SETTLEMENT AGREEMENT

This Settlement Agreement-is made by and between the following groups of Petitioners:

(1) the States of New York, Californa, Connecticut, Delaware, Maine, New Mexico, Oregon,

Rhode Island, Vermont, and Washington, the Commonwealth of Massachusetts, the District of

Columbia, and the City of New York (collectively "State Petitioners"); and (2) Natual

Resources Defense Council (NRDC), Sierra Club, and Environmental Defense Fund (EDF)

(collectively "Environmental Petitioners"), and Respondent, the u.S. Environmental Protection

Agency ("EP A") (collectively "the Paries").

WHREAS, EP A published a final action entitled "Standards of Performance for Electric

Utilty Steam Generating Units, In(tustrial-Commercial-Institutional Steam Generating Units,

and Small Industral-Commercial-Institutional Steam Generating Units," 71 Fed. Reg. 9,866

(Feb. 27, 2006) (the "Final Rule");

WHEREAS, the Final Rule included amendments to the stadards of performance for

electric utilty steam generating unts subject to 40 C.F.R. par 60, subpar Da ("EGUs");

WHEREAS, in connection with this Final Rule, EP A declined to establish standards of

performance for greenhouse gas ("GRG") emissions;

WHEREAS, State and Environmenta Petitioners filed petitions for judicial review of the

. Final Rule under the Clean Air Act ("CAA") Section 111, 42 U.S.c. § 7411, contending, inter

alia, that the Final Rule was required to include stadards of performance for GRG emissions

from EGU s;

WHEREAS, the portions of State and Environmental Petitioners' petitions for review of

. the Final Rule that related to GRG emissions were severed from other petitions for review of the

Final Rule, and were formerly pending before the United States Cour of Appeals for the District

Page i of 11
of Columbia Circuit (the "Cour") under the caption State of New York, et al. v. EP A, No. 06-

1322;

WHEREAS, following the Supreme Cour's decision in Massachusetts v. EPA, 549 U.S.

497 (2007), EPA requested remand of the Final Rule to EPA for fuher consideration of the

issues related to GRG emissions in light of that decision;

WHEREAS, the Cour remanded the Final Rule to EPA for fuer proceedings on GRG

emissions in light of Massachusetts v. EP A, by its Order of September 24, 2007 (the "Remand

Order");

WHEREAS, as of the date of this Settlement Agreement, EPA has not taen any publicly

noticed action to respond to the Remand Order;

WHEREAS, the State Petitioners submitted letters to EP A dated June 16, 2008 and

August 4,2009 inquiring as to the status ofEPA's action on the remand and stating their position

that EP A had a legal obligation to act promptly to comply with the requirements of Section 111,

and Environmenta Petitioners submitted a letter to EP A on August 20, 2010 seeking

commitments to ruemakng on GRG emissions from EGUs as a means of avoiding fuher

litigation;

WHEREAS, EGUs are, collectively, the largest source category of GRG emissions in the

United States, according to a recent EPA analysis. See 74 Fed. Reg. 56,260, 56,363 (Oct. 30,

2009);

WHEREAS, EPA's initial evaluation of available GRG control strategies indicates that

there are cost-effective control strategies for reducing GRGs from EGUs;

,

WHEREAS, EP A believes it would be appropriate for it to concurently propose

performance standards for GRG emissions from new and modified EGUs under CAA section

Page 2 of 11
111(b), 42 U.S.C. § 7411(b), and emissions guidelines for GHG emissions from existing affected

EGUs pursuant to CAA section 111(d), 42 U.S.C. § 7411(d), and 40 C.F.R. § 60.22;

WHREAS, the Paries wish to enter into this Settlement Agreement to resolve the State

and Environmental Petitioners' request for performance stadards and emission guidelines for

. GHG emissions under CAA sectionslll(b) änd 111(d) and to avoid fuher litigation on this

issue, without any admission or adjudications of fact or law;

NOW THEREFORE, the Paries, intending to be bound by this Settlement Agreement,

hereby stipulate and agree as follows:

1. EPA will sign by July 26,2011, and will transmit to the Offce of the Federal Register

within five business days, a proposed rule under section 111 (b) that includes stadards of

performance for GHGs for new and modified EGUs that are subject to 40 C.F.R. par 60,

subpar Da. EP A shall provide the State and Environmental Petitioners a copy of the

proposed rue with five business days of signatue.

