mmBtu and calculated in accordance with

the following procedure: first, sum the total pounds of SO2

emitted from the Unit during the current Unit Operating Day and

the previous twenty-nine (29) Unit Operating Days; second, sum

the total heat input to the Unit in mmBtu during the current Unit

Operating Day and the previous twenty-nine (29) Unit Operating

Days; and third, divide the total number of pounds of SO2 emitted

during the thirty (30) Unit Operating Days by the total heat

input during the thirty (30) Unit Operating Days. A new 30-Day

Rolling Average SO2 Emission Rate shall be calculated for each

new Unit Operating Day. Each 30-Day Rolling Average SO2 Emission

Rate shall include all emissions that occur during all periods

within any Unit Operating Day, including emissions from startup,

shutdown, and malfunction. 

9. “Affirmative Defense,” as used in this Consent Decree,

means the Affirmative Defense approved by EPA into the Arizona

SIP Rule 18-2-310, “Affirmative Defenses for Excess Emissions Due

to Malfunction, Startup, and Shutdown,” which provides an owner

or operator of a source an Affirmative Defense in a civil or

administrative action, other than a judicial action for

injunctive relief, if the owner or operator of the source has

emissions in excess of an applicable emission limitation due to

malfunction, startup, or shutdown, has complied with the

reporting requirements of Rule 18-2-310.01, and satisfies

additional requirements of Rule 18-2-310.

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10. “Arizona DEQ” means the Arizona Department of

Environmental Quality.

11. “Arizona SIP” means the Arizona State Implementation

Plan, and any amendments thereto, as approved by EPA pursuant to

Section 110 of the Act, 42 U.S.C. § 7410.

12. “CEMS” or “Continuous Emission Monitoring System,”

means, for obligations involving the monitoring of NOx and SO2

emissions under this Consent Decree, the devices defined in 40

C.F.R. § 72.2, the inlet SO2 lb/mmBtu monitors, and the computer

system for recording, calculating, and storing data and equations

required by this Consent Decree.

13. “CGS” means SRP’s Coronado Generating Station

consisting of two Riley turbo-fired boilers (designated as Unit 1

and Unit 2) and related equipment, which is located near St.

Johns, Arizona.

14. “Clean Air Act” or “Act” means the federal Clean Air

Act, 42 U.S.C. §§ 7401-7671q, and its implementing regulations.

15. “Consent Decree” means this Consent Decree and the

Appendix hereto, which is incorporated into the Consent Decree.

16. “Day” means calendar day unless otherwise specified in

this Consent Decree.

17. “Electrostatic Precipitator” or “ESP” means a device

for removing particulate matter from combustion gases by

imparting an electric charge to the particles and then attracting

them to a metal plate or screen of opposite charge before the

combustion gases are exhausted to the atmosphere.

18. “Emission Rate” for a given pollutant means the number

of pounds of that pollutant emitted per million British thermal

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units of heat input (lb/mmBtu), measured in accordance with this

Consent Decree.

19. “EPA” means the United States Environmental Protection

Agency.

20. “Flue Gas Desulfurization System” or “FGD” means a

pollution control device that employs flue gas desulfurization

technology, including an absorber utilizing lime, fly ash, or

limestone slurry, for the reduction of sulfur dioxide emissions.

21. “Fossil Fuel” means any hydrocarbon fuel, including

coal, petroleum coke, petroleum oil, or natural gas.

22. “lb/mmBtu” means one pound of a pollutant per million

British thermal units of heat input.

23. “Low NOx Combustion System” means burners and

associated combustion air control equipment, including overfire

air, for combusting pulverized coal, which control mixing

characteristics of the pulverized coal and oxygen, lower the

combustion rate, lower oxygen concentration and heat temperature

during the initial phase of combustion, and thereby restrain the

formation of NOx created by both the nitrogen content of the

pulverized coal and by heat.

24. “Netting” shall mean the process of determining whether

a particular physical change or change in the method of operation

of a major stationary source results in a net emissions increase,

as that term is defined at 40 C.F.R. § 52.21(b)(3)(i) and at

Section R9-3-101 of the Arizona SIP.

25. “NOx” means oxides of nitrogen, measured in accordance

with the provisions of this Consent Decree.

26. “Ownership Interest” means part or all of SRP’s legal

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or equitable ownership interest in CGS. 

27. “Parties” means the United States of America on behalf

of EPA and SRP. “Party” means one of the named “Parties.”

28. “PM” means total filterable particulate matter,

measured in accordance with the provisions of this Consent

Decree.

29. “PM CEMS” or “PM Continuous Emission Monitoring System”

means, for obligations involving the monitoring of PM emissions

under this Consent Decree, the equipment that samples, analyzes,

measures, and provides, by readings taken at frequent intervals,

an electronic and/or paper record of PM emissions.

30. “Prevention of Significant Deterioration” or “PSD”

means the prevention of significant deterioration of air quality

program under Part C of Subchapter I of the Clean Air Act, 42

U.S.C. §§ 7470 - 7492, and 40 C.F.R. § 52.21. It also includes

the prevention of significant deterioration of air quality

program as approved into the Arizona SIP, Arizona Administrative

Code R9-3-101, R9-3-301, R9-3-304, and R9-3-305.

31. “Project Dollars” means SRP’s expenditures and payments

incurred or made in carrying out the Environmental Projects

identified in Section VIII (Environmental Projects) of this

Consent Decree to the extent that such expenditures or payments

both: (a) comply with the requirements set forth in Section VIII

and Appendix A of this Consent Decree, and (b) constitute SRP’s

direct payments for such projects, or SRP’s external costs for

contractors, vendors, and equipment.

32. “Removal Efficiency” for a given pollutant means the

percentage of that pollutant removed by the applicable emission

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control device, measured in accordance with the provisions of

this Consent Decree.

33. “SCR” means a pollution control device for reducing NOx

emissions through the use of selective catalytic reduction

technology.

34. “SO2” means sulfur dioxide, measured in accordance with

the provisions of this Consent Decree.

35. “SO2 Allowance” means “allowance” of SO2 as defined at 

42 U.S.C. § 7651a(3): “an authorization, allocated to an

affected Unit by the Administrator of EPA under Subchapter IV of

the Act, to emit, during or after a specified calendar year, one

ton of sulfur dioxide.”

36. “State” means the State of Arizona.

37. “Super-Compliant SO2 Allowance” means an SO2 Allowance

attributable to reductions beyond the requirements of this

Consent Decree.

38. “Title V Permit” means the permit required of SRP’s CGS

under Subchapter V of the Act, 42 U.S.C. §§ 7661-7661e.

39. “Unit” means CGS Unit 1 or Unit 2.

40. “Unit Operating Day” means, for Unit 1, any calendar

day on which Unit 1 fires fossil fuel, and, for Unit 2, any

calendar day on which Unit 2 fires fossil fuel.

IV. NOx EMISSION REDUCTIONS AND CONTROLS

A. NOx Emission Controls

1. Low-NOx Combustion System Installation and Performance 

 Requirements

41. SRP shall install a Low NOx Combustion System on one

Unit no later than June 1, 2009 and on the other Unit by no later

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than June 1, 2011. Commencing on the earlier of ninety (90) Unit

Operating Days or one hundred eighty (180) calendar days after

the Low NOx Combustion System installation date and continuing

thereafter, each Unit shall achieve and maintain a 30-Day Rolling

Average NOx Emission Rate of no greater than 0.320 lb/mmBtu.

2. SCR Installation and Performance Requirements

42. SRP shall install an SCR on one Unit no later than June

1, 2014. Beginning on June 1, 2014, and continuing thereafter,

SRP shall commence continuous operation of the SCR installed on

that Unit so as to achieve and maintain a 30-Day Rolling Average

NOx Emission Rate of no greater than 0.080 lb/mmBtu.

3. Continuous Operation of NOx Controls

43. SRP shall continuously operate each NOx control covered

under this Consent Decree at all times that the Unit it serves is

in operation, consistent with the technological limitations,

manufacturers’ specifications, and good engineering and

maintenance practices for minimizing emissions to the extent

practicable. 

4. 365-Day Plant-Wide Rolling NOx Tonnage Limitation

44. Beginning on June 1, 2014, and continuing thereafter,

SRP shall not exceed a 365-Day Plant-Wide Rolling NOx Tonnage

Limitation at CGS Units 1 and 2 of 7,300 tons.

5. Monitoring of NOx Emissions

A. 30-Day Rolling Average NOx Emission Rate

45. In determining the 30-Day Rolling Average NOx Emission

Rate, SRP shall use CEMS in accordance with the procedures of 40

C.F.R. Part 75, except that: (1) NOx emissions data need not be

bias adjusted, (2) for any CEMS with a span less than 100 parts

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per million (“ppm”), the calibration drift and out-of-control

criteria in Procedure 1, section 4.3 of Part 60, Appendix F shall

apply in lieu of the low emitter specifications in Part 75,

Appendix B, section 2.1, (3) for any CEMS with a span less than

or equal to 30 ppm the exemption from the Part 75 linearity check

will not apply and either the Part 75 linearity check or the

cylinder gas audit described in Procedure 1, section 5.1.2 of

Part 60, Appendix F shall be performed on a quarterly basis, and

(4) for the Unit controlled by SCR, an annual relative accuracy

test audit shall meet, at a minimum, a relative accuracy of less

than 20% or an accuracy of less than 0.016 lb/mmBtu (expressed as

the difference between the monitor mean and the reference value

mean).

