AIR POLLUTION CONTROL

PERMIT TO CONSTRUCT

FOR

CONSENT DECREE EMISSION LIMITS

Pursuant to the Air Pollution Control Rules of the State of North Dakota (North Dakota Administrative

Code Article 33

- 15 and Chapter 33

- 15

- 14), the North Dakota Department of Health hereby grants a Permit to Construct for the following source:

I. General Information :

A. Permit to Construct Number : PTC 12003

B. Source :

1. Name : Milton R. Young Station

2. Location : Center, North Dakota, Oliver County

3. Source Type : Fossil

- fuel fired steam electric plant with a nominal generating capacity of 734 megawatts.

4. Equipment at the Facility Subject to Consent Decree :

Unit 1

- Lignite

- fired boiler (nom inal 3200 x 10 6 Btu/hour heat input) and auxiliary equipment

Unit 2

- Lignite

- fired boiler (nominal 6300 x 10 6 Btu/hour heat input) and auxiliary equipment

5. Nitrogen Oxides (NOx) Control Equipment

– The permittee has installed

and is c urrently operating advanced separated overfire air (ASOFA ) and a

selective non

- catalytic reduction system (SNCR) to control NOx emissions. This technology was determined to be Best Available Control Technology (BACT).Page 2 of 18

Permit No. 12003

C. Permittee (Operator) :

1. Name : Minnkota Power Coop.

2. Address : 1822 Mill Road

P.O. Box 13200 Grand Forks, ND 58208

- 3200

II. Permit Conditions :

The Permit to Construct only establishes emission limits as required under Paragraph 152 and 153 of

the Consent Decree in the case of the United States of America and State of North Dakota vs. Minnkota Power Cooperative, Inc., and Square Butte Electric Cooperative; Civil Action No.: 1:06

- CV

- 034. If

new emission units are created to comply with the emission limits, a new Permit to Construct may be required in accordance with N orth Dakota Administrative Code Section 33

- 15

- 14

- 02. The source shall be operated in accordance with the terms of this Permit to Construct and the Title V Permit to Operate until a revised Title V Permit to Operate is i ssued. The source is subject to all applicable rules, regulations, and orders now or hereafter in effect of the North Dakota Department of Health and to the conditions specified below:

A. Special Conditions :

1. Definitions

a) A “ 30

- day rolling average emission rate ” shall be determined by calculating an arithmetic average of all hourly emission rates in

lbs/ 10 6 Btu for the current operating day and the previous 29 operating day s. A new 30

- day rolling average emission rate shall be calculated

for each new operating day . Each 30

- day rolling average emission

rate shall include all start

- up, shutdown, and malfunction periods

within each operating day . A malfunction shall be excluded from this

emission rate

, however , if it is determined to be a Force Maje ure Event and satisfies the Force Majeure provisions of th e Consent Decree. The reference methods for determining SO 2 and NO

x emission rate s shall be those specified in 40 C.F.R. Part 75, Appendix F.

Basis: Consent Decree, Paragraph 5

b) A “ 30

- day rolling average removal efficiency ” means the percent reduction in the mass of a pollutant achieved by a u nit’s pollution

control device over a 30 operating day period. This percentage shall be calculated by subtracting the u nit’s outlet 30

- day rol ling average

emission rate from the u nit ’ s inlet 30

- day rolling average emission rate

, dividing that difference by the unit’s inlet 30

- day rolling average emission rate, and then multiplying by 100. A new 30

- day rolling

average removal efficiency shall be calculated for each new operating day , and shall include all start

- up, shutdown and malfunction periods

with in each operating day . A m alfunction shall be excluded from thisPage 3 of 18

Permit No. 12003

removal e fficiency , howe v er, if it is determined to be a Force Majeure

e vent and satisfies the Force Majeure provisions of th e Consent Decree. The reference method for determining both the inlet and

outlet 30

- day rolling average emission rate , for the purposes of calculating the SO 2 30

- day rolling average removal efficiency

, shall be that specified in 40 C.F.R. Part 75, Appendix F.

Basis: Consent Decree, Paragraph 6

c) “CEMS” or “ c ontinuous emission m onitoring s ystem,” means for obligations involving NO

x and SO 2 under this permit and the Consent Decree, the devices defined in 40 C.F.R. § 72.2, and installed and maintained as required by 40 C.F.R. Part 75.

Basis: Consent Decree, Paragraph 7

d) “Consent Decree” means the Consent Decree entered by the United

States District Court for the District o f North Dakota for Civil Action

No.: 1:06

- cv

- 034, July 27, 2006

.

e) “ Emission rate ” for a given pollutant means the number of pounds of the pollutant emitted per million British thermal units of heat input (lb/ 10 6 Btu), measured in accordance with the Consent Decree.

Basis: Consent Decree

, Paragraph 10

f) “EPA” means the United States Environmental Protection Agency.

Basis: Consent Decree, Paragraph 11

g) “ESP” means electrostatic precipitator, a pollution control device for

the reduction of PM.