2. EPA will also sign by July 26, 2011, and will transmit to the Offce of the Federal

Register within five business days, a proposed rue under section 111 (d) that includes

emissions guidelines for GHGs from existing EGUs that would have been subject to 40

C.F.R. par 60, subpar Da if they were new sources. EPA shall provide the State and

Environmental Petitioners a copy of the proposed rule within five business days of

signatue.

3. After considering any public comments received concernng the proposed rule described

in Paragraph 1, EP A will sign no later than May 26, 2012,. and will transmit to the Offce

of the Federal Register withn five business days, a final rule that takes final action with

respect to the proposed rue described in Paragraph 1. . EP A shall provide the

Page 3 of 11
Environmental and State Petitioners with a copy of its final action within five business

days of signatue.

4. IfEPA finalizes standards of performance for GHGs pursuant to Paragraph 3, then based

on consideration of the public comments received concernng the proposed rule described

in Paragraph 2, EP A will sign no later than May 26, 2012, and will transmit to the Offce

of the Federal Register within five business days, a final rule that taes final action with

respect to the proposed rue describe in Paragraph 2. EP A shall provide the State and

Environmenta Petitioners with a copy of its final action within five business days of

signatue.

5. EP A agrees that it wil make staff available by telephone at least every 60 days to update

State and Environmental Petitioners on EPA's progress in completing the actions

described in Paragraphs (1) through (4). In addition, EPA will provide State and

Environmental Petitioners with a status letter every 60 days, which shall include an

affirmative statement of whether EP A believes it will timely complete all actions

described in Paragraphs 1 through 4.

6. Upon EPA's fulfillment of each of the obligations stated in Paragraphs 1 through 4

above, this Settlement Agreement shall constitute a full and final release of any claims

that State and Environmental Petitioners may have under any provision of law to compel

EP A to respond to the Cour's Remand Order with respect to GHG emissions from

EGUs.

7. State and Environmenta Petitioners shall not file any motion or petition seeking to

compel EP A action in response to the Remand Order with respect to GHG emissions

from EGUs uness EPA has first failed to meet an obligation stated in Paragraphs 1

Page 4 of 11
through 4 above. If EP A fails to meet such an obligation, or if an EP A status letter

described in Paragraph 5 does not afrm that EP A believes it will timely complete all

actions described in Paragraphs 1 through 4, or if EP A fails to send a status letter as

described in Paragraph 5 and does not promptly cure that failure upon receiving notice,

State and Environmental Petitioners' sole remedy shall be to file an appropriate motion or

petition with the Cour or other civil action seeking to compel EP A to take action

responding to the Remand Order. In that event, all Paries reserve any claims or defenses

they may have in such an action, and the dates stated in Paragraphs 1 through 4 shall be

constred to represent only the paries' attempt to compromise claims in litigation, and

not to represent agreement that any paricular schedule for fuher agency action is

reasonable or otherwse required by law. State and Environmental Petitioners reserve all

rights under the law to file petitions for review of final agency actions under ths

Settlement Agreement, pursuant to section 307(b), 42 U.S.C. § 7607(b).

8. This Settlement Agreement constitutes the sole and entire understanding ofEPA and the

Environmental and State Petitioners and no statement, promise or inducement made by

any Par to this Settlement Agreement, or any agent of such Paries, that is not set forth

in ths Settlement Agreement shall be valid or binding.