B. 365-Day Plant-Wide Rolling NOx Tonnage Limitation

46. For purposes of calculating the 365-day Plant-Wide

Rolling NOx Tonnage Limitation, SRP shall use CEMS in accordance

with the procedures specified in 40 C.F.R. Part 75.

V. SO2 EMISSION REDUCTIONS AND CONTROLS

A. Best Management Practices for Existing SO2 Controls

47. Beginning thirty (30) days after entry of this Consent

Decree, SRP shall continuously operate and maintain, to the

maximum extent practicable, its existing FGDs on CGS Unit 1 and

Unit 2 in a manner consistent with good engineering and

maintenance practices for minimizing SO2 emissions.

B. SO2 Emission Controls

1. New FGD Installations at First Unit

48. SRP shall install a new FGD on one Unit no later than

January 1, 2012. Beginning on January 1, 2012, and continuing

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thereafter, SRP shall commence continuous operation of the FGD so

as to achieve and maintain a 30-Day Rolling Average SO2 Removal

Efficiency at this Unit of at least 95.0% or a 30-Day Rolling

Average SO2 Emissions Rate of no greater than 0.080 lb/mmBtu.

2. New FGD Installation at Second Unit

49. SRP shall install a new FGD on the Unit not selected

pursuant to Paragraph 48 no later than January 1, 2013. 

Beginning on January 1, 2013, and continuing thereafter, SRP

shall commence continuous operation of the FGD so as to achieve

and maintain a 30-Day Rolling Average SO2 Removal Efficiency at

this second Unit of at least 95.0% or a 30-Day Rolling Average

SO2 Emissions Rate of no greater than 0.080 lb/mmBtu.

3. Continuous Operation of SO2 Controls

50. SRP shall continuously operate each FGD covered under

this Consent Decree at all times that the Unit it serves is in

operation, consistent with the technological limitations,

manufacturers’ specifications, and good engineering and

maintenance practices for the FGDs for minimizing emissions to

the extent practicable.

C. Surrender of SO2 Allowances

51. For purposes of this Subsection, “surrender” means,

with regard to SO2 Allowances, permanently surrendering so that

such SO2 Allowances can never be used to meet any compliance

requirement under the Clean Air Act or the Arizona SIP.

52. Except as provided in Paragraph 59, SRP shall not sell,

trade, or transfer any SO2 Allowances allocated to CGS that would

otherwise be available for sale, trade, or transfer as a result

of the actions taken by SRP to comply with the requirements of

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this Consent Decree.

53. Beginning with calendar year 2012, SRP shall surrender

to EPA, or transfer to a non-profit third party selected by SRP

for purposes of surrender, all SO2 Allowances that have been

allocated to CGS in excess of the amount needed to meet its own

federal and/or State Clean Air Act regulatory requirements at CGS

and Springerville Unit 4, which is located at the Springerville

Generating Station.

54. If SRP commences operation of one or more new coalfired units that it owns in whole or in part, as further

described in this Paragraph, in the Western Electricity

Coordinating Council Region no earlier than five (5) years and no

later than fourteen (14) years from the date this Consent Decree

is entered by this Court, then SRP may also use SO2 Allowances,

as limited by this Paragraph, allocated to CGS to meet the

federal and/or state Clean Air Act regulatory requirements for

certain SO2 emissions from such new coal-fired unit(s). SRP may

only use such SO2 Allowances pursuant to this Paragraph if such

new coal-fired unit(s) is equipped with the Best Available

Control Technology (if the new coal-fired unit(s) will be

emitting any of the pollutants set forth at 40 C.F.R.

§ 52.21(b)(50) and the new coal-fired unit(s) will be located in

an attainment area for those pollutants) and/or the Lowest

Achievable Emission Rate (if the new coal-fired unit(s) will be

emitting any of the pollutants set forth at 40 C.F.R.

§ 51.165(a)(xxxvii) and the new coal-fired unit(s) will be

located in a nonattainment area for those pollutants). SRP may

only use SO2 Allowances for the SO2 emissions associated with a

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total of 400 megawatts (MW) that it owns at such new coal-fired

unit(s), whether at one new coal-fired unit (e.g., SRP owns a

total of at least 400 MW at one new coal-fired unit) or in the

aggregate at multiple new coal-fired units (e.g., SRP owns 100 MW

at four new coal-fired units for an aggregate total of 400 MW). 

To determine the number of SO2 Allowances SRP may use pursuant to

this Paragraph, SRP may use no more than that number of SO2

Allowances that cover the same percentage of total SO2 emissions

from such new coal-fired unit(s) as the percentage of SRP’s

ownership in such new coal-fired unit(s), on a MW basis. Thus,

for example, if SRP owns 400 MW of a new 800 MW coal-fired unit

that otherwise meets the requirements of this Paragraph, SRP may

use excess SO2 Allowances allocated to CGS to cover no more than

fifty (50) percent of the total SO2 emissions from such new coalfired unit. This reduction in the amount of SO2 Allowances

surrendered by or on behalf of SRP would start with the year this

new Unit(s) commences operation.

55. SRP shall make its surrender of SO2 Allowances

annually, within forty-five (45) days of its receipt from EPA of

the Annual Deduction Reports for SO2. Any surrender need not

include the specific SO2 Allowances that were allocated to CGS,

so long as SRP surrenders SO2 Allowances that are from the same

year and that are equal to the number required to be surrendered

under this Subsection.

56. If any SO2 Allowances are transferred directly to a

non-profit third party for surrender to EPA, SRP shall include a

description of such transfer in the next report submitted to EPA

pursuant to Section XI (Periodic Reporting) of this Consent

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Decree. Such report shall: (i) provide the identity of the

non-profit third-party recipient(s) of the SO2 Allowances and a

listing of the serial numbers of the transferred SO2 Allowances;

and (ii) include a certification by the non-profit third-party

recipient(s) stating that the recipient(s) will not sell, trade,

or otherwise exchange any of the SO2 Allowances and will not use

any of the SO2 Allowances to meet any obligation imposed by any

environmental law. No later than the third periodic report due

after the transfer of any SO2 Allowances, SRP shall include a

statement that the non-profit third-party recipient(s)

surrendered the SO2 Allowances for permanent surrender to EPA in

accordance with the provisions of Paragraph 57 within one (1)

year after SRP transferred the SO2 Allowances to them. SRP shall

not have complied with the SO2 Allowance surrender requirements

of this Subsection until all non-profit third-party recipient(s)

shall have actually surrendered the transferred SO2 Allowances to

EPA.

57. For all SO2 Allowances surrendered to EPA, SRP or the

non-profit third-party recipient(s) (as the case may be) shall

first submit an SO2 Allowance transfer request form to EPA’s

Office of Air and Radiation’s Clean Air Markets Division

directing the transfer of such SO2 Allowances to the EPA

Enforcement Surrender Account or to any other EPA account that

EPA may direct in writing. As part of submitting these transfer

requests, SRP or the non-profit third-party recipient(s) shall

irrevocably authorize the transfer of these SO2 Allowances and

identify – by name of account and any applicable serial or other

identification numbers or station names – the source and location

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of the SO2 Allowances being surrendered.

D. Monitoring of SO2 Emissions

58. In determining the 30-Day Rolling Average SO2 Emission

Rate and the 30-Day Rolling Average SO2 Removal Efficiency, SRP

shall use CEMS in accordance with the procedures of 40 C.F.R.

Part 75, except that: (1) SO2 emissions data need not be bias

adjusted; (2) inlet pounds of SO2 will be calculated as described

in Paragraph 7 in lieu of installing an inlet flow monitor, (3)

on any CEMS with a span less than 100 ppm, the calibration drift

and out-of-control criteria in Procedure 1, section 4.3 of Part

60, Appendix F shall apply in lieu of the low emitter

specifications in Part 75, Appendix B, section 2.1, (4) on any

CEMS with a span less than or equal to 30 ppm the exemption from

the Part 75 linearity check will not apply and either the Part 75

linearity check or the cylinder gas audit described in Procedure

1, section 5.1.2 of Part 60, Appendix F shall be performed on a

quarterly basis, and (5) an annual relative accuracy test audit

shall meet, at a minimum, a relative accuracy of less than 20% or

an accuracy of less than 0.016 lb/mmBtu (expressed as the

difference between the monitor mean and the reference value

mean).

E. General SO2 Provisions

59. Provided that SRP is in compliance with all SO2

emission limitations established in this Consent Decree, nothing

in this Consent Decree shall preclude SRP from using, selling, or

transferring Super-Compliant SO2 Allowances that may arise as a

result of achieving and maintaining SO2 emission rates or removal

efficiencies at Unit 1 and Unit 2 below the emission limits

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required in this Consent Decree, so long as SRP timely reports

the generation of such Super-Compliant SO2 Allowances in

accordance with Section XI (Periodic Reporting) of this Consent

Decree.

60. SRP shall not use SO2 Allowances to comply with any

requirement of this Consent Decree, including by claiming

compliance with any emission limitation required by this Consent

Decree by using, tendering, or otherwise applying SO2 Allowances

to offset any excess emissions (i.e., emissions above the limits

specified in Paragraphs 48 and 49).

61. Nothing in this Consent Decree shall prevent SRP from

purchasing or otherwise obtaining SO2 Allowances from another

source for purposes of complying with state or federal Clean Air

Act requirements to the extent otherwise allowed by law.

62. The requirements in Paragraphs 52 through 57 and 59 of

this Consent Decree pertaining to SRP’s surrender of SO2

Allowances are permanent injunctions not subject to any

termination provision of this Consent Decree.

VI. PM EMISSION REDUCTIONS AND CONTROLS

A. Optimization of Existing ESPs

63. Beginning thirty (30) days after entry of this Consent

Decree, and continuing thereafter, SRP shall operate each ESP on

each Unit at CGS at all times when the Unit is in operation to

maximize PM emission reductions, provided that such operation of

the ESP is consistent with the technological limitations,

manufacturers’ specifications and good engineering and

maintenance practices for the ESP. Except as required during

correlation testing under 40 C.F.R. Part 60, Appendix B,

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Performance Specification 11, and Quality Assurance Requirements

under Appendix F, Procedure 2, as required by this Consent

Decree, SRP shall, at a minimum, to the extent reasonably

practicable: (a) fully energize each section of the ESP for each

unit, and repair any failed ESP section at the next planned or

unplanned Unit outage of sufficient length; (b) operate automatic

control systems on each ESP to maximize PM collection efficiency;

(c) maintain power levels delivered to the ESPs, consistent with

manufacturers’ specifications, the operational design of the

Unit, and good engineering practices; (d) inspect for and repair

during the next planned or unplanned Unit outage of sufficient

length any openings in ESP casings, ductwork and expansion joints

to minimize air leakage; and (e) optimize the plate-cleaning and

discharge-electrode-cleaning systems for the ESPs at each Unit by

varying the cycle time, cycle frequency, rapper-vibrator

intensity, and number of strikes per cleaning event.

B. PM Emission Rate and Monitoring Requirements

64. Upon installation and commencement of operation of a

FGD system for a Unit as required by Paragraphs 48 and 49, and

continuing thereafter, that Unit shall achieve and maintain a PM

Emission Rate no greater than 0.030 lb/mmBtu.

65. Within one hundred eighty (180) days after each date

established by this Consent Decree for SRP to achieve and

maintain a PM Emission Rate, and continuing annually thereafter,

SRP shall conduct a stack test for PM. To determine compliance

with the PM Emission Rate established in Paragraph 64, SRP shall

use the reference methods and procedures (filterable portion

only) specified in 40 C.F.R. Part 60, App. A-3, Method 5, Method

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5B, or Method 5I, App. A-6, Method 17, or alternative stack tests

or methods that are requested by SRP and approved by EPA and

Arizona DEQ. Each test shall consist of three separate runs

performed under representative operating conditions not including

periods of startup, shutdown, or malfunction. The sampling time

for each run shall be at least 120 minutes and the volume of each

run shall be 1.70 dry standard cubic meters (60 dry standard

cubic feet). SRP shall calculate the PM Emission Rate from the

stack test results in accordance with 40 C.F.R. § 60.8(f). The

results of each PM stack test shall be submitted to EPA and

Arizona DEQ within forty-five (45) days of completion of each

test.

66. When SRP submits the application for amendment to its

Title V permit pursuant to Paragraph 134, that application shall

include a Compliance Assurance Monitoring (“CAM”) plan, under 40

C.F.R. Part 64, for the PM Emission Rate in Paragraph 64. The PM

CEMS required under Paragraph 67 may be used in that CAM plan.

C. PM CEMS

67. SRP shall install, correlate, maintain, and operate PM

CEMS on Unit 1 and Unit 2 as specified below. The PM CEMS shall

comprise a continuous particle mass monitor measuring particulate

matter concentration, directly or indirectly, on an hourly 

average basis and a diluent monitor used to convert the

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. SRP shall maintain, in an electronic

database, the hourly average emission values of all PM CEMS in

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lb/mmBtu. Except for periods of monitor malfunction, maintenance,

or repair, SRP shall continuously operate the PM CEMS at all

times when the Unit it serves is operating.

68. No later than January 1, 2010, SRP shall submit to EPA

and Arizona DEQ for review and approval pursuant to Section XII

(Review and Approval of Submittals) of this Consent Decree a plan

for the installation and correlation of the PM CEMS for Unit 1

and Unit 2.

69. No later than one hundred twenty (120) days prior to

the deadline to commence operation of the PM CEMS as set forth in

Paragraph 71, SRP shall submit to EPA and Arizona DEQ for review

and approval pursuant to Section XII (Review and Approval of

Submittals) of this Consent Decree a proposed Quality

Assurance/Quality Control (“QA/QC”) protocol that shall be

followed for such PM CEMS.

70. In developing both the plan for installation and

correlation of the PM CEMS and the QA/QC protocol, SRP 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 and Arizona DEQ’s approval of the plan described

in Paragraph 68 and the QA/QC protocol described in Paragraph 69,

SRP shall thereafter operate the PM CEMS in accordance with the

approved plan and QA/QC protocol.

71. Within one hundred eighty (180) calendar days following

commencement of operation of each FGD, SRP shall install,

correlate, maintain, and operate a PM CEMS on the Unit being

controlled by the new FGD, conduct performance specification

tests on that PM CEMS, and demonstrate compliance with the PM

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CEMS installation and correlation plan submitted to and approved

by EPA and Arizona DEQ in accordance with Paragraphs 68 and 69. 

SRP shall report, pursuant to Section XI (Periodic Reporting),

the data recorded by the PM CEMS, expressed in lb/mmBtu on a

rolling average 3-hour, 6-hour, 24-hour, 30-day, and 365-day

basis in electronic format to EPA and Arizona DEQ and identify in

the report any PM concentrations measured by the PM CEMS that are

greater than 125% of the highest PM concentration level used in

the most recent correlation testing performed pursuant to

Performance Specification 11.

72. SRP shall operate the PM CEMS for at least two (2)

years. If, after two (2) years of operation, SRP believes that

it is infeasible to continue operation of the PM CEMS, SRP may

submit a demonstration of infeasibility to EPA. As part of that

demonstration, SRP shall submit an alternative PM monitoring plan

for review and approval by EPA. If EPA disapproves the

alternative monitoring plan, or if EPA rejects SRP’s assertion

that it is infeasible to continue operating the PM CEMS, such

disagreement is subject to dispute resolution as specified in

this Consent Decree. 

73. Operation of a PM CEMS shall be considered “infeasible”

if, by way of example, the PM CEMS: (a) cannot be kept in proper

condition for sufficient periods of time to produce reliable,

adequate, or useful data; or (b) SRP demonstrates that recurring,

chronic, or unusual equipment adjustment or servicing needs in

relation to other types of continuous emission monitors cannot be

resolved through reasonable expenditures of resources; or (c)

chronic and difficult operational issues at Unit 1 or Unit 2

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cannot be resolved through reasonable expenditure of resources;

or (d) the data produced by the CEMS cannot be used to assess PM

emissions from Unit 1 or Unit 2 or performance of that Unit’s

control devices. If EPA determines that SRP has demonstrated

infeasibility pursuant to this Paragraph, SRP shall be entitled

to discontinue operation of and remove the PM CEMS.

D. General PM Provisions

74. Although stack testing shall be used to determine

compliance with the PM Emission Rate established by this Consent

Decree, data from PM CEMS shall be used, at a minimum, to monitor

progress in reducing PM emissions.

75. Nothing in this Consent Decree is intended to, or

shall, alter or waive 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 of data for any

purpose under the Act.

VII. PROHIBITION ON NETTING CREDITS OR OFFSETS

76. Emission reductions at CGS that result from actions to

be taken by SRP after entry of this Consent Decree to comply with

the requirements of this Consent Decree shall not be considered

as a creditable contemporaneous emission decrease for the purpose

of obtaining a netting credit or offset under the Clean Air Act’s

Nonattainment New Source Review and PSD programs. 

77. The limitations on the generation and use of netting

credits and offsets set forth in the previous Paragraph do not

apply to emission reductions achieved at CGS that are greater

than those required under this Consent Decree. For purposes of

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this Paragraph, emission reductions at CGS are greater than those

required under this Consent Decree if they result from CGS’s

compliance with federally-enforceable emission limits that are

more stringent than those limits imposed on CGS Unit 1 and Unit 2

under this Consent Decree and under applicable provisions of the

Clean Air Act or the Arizona SIP. 