9. Except as expressly provided in this Settlement Agreement, none of the Paries waives or

relinquishes any legal rights, claims or defenses it may have. State and Environmental

Petitioners reserve the right to seek attorneys' fees and costs relating to this litigation, and

EP A reserves any defenses it may have relating to such claims.

10. The provisions of this Settlement Agreement can be modified at any time by written

mutual consent of the Paries.

Page 5 of 11
11. Except as expressly provided herein, nothing in the terms of ths Settlement Agreement

shall be constred to limit or modify the discretion accorded EP A by the CAA or by

general principles.of administrative law.

12. The commitments by EP A in this Settlement Agreement are subject to the availability of

appropriated fuds. No provision of this Settlement Agreement shall be interpreted as or

constitute a commitment or requirement that EP A obligate, expend or pay fuds in

contravention of the Anti-Deficiency Act, 31 U.S.C. 1341, or any other applicable

appropriations law or regulation, or otherwise take any action in contravention of those

laws or regulations.

13. Nothing in the terms of ths Settlement Agreement shall be constred to limit EPA's

authority to alter, amend or revise any final rue EPA may issue pursuant to Paragraphs 3

or 4, or to promulgate superseding regulations.

14. The Paries agree and acknowledge that before this Settlement Agreement is final, EP A

must provide notice in the Federal Register and an opportty for public comment

pursuant to CAA Section 113(g), 42 U.S.C. 7413(g). After this Settlement Agreement

has undergone an opportty for notice and comment, the Administrator and/or the

Attorney General, as appropriate, shall promptly consider any such wrtten comments in

determining whether to withdraw or withhold her/hs consent to the Settlement

Agreement, in accordance with section 113(g) of the CAA. Withi 30 days of the close

of the public comment period, EP A shall provide written notice to State and

Environmental Petitioners of any decision to withdraw or withold consent or shall

provide wrtten notice of finality. This Settlement Agreement shall become final on the

Page 6 of 11
date that EP A provides written notice of such finality to the State and Environmental

Petitioners.

15. The undersigned representatives of each Pary certify that they are fully authorized by the

Par that they represent to bind that respective Par to the terms of this Settlement

Agreement. This Settlement Agreement will be deemed to be executed when it has been

signed by the representatives of the Paries set forth below, subject to final approvals

pursuant to Paragraph 14.

. DATE: iz./,,,hD I I JJ~ ~~~~ /~- DA VID GUNTER /

U.S. Deparment of Justice

Environment and Natual Resources Division

Environmental. Defense Section

P.O. Box 23986

Washington, D.C. 20026-3986

Counsel for us. Environmental Protection Agency

DATE:

MICHAL J. MYERS

MORGAN A. COSTELLO

Assistat Attorneys General

Environmental Protection Bureau

.... Offce of the Attorney General, The Capitol

Albany, New York 12224

Counsel for State of New York

DATE:

KENNETH P. ALEX

SUSAN DURBIN

Offce of the Attorney General, State of Californa

1515 Clay Street, 20th Floor, P.O. Box 70550

Oakand, CA 94612

Counsel for State of California

Page 7 of 11
date that EP A provides written notice of such finality to the State and Environmental

Petitioners.

15. The undersigned representatives of each Pary certify that they are fully authorized by the

Party that theyrepresent to bind that respective Party to the terms of this Settlement

Agreement. This Settlement Agreement will be deemed to be executed when it has been

signed by the representatives of the Parties set forth below, subject to final approvals

pursuant to Paragraph 14.

DATE:

DAVID GUNTER

U.S. Department of Justice

Environment and Natural Resources Division

Environmental Defense Section

P.O. Box 23986

Washington, D.C. 20026-3986

Counsel for us. Environmental Protection Agency

DATE:~ J:Q!J MORGAN A. COSTELLO

Assistant Attorneys General

Environmental Protection Bureau

Offce of the Attorney General, The Capitol

Albany, New York 12224

Counsel for State of New York

DATE:

KENNTH P. ALEX

SUSAN DURIN

Offce of the Attorney General, State of California

1515 Clay Street, 20th Floor, P.O. Box 70550

Oakland, CA 94612

Counsel for State of California

Page 7 of11
date that EP A provides wrtten notice of such finality to the State and Environmental

Petitioners.