78. Nothing in this Consent Decree is intended to preclude

the emission reductions generated under this Consent Decree from

being considered by the State or EPA as creditable

contemporaneous emission decreases for the purpose of attainment

demonstrations submitted pursuant to § 110 of the Act, 42 U.S.C.

§ 7410, or in determining impacts on National Ambient Air Quality

Standards, PSD increment, or air quality related values,

including visibility, in a Class I area.

VIII. ENVIRONMENTAL PROJECTS

79. SRP shall implement the Environmental Projects

(“Projects”) described in Appendix A to this Consent Decree in

compliance with the approved plans and schedules for such

Projects and other terms of this Consent Decree. In implementing

the Projects, SRP shall spend no less than $4,000,000 in Project

Dollars. SRP shall not include its own personnel costs in

overseeing the implementation of the Projects as Project Dollars.

80. SRP shall maintain, and present to EPA upon request,

all documents to substantiate the Project Dollars expended to

implement the Projects described in Appendix A, and shall provide

these documents to EPA within thirty (30) days of a request for

the documents.

81. All plans and reports prepared by SRP pursuant to the

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requirements of this Section of the Consent Decree and required

to be submitted to EPA shall be publicly available from SRP

without charge.

82. SRP shall certify, as part of each plan submitted to

EPA for any Project, that SRP is not otherwise required by law to

perform the Project described in the plan, that SRP is unaware of

any other person who is required by law to perform the Project,

and that SRP will not use any Project, or portion thereof, to

satisfy any obligations that it may have under other applicable

requirements of law, including any applicable renewable or energy

efficiency portfolio standards.

83. SRP shall use good faith efforts to secure as much

benefit as possible for the Project Dollars expended, consistent

with the applicable requirements and limits of this Consent

Decree.

84. If SRP elects (where such an election is allowed) to

undertake a Project by contributing funds to another person or

entity that will carry out the Project in lieu of SRP, but not

including SRP’s 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 conduct the Project for which SRP contributes the

funds. Regardless of whether SRP elects (where such election is

allowed) to undertake a Project by itself or to do so by

contributing funds to another person or instrumentality that will

carry out the Project, SRP acknowledges that it will receive

credit for the expenditure of such funds as Project Dollars only

if SRP demonstrates that the funds have been actually spent by

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either SRP or by the person or instrumentality receiving them,

and that such expenditures met all requirements of this Consent

Decree.

85. SRP shall comply with the reporting requirements

described in Appendix A.

86. Within sixty (60) calendar days following the

completion of each Project required under this Consent Decree

(including any applicable periods of demonstration or testing),

SRP shall submit to the United States a report that documents the

date that the Project was completed, SRP’s results of

implementing the Project, including the emission reductions or

other environmental benefits achieved, and the Project Dollars

expended by SRP in implementing the Project.

IX. CIVIL PENALTY

87. Within thirty (30) calendar days after entry of this

Consent Decree, SRP shall pay to the United States a civil

penalty in the amount of $950,000. The civil penalty shall be

paid by Electronic Funds Transfer (“EFT”) to the United States

Department of Justice, in accordance with current EFT procedures,

referencing USAO File Number 2008V00564 and DOJ Case Number 90-5-

2-1-09174 and the civil action case name and case number of this

action. The costs of such EFT shall be SRP’s responsibility. 

Payment shall be made in accordance with instructions provided to

SRP by the Financial Litigation Unit of the U.S. Attorney’s

Office for the District of Arizona. Any funds received after

2:00 p.m. EDT shall be credited on the next business day. At the

time of payment, SRP shall provide notice of payment, referencing

the USAO File Number, the DOJ Case Number, and the civil action

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case name and case number, to the Department of Justice and to

EPA in accordance with Section XVIII (Notices) of this Consent

Decree.

88. Failure to timely pay the civil penalty shall subject

SRP to interest accruing from the date payment is due until the

date payment is made at the rate prescribed by 28 U.S.C. § 1961,

and shall render SRP liable for all charges, costs, fees, and

penalties established by law for the benefit of a creditor or of

the United States in securing payment. 

89. Payments made pursuant to this Section are penalties

within the meaning of Section 162(f) of the Internal Revenue

Code, 26 U.S.C. § 162(f), and are not tax-deductible expenditures

for purposes of federal law.

X. RESOLUTION OF PAST CIVIL CLAIMS

90. Entry of this Consent Decree shall resolve all civil

claims of the United States arising under Part C of Subchapter I

of the Clean Air Act, 42 U.S.C. §§ 7470 to 7492, under the

modification provisions of the Clean Air Act's Standards of

Performance for New Stationary Sources program, 42 U.S.C. § 7411

and 40 C.F.R. § 60.14, and under Subchapter V of the Clean Air

Act, §§ 7661 to 7661f, that arose from modifications that

commenced at CGS prior to the date of lodging of this Consent

Decree.

XI. PERIODIC REPORTING

91. After entry of this Consent Decree, SRP shall submit to

the United States a periodic report, within sixty (60) days after

the end of each half of the calendar year (January through June

and July through December). The report shall include the

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following information:

a. all information necessary to determine compliance with

the requirements of the following Paragraphs of this

Consent Decree: Paragraphs 41 through 46 concerning

NOx emissions and monitoring; Paragraphs 47 through 58

concerning SO2 emissions and monitoring, and the

surrender of SO2 Allowances; and Paragraphs 63 through

66 concerning PM emissions and monitoring;

b. all data recorded by the PM CEMS as required by

Paragraph 71, and all periods of monitor malfunction,

maintenance, and/or repair as provided in Paragraph 67;

c. all information relating to Super-Compliant SO2

Allowances that SRP claims to have generated in

accordance with Paragraph 59 through compliance beyond

the requirements of this Consent Decree; 

d. all information relating to the NOx Offset Requirement

pursuant to Paragraphs 98 and 99; and

e. all information indicating that the installation and

commencement of operation for a pollution control

device may be delayed, including the nature and cause

of the delay, and any steps taken by SRP to mitigate

such delay.

92. In any periodic report submitted pursuant to this

Section, SRP may incorporate by reference information previously

submitted under its Title V permitting requirements, provided

that SRP attaches the Title V permit report (or the pertinent

portions of such report) and provides a specific reference to the

provisions of the Title V permit report that are responsive to

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the information required in the periodic report.

93. In addition to the reports required by Paragraph 91, if

SRP violates or deviates from any provision of this Consent

Decree, SRP shall submit to the United States a report on the

violation or deviation within ten (10) business days after SRP

knew or should have known of the event. In the report, SRP shall

explain the cause or causes of the violation or deviation and any

measures taken or to be taken by SRP to cure the reported

violation or deviation or to prevent such violation or deviations

in the future. If at any time, the provisions of this Consent

Decree are included in Title V Permits, consistent with the

requirements for such inclusion in this Consent Decree, then the

deviation reports required under applicable Title V regulations

shall be deemed to satisfy all the requirements of this

Paragraph. 

94. Each SRP report shall be signed by either SRP’s Manager

of Environmental Services or the Plant Manager at CGS, and shall

contain the following certification:

This information was prepared either by me or under my

direction or supervision in accordance with a system

designed to assure that qualified personnel properly

gather and evaluate the information submitted. Based

on my evaluation, or the direction and my inquiry of

the person(s) who manage the system, or the person(s)

directly responsible for gathering the information, I

hereby certify under penalty of law that, to the best

of my knowledge and belief, this information is true,

accurate, and complete. I understand that there are

significant penalties for submitting false, inaccurate,

or incomplete information to the United States.

95. If any SO2 Allowances are surrendered to any non-profit

third party pursuant to Section V, the non-profit third party’s

certification shall be signed by a managing officer of the nonCase 2:08-cv-01479-JAT Document 18 Filed 12/22/08 Page 32 of 62
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profit third party and shall contain the following language: 

I certify under penalty of law that _____________ [name

of non-profit third party] will not sell, trade, or

otherwise exchange any of the allowances and will not

use any of the allowances to meet any obligation

imposed by any environmental law. I understand that

there are significant penalties for making

misrepresentations to or misleading the United States.

XII. REVIEW AND APPROVAL OF SUBMITTALS

96. SRP shall submit each plan, report, or other submission

required by this Consent Decree to EPA whenever such a document

is required to be submitted for review or approval pursuant to

this Consent Decree. EPA may approve the submittal or decline to

approve it and provide written comments explaining the bases for

declining such approval as soon as reasonably practicable. 

Within sixty (60) days of receiving written comments from EPA,

SRP shall either: (a) revise the submittal consistent with the

written comments and provide the revised submittal to EPA; or (b)

submit the matter for dispute resolution, including the period of

informal negotiations, under Section XV (Dispute Resolution) of

this Consent Decree.

97. Upon receipt of EPA’s final approval of the submittal,

or upon completion of the submittal pursuant to dispute

resolution, SRP shall implement the approved submittal in

accordance with the schedule specified therein or another EPAapproved schedule.