15. The undersigned representatives of each Par certify that they are fully authorized by the

Par that they represent to bind that respective Par to the terms of ths Settlement

Agreement. This Settlement Agreement wil be deemed to be executed when it has been

signed by the representatives of the Paries set forth below, subject to final approvals

pursuant to Paragraph 14.

DATE:

DAVID GUNTER

U.S. Deparent of Justice

Environment and Natual Resources Division

Environmenta Defense Section

P.O. Box 23986

Washington, D.C. 20026-3986

Counsel for us. Environmental Protection Agency

DATE:

MICHAEL J. MYERS

MORGAN A. COSTELLO

Assistat Attorneys General

Environmental Protection Bureau

Offce of the Attorney Genera, The Capitol

Albany, New York 12224

Counsel for State of New York

DATE: l"llZ I/o ~A~

ETHP. ALEX.

SUSAN DURBIN

Offce of the Attorney Genei:al, State of California

1515 Clay Street, 20th Floor, P.O. Box 70550

Oakand, CA 94612

Counselfor State of California

Page 7 of 11
DATE:

DATE:

DATE:

DATE:

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øø~ KIMBERL Y MASSICOTTE

MATTHEW i. LEVINE

Assistant Attorneys General

Offce of the Attorney General

P.O. Box 120,55 Elm Street

Hartford, ConnecticlIt 06141-0 t 20

Coimselfor State o/Connecticut

VALERIE M. SATTRFIELD

Deputy Attomey General

Depaitment of Justice

i 02 W. Water Street

Dovel', DE 19904

Counsel for State of Delaware

GERALD D. REID

Assistant Attorney General

Department of the Atto1'ey General

State Hoiise Station #6

Augusta, Maine 04333-0006

Counsel for Stelte of Maine

SETH COHEN

STEPHEN R. FARRIS

JUDITH ANN MOORE

Assistant Attorneys General

P.O. Drawer 1508

Santa Fe, New Mexico 87504-1508

Coiinselfor State of New Mexico
DATE:

DATE:~IO

DATE:

DATE:

Page 8 of 11

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KIMBERLY MASSICOTTE

MATTHEW i. LEVINE

Assistant Attorneys General

Offce of the Attorney General

P.O. Box 120,55 Elm Street

Harford, Connecticut 06141-0120

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Counsellor State olConnecticut

V ~ SAITERIELD

Deputy Attorney General

Deparent of Justice

102 W. Water Street

Dover, DE 19904

Counsel lor State 01 Delaware

GERALD D. REID

Assistat Attorney General

Deparent of the Attorney Genera

State House Station #6

Augusta, Maine 04333-0006

Counsel lor State 01 Maine

SETH COHEN

STEPHEN R. FARRS

JUDITH AN MOORE

Assistat Attorneys General

P.O. Drawer 1508

Santa Fe, New Mexico 87504- 1508

Counsel lor State of New Mexico
DATE:

KIMBERLY MASSICOTTE

MATTHEW 1. LEVINE

Assistant Attorneys General

Office of the Attorney General

P.O. Box 120, 55 Elm Street

Harford, Connecticut 06141-0120

Counsel for State of Connecticut

DATE:

VALERIE M. SATTERFIELD

Deputy Attorney General

Deparment of Justice

102 W. Water Street

Dover, DE 19904

Counsel for State of Delaware

Assistant Attorney General

GEm D. REID f~~

Deparment of the Attorney General

State House Station #6

Augusta, Maine 04333-0006

DATE: l'J ( 'Y Ii c

Counsel for State of Maine

DATE:

SETH COHEN

STEPHEN R. FARRIS

JUDITH ANN MOORE

Assistant Attorneys General

P.O. Drawer 1508

Santa Fe, New Mexico 87504-1508

Counselfor State of New Mexico

Page 8 of 11
DATE:

DATE:

DATE:

DATE:

Page 8 of 11

KIMBERLY MASSICOTTE

MATTHEW i. LEVINE

Assistant Attorneys General

Office of the Attorney General

P.O. Box 120, 55 Elm Street

Hartford, Connecticut 06141-0120

Counsel for State of Connecticut

VALERIE M. SATTERFIELD

Deputy Attorney General

Deparment of Justice

102 W. Water Street

Dover, DE 19904

Counsel for State of Delaware

GERALD D. REID

Assistant Attorney General

Deparment of the Attorney General

State House Station #6

Augusta, Maine 04333-0006

12-/ ej ~.:0 i l COHEN

STEPHEN R. FARRIS

JUDITH ANN MOORE

Assistant Attorneys General

P.O. Drawer 1508

Santa Fe, New Mexico 87504-1508

Counsel for State of New Mexico
DATE: 1 z¡iq¡;o-lC/

DATE:

DATE:

DATE:

Page 9 of 11

Assistant Attorney General

~

Deparment of Justice

1162 Cour Street, N.E.

Salem, Oregon 97301

Counselfor State of Oregon

GREGORY S. SCHULTZ

MICHAEL RUBIN .

Special Assistant Attorneys General

Rhode Island Deparent of the Attorney General

150 South Main Street

Providence, Rhode Island 02903

Counsel for State of Rhode Island

THEAJ. SCHWARTZ

Assistant Attorney General

Environmental Division

Offce of the Attorney General

109 State Street

Montpelier, VT 05609-100 i

Counsel for State of Vermont

LESLIE R. SEPFERN

Assistant Attorney General

Offce of the Attorney General

P.O. Box 40117

Olympia, Washington 98504

Counsel for State of Washington
DATE:

PAUL S. LOGAN

Assistant Attorney General

Deparment of Justice

1162 Cour Street, N.E.

Salem, Oregon 97301

Counsel for State of. Oregon

DA TE:-l t~ I '2c"iO G OR . C

MICHAEL R IN

Special Assistant Attorneys General

Rhode Island Deparent ofthe Attorney General

150 South Main Street

Providence, Rhode Island 02903

Counsel for State of Rhode Island

DATE:

THEA J. SCHWARTZ

Assistant Attorney General

Environmental Division

Office of the Attorney General

109 State Street

Montpelier, VT 05609-1001

Counsel for State of Vermont

DATE:

LESLIE R. SEFFERN

Assistant Attorney General

Office of the Attorney General

P.O. Box 40117

Olympia, Washington 98504

Counselfor State of Washington

Page 9 of 12
DATE:

DATE:

PAUL S. LOGAN

Assistant Attorney General

Department of Justice

1162 Court Street, N .E.

Salem, Oregon 9730 I

Counsel/Ór State o/Ore!?on

-_. _. _..-- _. .._--. - - . - .

GREGOR Y S. SCHULlZ

MICHAEL RUBIN

Special Assistant Attorneys General

Rhode Island Department of the Attorney General

150 South Main Street .

Providence. Rhode Island 02903

Counsel/Ór ,,,'tate (~/Rhode Is/and

-1L ~. ~i- - THEAJ. SCH 1\RT ~

Assistant Attorney General

Environmental Division

Of1ce of the Attorney General

109 State Strect

Montpelier. VT 05609-1001

DATE: \ i- / 10 lio , I

DATE:

Page 9 of i i

Counsel/Ór State 0/ Vermont . .