XIII. STIPULATED PENALTIES

98. For any failure by SRP to comply with the terms of this

Consent Decree, and subject to the provisions of Sections XIV 

(Force Majeure) and XV (Dispute Resolution), and except as

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provided in Paragraph 99, SRP shall pay, within thirty (30) days

after receipt of written demand to SRP by the United States, the

following stipulated penalties to the United States:

Consent Decree Violation Stipulated Penalty

a. Failure to pay the civil penalty as

specified in Section IX (Civil Penalty)

of this Consent Decree

$10,000 per day

b. Failure to comply with any

applicable 30-Day Rolling Average NOx

Emission Rate, 30-Day Rolling Average

SO2 Emission Rate or 30-Day Rolling

Average SO2 Removal Efficiency

$2,500 per day per

violation where the

violation is less

than 5% in excess of

the lb/mmBtu limits,

or less than 0.25%

below the removal

efficiency

requirement

$5,000 per day per

violation where the

violation is equal to

or greater than 5%

but less than 10% in

excess of the

lb/mmBtu limits, or

equal to or greater

than 0.25% but less

than 0.50% below the

removal efficiency

requirement

$10,000 per day per

violation where the

violation is equal to

or greater than 10%

in excess of the

lb/mmBtu limits, or

greater than 0.50%

below the removal

efficiency

requirement

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c. Failure to comply with the

applicable 365-Day Plant-Wide Rolling

NOx Tonnage Limitation established by

this Consent Decree

$200,000 for the

first 365-Day PlantWide Rolling NOx

Tonnage Limitation

violation, plus

$5,000 for each

subsequent 365-Day

Plant-Wide Rolling

NOx Tonnage

Limitation violation

that includes any day

in a previouslyassessed 365-Day

Plant-Wide Rolling

NOx Tonnage

Limitation violation,

plus offset NOx

emissions in an

amount that is at

least equal to the

number of tons by

which the 365-Day

Plant-Wide Rolling

NOx Tonnage

Limitation was

exceeded, in

accordance with the

requirements of

Paragraph 99, below

d. Failure to install, commence

operation, or continue operation of a

NOx, SO2, or PM control device on either

Unit 1 or Unit 2, as required under this

Consent Decree

$10,000 per day per

violation during the

first 30 days,

$27,500 per day per

violation thereafter

e. Failure to install or operate CEMS

as required in this Consent Decree 

$1,000 per day per

violation

f. Failure to apply for any permit

required by Section XVI (Permits)

$1,000 per day per

violation

g. Failure to timely submit, modify, or

implement, as approved, the reports,

plans, studies, analyses, protocols, or

other submittals required by this

Consent Decree

$750 per day per

violation during the

first 10 days, $1,000

per day per violation

thereafter

h. Failure to surrender SO2 Allowances

as required by Paragraphs 52 through 55,

57

(a) $27,500 per day

plus (b) $1,000 per

SO2 Allowance not

surrendered

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i. Failure to demonstrate the thirdparty surrender of an SO2 Allowance in

accordance with Paragraph 56

$2,500 per day per

violation

j. Failure to undertake and complete

any of the Environmental Projects in

compliance with Section VIII

(Environmental Projects) of this Consent

Decree

$1,000 per day per

violation during the

first 30 days, $5,000

per day per violation

thereafter

k. Any other violation of this Consent

Decree

$1,000 per day per

violation

99. NOx Offset Requirements. 

a. No later than ninety (90) days following written demand

by the United States for stipulated penalties pursuant to

Paragraph 98.c, SRP shall submit a plan pursuant to Section XII

(Review and Approval of Submittals), to obtain actual emission

reductions of NOx from sources other than CGS in Arizona,

Colorado, New Mexico, or Utah to offset excess NOx emissions as

required by Paragraph 98.c. 

b. Such plan shall describe the manner in which SRP will

obtain the required NOx emission reductions, and shall ensure

that the total tons of NOx emissions that exceeded the 365-Day

Plant-Wide Rolling NOx Tonnage Limitation are offset, no later

than three (3) years from the date the plan is approved pursuant

to Section XII (Review and Approval of Submittals), by an amount

of equal or greater actual NOx emission reductions from the

proposed source(s). 

c. SRP shall implement the project(s) in the approved plan

in a manner which ensures that the offsetting NOx emissions are

obtained no later than three (3) years from the date the plan is

approved pursuant to Section XII (Review and Approval of

Submittals). In the next report submitted to EPA pursuant to

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Section XI (Periodic Reporting)following three (3) years from the

date the plan is approved, SRP shall provide documentation to

demonstrate that it fully and timely obtained the offsetting NOx

emission reductions in accordance with the approved plan. 

d. NOx emission reductions required by the Clean Air Act,

its implementing regulations, or a state implementation plan

shall not be approved as emission reductions to offset NOx

emissions pursuant to Paragraph 98.c. EPA will apply Clean Air

Act § 173(c), 40 C.F.R. § 51.165, and Appendix S to Part 51 for

purposes of determining whether to approve the proposed plan.

100. Violations of any limit based on a 30-day rolling

average constitutes thirty (30) days of violation but where such

a violation (for the same pollutant and from the same Unit)

recurs within periods less than thirty (30) days, SRP shall not

be obligated to pay a daily stipulated penalty for any day of the

recurrence for which a stipulated penalty has already been paid.

101. All stipulated penalties shall begin to accrue on the

day after the performance is due or on the day a violation

occurs, whichever is applicable, and shall continue to accrue

until performance is satisfactorily completed or until the

violation ceases, whichever is applicable. Nothing in this

Consent Decree shall prevent the simultaneous accrual of separate

stipulated penalties for separate violations of this Consent

Decree.

102. SRP shall pay all stipulated penalties to the United

States within thirty (30) days of receipt of written demand to

SRP from the United States, and shall continue to make such

payments every thirty (30) days thereafter until the violation(s)

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no longer continues, unless SRP elects within twenty (20) days of

receipt of written demand to SRP from the United States to

dispute the accrual of stipulated penalties in accordance with

the provisions in Section XV (Dispute Resolution) of this Consent

Decree.

103. Stipulated penalties shall continue to accrue as

provided in accordance with Paragraph 101 during any dispute,

with interest on accrued stipulated penalties payable and

calculated at the rate established by the Secretary of the

Treasury, pursuant to 28 U.S.C. § 1961, but need not be paid

until the following: 

a. If the dispute is resolved by agreement, or by a

decision of the United States pursuant to Section XV

(Dispute Resolution) of this Consent Decree that is not

appealed to the Court, accrued stipulated penalties

agreed or determined to be owing, together with accrued

interest, shall be paid within thirty (30) days of the

effective date of the agreement or of the receipt of

the United States’s decision;

b. If the dispute is appealed to the Court and the United

States prevails in whole or in part, SRP shall, within

thirty (30) days of receipt of the Court’s decision or

order, pay all accrued stipulated penalties determined

by the Court to be owing, together with interest

accrued on such penalties determined by the Court to be

owing, except as provided in Subparagraph c, below;

c. If the Court’s decision is appealed by either Party,

SRP shall, within fifteen (15) days of receipt of the

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final appellate court decision, pay all accrued

stipulated penalties determined to be owing, together

with interest accrued on such stipulated penalties

determined to be owing by the appellate court.

Notwithstanding any other provision of this Consent Decree, the

accrued stipulated penalties agreed by the United States and SRP,

or determined by the United States through Dispute Resolution, to

be owing may be less than the stipulated penalty amounts set

forth in Paragraph 98.

104. All stipulated penalties shall be paid in the manner

set forth in Section IX (Civil Penalty) of this Consent Decree.

105. Should SRP 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.

106. The stipulated penalties provided for in this Consent

Decree shall be in addition to any other rights, remedies, or

sanctions available to the United States by reason of SRP’s

failure to comply with any requirement of this Consent Decree or

applicable law, except that for any violation of the Act for

which this Consent Decree provides for payment of a stipulated

penalty, SRP shall be allowed a credit for stipulated penalties

paid against any statutory penalties also imposed for such

violation.

107. If either of the Units exceeds an applicable emission

limitation set forth in this Consent Decree due to malfunction,

SRP has an Affirmative Defense to stipulated penalties under this

Consent Decree, if SRP has complied with the reporting

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requirements of Paragraphs 111 and 112 and has demonstrated all

of the following:

a. The excess emissions resulted from a sudden and

unavoidable breakdown of process equipment or air

pollution control equipment beyond the reasonable

control of SRP;

b. The air pollution control equipment, process equipment,

or processes were at all times maintained and operated

in a manner consistent with good practice for

minimizing emissions;

c. If repairs were required, the repairs were made in an

expeditious fashion when the applicable emission

limitations were being exceeded. Off-shift labor and

overtime were utilized where practicable to ensure that

the repairs were made as expeditiously as possible. If

off-shift labor and overtime were not utilized, SRP

satisfactorily demonstrated that the measures were

impracticable;

d. The amount and duration of the excess

emissions(including any bypass operation) were

minimized to the maximum extent practicable during

periods of such emissions; 

e. All reasonable steps were taken to minimize the impact

of the excess emissions on ambient air quality;

f. The excess emissions were not part of a recurring

pattern indicative of inadequate design, operation, or

maintenance;

g. During the period of excess emissions there were no

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exceedances of the relevant National Ambient Air

Quality Standards that could be attributed to the

emission exceedances at CGS;

h. The excess emissions did not stem from any activity or

event that could have been foreseen and avoided, or

planned, and could not have been avoided by better

operations and maintenance practices;

i. All emissions monitoring systems were kept in operation

if at all practicable; and

j. SRP’s actions in response to the excess emissions were

documented by contemporaneous records.

108. If either of the Units exceeds an applicable emission

limitation set forth in this Consent Decree due to startup or

shutdown, SRP has an Affirmative Defense to stipulated penalties

under this Consent Decree, if SRP has complied with the reporting

requirements of Paragraphs 111 and 112 and has demonstrated all

of the following:

a. The excess emissions could not have been prevented

through careful and prudent planning and design;

b. If the excess emissions were the result of a bypass of

control equipment, the bypass was unavoidable to

prevent loss of life, personal injury, or severe damage

to air pollution control equipment, production

equipment, or other property;

c. The air pollution control equipment, process equipment,

or processes were at all times maintained and operated

in a manner consistent with good practice for

minimizing emissions;

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d. The amount and duration of the excess emissions

(including any bypass operation) were minimized to the

maximum extent practicable during periods of such

emissions;

e. All reasonable steps were taken to minimize the impact

of the excess emissions on ambient air quality;

f. During the period of excess emissions there were no

exceedances of the relevant National Ambient Air

Quality Standards that could be attributed to the

emission exceedances at CGS;

g. All emissions monitoring systems were kept in operation

if at all practicable; and

h. SRP’s actions in response to the excess emissions were

documented by contemporaneous records.

109. If excess emissions occur due to a malfunction during

routine startup and shutdown, then those instances shall be

treated as other malfunctions subject to Paragraph 107.

110. If excess emissions occur due to a malfunction during

scheduled maintenance, then those instances shall be treated as

other malfunctions subject to Paragraph 107.

111. For an Affirmative Defense under Paragraphs 107 or 108,

SRP shall demonstrate, through submission of the data and

information under the reporting provisions of this section, that

all reasonable and practicable measures within SRP’s control were

implemented to prevent the occurrence of the excess emissions.

112. SRP shall provide notice to the United States in

writing of SRP’s intent to assert an Affirmative Defense for

malfunction, startup, or shutdown under Paragraphs 107 or 108 as

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soon as practicable, but in no event later than twenty-one (21)

calendar days following the date of the malfunction, startup or

shutdown. This notice shall be submitted to EPA pursuant to the

provisions of Section XVIII (Notices). The notice shall contain:

a. The identity of each stack or other emission point

where the excess emissions occurred;

b. The magnitude of the excess emissions expressed in the

units of the applicable emission limitation and the

operating data and calculations used in determining the

magnitude of the excess emissions;

c. The time and duration or expected duration of the

excess emissions;

d. The identity of the equipment from which the excess

emissions emanated;

e. The nature and cause of the emissions;

f. The steps taken, if the excess emissions were the

result of a malfunction, to remedy the malfunction and

the steps taken or planned to prevent the recurrence of

the malfunctions;

g. The steps that were or are being taken to limit the

excess emissions; and

h. If the source’s permit contains procedures governing

source operation during periods of startup or

malfunction and the excess emissions resulted from

startup or malfunction, a list of the steps taken to

comply with the permit procedures.

113. A malfunction, startup, or shutdown shall not

constitute a Force Majeure Event unless the malfunction, startup,

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or shutdown also meets the definition of a Force Majeure Event,

as provided in Section XIV (Force Majeure).

XIV. FORCE MAJEURE

114. For purposes of this Consent Decree, a “Force Majeure

Event” shall mean an event that has been or will be caused by

circumstances beyond the control of SRP, its contractors, or any

entity controlled by SRP that delays compliance with any

provision of this Consent Decree or otherwise causes a violation

of any provision of this Consent Decree despite SRP’s best

efforts to fulfill the obligation. “Best efforts to fulfill the

obligation” include using the best efforts to anticipate any

potential Force Majeure Event and to address the effects of any

such event (a) as it is occurring and (b) after it has occurred,

such that the delay or violation is minimized to the greatest

extent possible.

115. Notice of Force Majeure Events. If any event occurs or

has occurred that may delay compliance with or otherwise cause a

violation of any obligation under this Consent Decree, as to

which SRP intends to assert a claim of Force Majeure, SRP shall

notify the United States in writing as soon as practicable, but

in no event later than twenty-one (21) calendar days following

the date SRP first knew, or by the exercise of due diligence

should have known, that the event caused or may cause such delay

or violation. In this notice, SRP shall reference this Paragraph

of this Consent Decree and describe the anticipated length of

time that the delay or violation may persist, the cause or causes

of the delay or violation, all measures taken or to be taken by

SRP to prevent or minimize the delay or violation, the schedule

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by which SRP proposes to implement those measures, and SRP’s

rationale for attributing a delay or violation to a Force Majeure

Event. SRP shall adopt all reasonable measures to avoid or

minimize such delays or violations. SRP shall be deemed to know

of any circumstance which SRP, its contractors, or any entity

controlled by SRP knew or should have known. 

116. Failure to Give Notice. If SRP fails to comply with

the notice requirements of this Section, the United States may

void SRP’s claim for Force Majeure as to the specific event for

which SRP has failed to comply with such notice requirement.

117. United States’s Response. The United States shall

notify SRP in writing regarding SRP’s claim of Force Majeure

within twenty (20) business days of receipt of the notice

provided under Paragraph 115. If the United States agrees that a

delay in performance has been or will be caused by a Force

Majeure Event, the United States and SRP shall stipulate to an

extension of deadline(s) for performance of the affected

compliance requirement(s) by a period equal to the delay actually

caused by the event. In such circumstances, an appropriate

modification shall be made pursuant to Section XXII

(Modification) of this Consent Decree. 

118. Disagreement. If the United States does not accept

SRP’s claim of Force Majeure, or if the United States and SRP

cannot agree on the length of the delay actually caused by the

Force Majeure Event, the matter shall be resolved in accordance

with Section XV (Dispute Resolution) of this Consent Decree. 

119. Burden of Proof. In any dispute regarding Force

Majeure, SRP shall bear the burden of proving that any delay in

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performance or any other violation of any requirement of this

Consent Decree was caused by or will be caused by a Force Majeure

Event. SRP shall also bear the burden of proving that SRP gave

the notice required by this Section and the burden of proving the

anticipated duration and extent of any delay(s) attributable to a

Force Majeure Event. An extension of one compliance date based

on a particular event may, but will not necessarily, result in an

extension of a subsequent compliance date.

120. Events Excluded. Unanticipated or increased costs or

expenses associated with the performance of SRP’s obligations

under this Consent Decree shall not constitute a Force Majeure

Event. 

121. Potential Force Majeure Events. The Parties agree

that, depending upon the circumstances related to an event and

SRP’s response to such circumstances, the kinds of events listed

below are among those that could qualify as Force Majeure Events

within the meaning of this Section: construction, labor, or

equipment delays; malfunction of a Unit or emission control

device; unanticipated coal supply or pollution control reagent

delivery interruptions; acts of God; acts of war or terrorism;

and orders by a government official, government agency, other

regulatory authority, or a regional transmission organization,

acting under and authorized by applicable law, that directs SRP

to supply electricity in response to a system-wide (state-wide or

regional) emergency. Depending upon the circumstances and SRP’s

response to such circumstances, failure of a permitting authority

to issue a necessary permit in a timely fashion may constitute a

Force Majeure Event where the failure of the permitting authority

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to act is beyond the control of SRP and SRP has taken all steps

available to it to 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

permit terms and conditions after expeditiously exhausting any

legal rights to appeal terms and conditions imposed by the

permitting authority.

122. As part of the resolution of any matter submitted to

this Court under Section XV (Dispute Resolution) regarding a

claim of Force Majeure, the United States and SRP by agreement,

or this Court by order, may in appropriate circumstances extend

or modify the schedule for completion of work under this Consent

Decree to account for the delay in the work that occurred as a

result of any delay agreed to by the United States or approved by

the Court. SRP shall be liable for stipulated penalties for its

failure thereafter to complete the work in accordance with the

extended or modified schedule (provided that SRP shall not be

precluded from making a further claim of Force Majeure with

regard to meeting any such extended or modified schedule).

XV. DISPUTE RESOLUTION

123. The dispute resolution procedure provided by this

Section shall be available to resolve all disputes arising under

this Consent Decree, provided that the Party invoking such

procedure has first made a good faith attempt to resolve the

matter with the other Party.

124. The dispute resolution procedure required herein shall

be invoked by one Party giving written notice to the other Party

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advising of a dispute pursuant to this Section. The notice shall

describe the nature of the dispute and shall state the noticing

Party’s position with regard to such dispute. The Party

receiving such a notice shall acknowledge receipt of the notice,

and the Parties in dispute shall expeditiously schedule a meeting

to discuss the dispute informally not later than fourteen (14)

days following receipt of such notice.