LESLIE R. SEFFERN

Assistant Attorney General

Ofice of the Attorney (Jenera1

P.O. Box 40117

Olympia, Washington 98504

Counselfor State of Washington
DATE:

PAUL S. LOGAN

Assistant Attorney General

Deparment of Justice

1162 Cour Street, N .E.

Salem, Oregon 97301 ."

Counselfor State of Oregon

DATE:

GREGORY S. SCHULTZ

MICHAEL RUBIN

Special Assistant Attorneys General

Rhode Island Deparment of the Attorney General

150 South Main Street

Providence, Rhode Island 02903

Counsel for State of Rhode Island

DATE:

THEA J. SCHWARTZ

Assistant Attorney General

Environmental Division

Office of the Attorney General

109 State Street

Montpelier, VT 05609-1001

Counsel for State of Vermont

DATE: / ;i.- /J' - /tJ

~ ~~/' / ß~~\ - ZLifu R. SEFFERN . --

Assistant Attorney General

Offce of the Attorney General

P.O. Box 40117

Olympia, Washington 98504

Counsel for State of Washington

Page 9 of 11
DATE~~,/¿?,./d ~ 5~_~~ . .. '/ ONNAM.MU Y

Deputy Solicitor General .

Offce of the D.C. Attrney General .

441 Four Stret. N.W.

Wasgton, D.C. 2001)1

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Counsel for District of Columbia

DATE:

WILLIA L. PAREE

Assistt Attorney Genera

Envionmenta Protection Division

One Ashburn Plac

Boston, Massahusetts 02108

Counsel for Commonwealth of Massachusetts

DATE:

CHRSTOPHER G. KIG

New York City Law Deparent

100 Churh Slleet

New York, NY 10007

Counselfor City of New York

\

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DATE:

DATE:'Yu '9,,2010

:QA'r;

Page 10 of 11

DONNA M. MUSKY

Deputy Solicitor General

Office' of the D.C. Attorney General

44.1 Fourh S1reet, N. W.

Washington, D..c.. 2aQQ1

Çtmn~s,1 jQr Pi~triP f)f Çç!lymki(l

GJ,ml~~ (.,'~,~

WILLIA L. ~AREE

CAROL IACU

As.sistant Attorneys General

EnvIromnentai Protection Ðivisíon

Offce of the Attorney Generål .

Une Ashburon Place

Baston, Massachusett Q21Q8

Caunïfe.l far Cammanwei¡lth of Mas.s.aahufJtHts.

CHRSTOPHER G. KIG

CARll NOTEBOOM

New York City Law Deparent

100 Church Street

l'ew York, NY 10007

, Counsel for City of New. York
DATE:

DONNA M. MURASKY

Deputy Solicitor General

Office of the D.C. Attorney General

441 Fourth Street, N.W.

Washington, D.C. 20001

Counselfor District of Columbia

DATE:

WILLIAM L. PARDEE

CAROL IANCU

Assistant Attorneys General

Environmental Protection Division

Offce of the Attorney General

One Ashburton Place

Boston, Massachusetts 02108

DATE:lJ.. /0- /D

or Commonwealth of Massachusetts

Counselfor City of New York

Page 10 of 11
DATE: 12/16/2010

DATE: 12/16/2010

DATE: 12/20/2010

Page 11 of 11

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DAVID D. DONIGER

Natural Resources Defense Council

1200 New York Avenue NW, Suite 400

Washington, DC 20005

Counsel for Natural Resources Defense Council

/..;;;?~Il (.....-...... /~;/. -''). /7'/

r.,.;,ii!:.._ .....;':l"., -- ..t;_~".._ .r" ".--..... / ...~...."'___,::: /'

JOANNE SPALDING

Sierra Club

85 Second Street

San Francisco, CA 94105

Counsel for Sierra Club

tJ~ ?~-/1J kJ~(/

VICKIE PATTON

Environmental Defense Fund

2334 N. Broadway

Boulder, CO 80304

Counsel for Environmental Defense Fund