125. Disputes submitted to dispute resolution under this

Section shall, in the first instance, be the subject of informal

negotiations between the Parties. Such period of informal

negotiations shall not extend beyond thirty (30) calendar days

from the date of the first meeting between the Parties’

representatives unless they agree in writing to shorten or extend

this period.

126. If the Parties are unable to reach agreement during the

informal negotiation period, the United States shall provide SRP

with a written summary of its position regarding the dispute. 

The written position provided by the United States shall be

considered binding unless, within forty-five (45) calendar days

thereafter, SRP seeks judicial resolution of the dispute by

filing a petition with this Court. If SRP seeks judicial

resolution, the United States’s written summary shall be deemed

its initial filing with this Court regarding the dispute. The

United States may submit a response to the petition within fortyfive (45) calendar days of filing.

127. The time periods set out in this Section may be

shortened or lengthened upon motion to the Court of one of the

Parties to the dispute, explaining the Party’s basis for seeking

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such a scheduling modification. 

128. This Court shall not draw any inferences nor establish

any presumptions adverse to either Party as a result of

invocation of this Section or the Parties’ inability to reach

agreement.

129. As part of the resolution of any dispute under this

Section, in appropriate circumstances the Parties may agree, or

this Court may order, an extension or modification of the

schedule for the completion of the activities required under this

Consent Decree to account for the delay that occurred as a result

of dispute resolution. SRP shall be liable for stipulated

penalties for its failure thereafter to complete the work in

accordance with the extended or modified schedule, provided that

SRP shall not be precluded from asserting that a Force Majeure

Event has caused or may cause a delay in complying with the

extended or modified schedule.

130. The Court shall decide all disputes pursuant to

applicable principles of law for resolving such disputes. In

their filings with the Court under Paragraph 126, the Parties

shall state their respective positions as to the applicable

standard of law for resolving the particular dispute.

XVI. PERMITS

131. Unless expressly stated otherwise in this Consent

Decree, in any instance where otherwise applicable law or this

Consent Decree requires SRP to secure a permit to authorize

construction or operation of any device, including all

preconstruction, construction, and operating permits required

under State law, SRP shall make such application in a timely

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manner. The United States will use its best efforts to

expeditiously fulfill its role in reviewing all permit

applications submitted by SRP in order to meet the requirements

of this Consent Decree.

132. When permits are required, SRP shall complete and

submit applications for such permits to Arizona DEQ to allow

sufficient time for all legally required processing and review of

the permit request, including requests for additional information

by Arizona DEQ. Any failure by SRP to submit a timely permit

application for Unit 1 and/or Unit 2 shall bar any use by SRP of

Section XIV (Force Majeure) of this Consent Decree, where a Force

Majeure claim is based on permitting delays.

133. Notwithstanding the reference to SRP’s Title V permit

for CGS in this Consent Decree, the enforcement of that permit

shall be in accordance with its own terms and the Act. SRP’s

Title V permit for CGS shall not be enforceable under this

Consent Decree, although any term or limit established by or

under this Consent Decree shall be enforceable under this Consent

Decree regardless of whether such term has or will become part of

a Title V permit, subject to the terms of Section XXVI

(Conditional Termination of Enforcement Under Consent Decree) of

this Consent Decree. 

134. Within one hundred eighty (180) days after entry of

this Consent Decree, SRP shall amend any applicable Title V

permit application, or apply for amendments of its Title V

permit, to include a schedule for all unit-specific and plantspecific performance, operational, maintenance, and control

technology requirements established by this Consent Decree

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including, but not limited to, Emission Rates, Removal

Efficiencies, the 365-day Plant-Wide Rolling NOx Tonnage

Limitation, and the requirements pertaining to the surrender of

SO2 Allowances.

135. Within one (1) year from the commencement of operation

of the final pollution control device to be installed on a Unit

under this Consent Decree, SRP shall either apply to permanently

include the requirements and limitations enumerated in this

Consent Decree into a federally enforceable permit or request a

site-specific amendment to the Arizona SIP to include the

requirements and limitations enumerated in this Consent Decree. 

The permit or Arizona SIP amendment shall require compliance with

the following: (a) any applicable Emission Rate or Removal

Efficiency, (b) the 365-day Plant-Wide Rolling NOx Tonnage

Limitation, and (c) the SO2 Allowance surrender requirements set

forth in this Consent Decree. For purposes of this Consent

Decree, the federally enforceable permit must be issued by

Arizona DEQ under its authority to issue permits pursuant to the

Arizona SIP and not solely under Arizona's authority to issue

permits pursuant to its Title V permit program.

136. SRP shall provide the United States with a copy of

each application for a federally enforceable permit or Arizona

SIP amendment, as well as a copy of any permit proposed as a

result of such application, to allow for timely participation in

any public comment opportunity.

137. If SRP sells or transfers to an entity unrelated to

SRP (“Third Party Purchaser”) part or all of its Ownership

Interest covered under this Consent Decree, SRP shall comply with

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the requirements of Paragraphs 145 through 148 of this Consent

Decree with regard to that Ownership Interest prior to any such

sale or transfer unless, following any such sale or transfer, SRP

remains the holder of the permit for such facility.

XVII. INFORMATION COLLECTION AND RETENTION

138. Any authorized representative of the United States,

including its attorneys, contractors, and consultants, upon

presentation of credentials, shall have a right of entry upon the

premises of CGS Unit 1 and Unit 2 at any reasonable time for the

purpose of:

a. monitoring the progress of activities required under

this Consent Decree; 

b. verifying any data or information submitted to the

United States in accordance with the terms of this

Consent Decree; 

c. obtaining samples and, upon request, splits of any

samples taken by SRP or its representatives,

contractors, or consultants; and

d. assessing SRP’s compliance with this Consent Decree. 

139. SRP shall retain, and instruct its contractors and

agents to preserve, all non-identical copies of all records and

documents (including records and documents in electronic form)

now in its or its contractors’ or agents’ possession or control,

and that directly relate to SRP’s performance of its obligations

under this Consent Decree for the following periods: (a) until

December 31, 2020 for records concerning physical or operational

changes undertaken in accordance with Section IV (NOx Emission

Reductions and Controls) and Section V (SO2 Emission Reductions

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and Controls); and (b) until December 31, 2017 for all other

records. This record retention requirement shall apply

regardless of any corporate document retention policy to the

contrary.

140. All information and documents submitted by SRP

pursuant to this Consent Decree shall be subject to any requests

under applicable law providing public disclosure of documents

unless (a) the information and documents are subject to legal

privileges or protection or (b) SRP claims and substantiates in

accordance with 40 C.F.R. Part 2 that the information and

documents contain confidential business information.

141. Nothing in this Consent Decree shall limit the

authority of the EPA to conduct tests and inspections at SRP’s

facilities under Section 114 of the Act, 42 U.S.C. § 7414, or any

other applicable federal laws, regulations, or permits.

XVIII. NOTICES

142. Unless otherwise provided herein, whenever

notifications, submissions, or communications are required by

this Consent Decree, they shall be made in writing and addressed

as follows:

As to the United States of America:

Chief, Environmental Enforcement Section 

Environment and Natural Resources Division 

U.S. Department of Justice 

P.O. Box 7611, Ben Franklin Station 

Washington, DC 20044-7611

DJ# 90-5-2-1-09174

and 

Director, Air Enforcement Division

Office of Enforcement and Compliance Assurance

U.S. Environmental Protection Agency

Ariel Rios Building [2242A]

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1200 Pennsylvania Avenue, N.W. 

Washington, DC 20460 

and

Director, Air Division

U.S. EPA Region 9

75 Hawthorne Street [Air-1] 

San Francisco, CA 94105

As to SRP:

Manager, Environmental Services

Salt River Project 

Environmental, PAB352 

1521 N. Project Dr.

Tempe, AZ 85281 

and

Corporate Counsel

Salt River Project

Legal Services Department, PAB207

1521 N. Project Dr.

Tempe, AZ 85281

143. All notifications, communications, or submissions made

pursuant to this Section shall be sent either by: (a) overnight

mail or overnight delivery service with signature required for

delivery, or (b) certified or registered mail, return receipt

requested. All notifications, communications, and transmissions

(a) sent by overnight, certified, or registered mail shall be

deemed submitted on the date they are postmarked, or (b) sent by

overnight delivery service shall be deemed submitted on the date

they are delivered to the delivery service. 

144. Either Party may change either the notice recipient or

the address for providing notices to it by serving the other

Party with a notice setting forth such new notice recipient or

address.

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XIX. SALES OR TRANSFERS OF OWNERSHIP INTERESTS

145. If SRP proposes to sell or transfer an Ownership

Interest to another entity (a “Third Party Purchaser”), SRP shall

advise the Third Party Purchaser in writing of the existence of

this Consent Decree prior to such sale or transfer, and shall

send a copy of such written notification to the United States

pursuant to Section XVIII (Notices) of this Consent Decree at

least sixty (60) days before such proposed sale or transfer. 

146. No sale or transfer of an Ownership Interest shall

take place before the Third Party Purchaser and the United States

have executed, and the Court has approved, a modification

pursuant to Section XXII (Modification) of this Consent Decree

making the Third Party Purchaser a party to this Consent Decree

and jointly and severally liable with SRP for all the

requirements of this Consent Decree that may be applicable to the

transferred or purchased Ownership Interests.

147. This Consent Decree shall not be construed to impede

the transfer of any Ownership Interests between SRP and any Third

Party Purchaser so long as the requirements of this Consent

Decree are met. This Consent Decree shall not be construed to

prohibit a contractual allocation – as between SRP and any Third

Party Purchaser of Ownership Interests – of the burdens of

compliance with this Consent Decree, provided that both SRP and

such Third Party Purchaser shall remain jointly and severally

liable to the United States for the obligations of this Consent

Decree applicable to the transferred or purchased Ownership

Interests.

148. If the United States agrees, the United States, SRP,

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and the Third Party Purchaser that has become a party to this

Consent Decree pursuant to Paragraph 146, may execute a

modification that relieves SRP of its liability under this

Consent Decree for, and makes the Third Party Purchaser liable

for, all obligations and liabilities applicable to the purchased

or transferred Ownership Interests. Notwithstanding the

foregoing, however, SRP may not assign, and may not be released

from, any obligation under this Consent Decree that is not

specific to the purchased or transferred Ownership Interests,

including the obligations set forth in Sections VIII

(Environmental Projects) and IX (Civil Penalty). SRP may propose

and the United States may agree to restrict the scope of the

joint and several liability of any purchaser or transferee for

any obligations of this Consent Decree that are not specific to

the transferred or purchased Ownership Interests, to the extent

such obligations may be adequately separated in an enforceable

manner. 

XX. EFFECTIVE DATE

149. The effective date of this Consent Decree shall be the

date upon which this Consent Decree is entered by the Court.

XXI. RETENTION OF JURISDICTION

150. The Court shall retain jurisdiction of this case after

entry of this Consent Decree to enforce compliance with the terms

and conditions of this Consent Decree and to take any action

necessary or appropriate for its interpretation, construction,

execution, modification, or adjudication of disputes. During the

term of this Consent Decree, either Party to this Consent Decree

may apply to the Court for any relief necessary to construe or

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effectuate this Consent Decree.

XXII. MODIFICATION

151. The terms of this Consent Decree may be modified only 

by a subsequent written agreement signed by the United States and

SRP. Where the modification constitutes a material change to any

term of this Consent Decree, it shall be effective only upon

approval by the Court.

XXIII. GENERAL PROVISIONS

152. This Consent Decree is not a permit. Compliance with

the terms of this Consent Decree does not guarantee compliance

with all applicable federal, state, or local laws or regulations.

The emission rates and removal efficiencies set forth herein do

not relieve SRP from any obligation to comply with other state

and federal requirements under the Clean Air Act, including SRP’s

obligation to satisfy any State modeling requirements set forth

in the Arizona SIP.

153. This Consent Decree does not apply to any claim(s) of

alleged criminal liability.

154. In any subsequent administrative or judicial action

initiated by the United States for injunctive relief or civil

penalties relating to CGS as covered by this Consent Decree, SRP

shall not assert any defense or claim based upon principles of

waiver, res judicata, collateral estoppel, issue preclusion,

claim preclusion, or claim splitting, or any other defense based

upon the contention that the claims raised by the United States

in the subsequent proceeding were brought, or should have been

brought, in the instant case; provided, however, that nothing in

this Paragraph is intended to affect the validity of Section X

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(Resolution of Past Civil Claims).

155. Except as specifically provided by this Consent

Decree, nothing in this Consent Decree shall relieve SRP of its

obligation to comply with all applicable federal, state, and

local laws and regulations. Subject to the provisions in Section

X (Resolution of Past Civil Claims), nothing contained in this

Consent Decree shall be construed to prevent or limit the rights

of the United States to obtain penalties or injunctive relief

under the Act or other federal, state, or local statutes,

regulations, or permits.

156. Each limit and/or other requirement established by or

under this Consent Decree is a separate, independent requirement.

157. Performance standards, emissions limits, and other

quantitative standards set by or under this Consent Decree must

be met to the number of significant digits in which the standard

or limit is expressed. For example, an Emission Rate of 0.100 is

not met if the actual Emission Rate is 0.101. SRP shall round the

fourth significant digit to the nearest third significant digit,

or the third significant digit to the nearest second significant

digit, depending upon whether the limit is expressed to three or

two significant digits. For example, if an actual Emission Rate

is 0.1004, that shall be reported as 0.100, and shall be in

compliance with an Emission Rate of 0.100, and if an actual

Emission Rate is 0.1005, that shall be reported as 0.101, and

shall not be in compliance with an Emission Rate of 0.100.

Removal Efficiency for SO2 is expressed to 3 significant figures

- 95.0%. The 95.0% Removal Efficiency requirement is met if, for

example, the calculated Removal Efficiency is 94.95%. However,

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95.0% Removal Efficiency requirement is not met if, for example,

the calculated Removal Efficiency is 94.94%. SRP shall report

data to the number of significant digits in which the standard or

limit is expressed.

158. This Consent Decree does not limit, enlarge, or affect

the rights of either Party to this Consent Decree as against any

third parties.

159. This Consent Decree constitutes the final, complete

and exclusive agreement and understanding between the Parties

with respect to the settlement embodied in this Consent Decree,

and supercedes all prior agreements and understandings between

the Parties related to the subject matter herein. No document,

representation, inducement, agreement, understanding, or promise

constitutes any part of this Consent Decree or the settlement it

represents, nor shall they be used in construing the terms of

this Consent Decree.

160. Each Party to this action shall bear its own costs and

attorneys' fees. 

XXIV. SIGNATORIES AND SERVICE

161. Each undersigned representative of the Parties

certifies that he or she is fully authorized to enter into the

terms and conditions of this Consent Decree and to execute and

legally bind to this document the Party he or she represents.

162. This Consent Decree may be signed in counterparts, and

such counterpart signature pages shall be given full force and

effect. 

163. Each Party hereby agrees to accept service of process

by mail with respect to all matters arising under or relating to

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this Consent Decree and to waive the formal service requirements

set forth in Rule 4 of the Federal Rules of Civil Procedure and

any applicable Local Rules of this Court including, but not

limited to, service of a summons.

XXV. PUBLIC COMMENT

164. Both Parties agree and acknowledge that final approval

by the United States and entry of this Consent Decree is subject

to the procedures of 28 C.F.R. § 50.7, which provides for notice

of the lodging of this Consent Decree in the Federal Register, an

opportunity for public comment, and the right of the United

States to withdraw or withhold consent if the comments disclose

facts or considerations which indicate that this Consent Decree

is inappropriate, improper, or inadequate. SRP shall not oppose

entry of this Consent Decree by this Court or challenge any

provision of this Consent Decree unless the United States has

notified SRP, in writing, that the United States no longer

supports entry of this Consent Decree.

XXVI. CONDITIONAL TERMINATION OF ENFORCEMENT UNDER CONSENT DECREE

165. Termination as to completed tasks. As soon as SRP

completes a construction project or any other requirement of this

Consent Decree that is not ongoing or recurring, SRP may, by

motion to this Court, seek termination of the provision or

provisions of this Consent Decree that imposed the requirement.

166. Conditional termination of enforcement through this

Consent Decree. Subject to the provisions of Paragraph 167,

after SRP:

a. has successfully completed construction, and has

maintained operation, of all pollution controls as

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required by this Consent Decree for a period of two

years; and

b. has obtained all the final permits required by Section

XVI (Permits) of this Consent Decree covering both Unit

1 and Unit 2 that include as federally enforceable

permit terms, all of the Unit performance and other

requirements specified in this Consent Decree; 

then SRP may so certify these facts to the United States and this

Court. If the United States does not object in writing with

specific reasons within forty-five (45) days of receipt of SRP’s

certification, then, for any violations of this Consent Decree

that occur after the filing of notice, the United States shall

pursue enforcement of the requirements contained in the Title V

permit through the applicable Title V permit and/or other

enforcement authorities and not through this Consent Decree.

167. Resort to enforcement under this Consent Decree.

Notwithstanding Paragraph 166, if enforcement of a provision in

this Consent Decree cannot be pursued by the United States under

the applicable Title V permit, or if a requirement of this

Consent Decree was intended to be part of a Title V Permit and

did not become or remain part of such permit, then such

requirement may be enforced under the terms of this Consent

Decree at any time. 

XXVII. FINAL JUDGMENT

168. Upon approval and entry of this Consent Decree by the

Court, this Consent Decree shall constitute a final judgment

between the United States and SRP.

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Accordingly,

IT IS HEREBY ORDERED entering this Consent Decree, a fully

executed version of which has been lodged by the parties at Doc.

#2. 

DATED this 19th day of December, 2008.

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