Basis: Consent Decree, Paragraph 12

h) “Flue g as d esulfurization s ystem” or “FGD” means a pollution control device that employs flue gas desulfurization technology, including an absorber utilizing lime, flyash, or limestone slurry, for the reduction of

sulf ur dioxide emission s.

Basis: Consent Decree, Paragraph 13

i) “Fossil f uel” means any hydrocarbon fuel, including coal, petroleum

coke , petroleum oil or natural gas

.

Basis: Consent Decree, Paragraph 14Page 4 of 18

Permit No. 12003

j) “lb/10 6 Btu” means one pound of a pollutant per m illion Brit ish thermal units of heat input.

Basis: Consent Decree, Paragraph 15

k) “ Malfunction ” means malfunction as that term is defined under 40 C.F.R § 60.2 (July 1, 2004).

Basis: Consent Decree, Paragraph 16

l) “NO

x ” means oxides of nitrogen, measured in accordance with the provisions of the Consent Decree.

Basis: Consent Decree, Paragraph 21

m) “NO

x allowance” means an authorization or credit to emit a specified

amount of NO

x that is allocated or issued under an emissions trading or marketable permit program of any kind established under the federal Clean Air Act or the North Dakota State Implementation Plan.

Basis: Consent Decree, Paragraph 22

n) “ Operating day ” means any calendar day i n which a u nit fires fossil

fuel.

Basis: Consent Decree, Paragraph 26

o) “Plant

- w ide 12

- m onth r olling a verage t onnage” means the sum of the tons of the pollutant in question emitted from the Milton R. Young Station in the most recent complete month and the previous eleven (11)

months. A new p lant

- w ide 12

- m onth r olling a verage t onnage shall be

calculated for each n ew complete month in accordance with the provisions of th e Consent Decree. The calculation of each p lant

- w ide

12

- m onth r olling a verage t onnage shall include the pollutants emitted during the periods of startup, shutdown, and m alfunction within each calendar month, unless the m alfunction event is also deemed a “Force Majeure Event” as defined in Section XIV of th e Consent Decree (Force Majeure), in which case such emission s shall be excluded

.

Basis: Consent Decree, Paragraph 28

p) “Plant

- w ide t onnage for o ne c alendar y ear” means the sum of the tons of the pollutant in question emitted from the Milton R. Young Station in any 12

- Month calendar year. A new p lant

- w ide t onnage for o ne

c alendar y ea r shall be calculated for each new calendar yea r. The

calculation of each p lant

- w ide t onnage for o ne c alendar y ear shall include the pollutants emitted during periods of startup, shutdown andPage 5 of 18

Permit No. 12003

m alfunction within each 12

- Month calendar year, unless the

m alfunction event is also deemed a “Force Majeure Event” as defined

in Section XIV of th e Consent Decree (Force Majeure), in which case

such emission s shall be excluded

.

Basis: Consent Decree, Paragraph 29

q) “Plant

- w ide t onnage for the a nnual a verage of t wo c alendar y ears” means the sum of the tons of the pollutant in question emitted from the Milton R. Young Station in any two consecutive 12

- month calendar years, divided by two. A new p lant

- w ide t onnage for the a nnual

a verage of t wo c alendar years shall be calculated for each new complete 12

- month calendar year. The calculation of each p lant

- w ide

t onnage for the a nnual a verage of t wo c alendar y ears shall include the pollutants emitted during the periods of startup, shutdown and

m alfun ction within each 12

- m onth calendar year, unless the

m alfunction event is also deemed a “Force Majeure Event” as defined

in Section XIV of th e Consent Decree (Force Majeure), in which case

such emission s shall be excluded

.

Basis: Consent Decree, Paragrap h 30

r) “PM” means particulate matter measured in accordance with the provision of th e Consent Decree.

Basis: Consent Decree, Paragraph 31

s) “PM e mission rate ” means the average number of pounds of PM emitted per million British thermal units of heat input (lbs/ 10 6 Btu)

from the u nit stack, as measured in an annual stack test from the u nit stack, in accordance with the reference method set forth in 40 C.F.R. Part 60, Appendix A, Method 5 (filterable portion only) or Method 17 (filterable portion only).

Basi s: Consent Decree, Paragraph 33

t) “SO 2 ” m e ans sulfur dioxide, measured in accordance with the provisions of the Consent Decree.

Basis: Consent Decree, Paragraph 40

u) “SO 2 a llowance” means “ allowance ” of SO 2 a s defined in 4 2 U.S.C. § 7651a(3): “an authorization, allocated to an affected u nit 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.”

Basis: Consent Decree, Paragraph 41Page 6 of 18

Permit No. 12003

v) “Unit” means collectively, the coal crusher, stationary equipment that feeds coal to the boiler, the boiler that produces steam for the steam turbine, the steam turbine, the generator, the equipment necessary to operate the generator, steam turbine and boi ler, and all ancillary equipment, including pollution control equipment and systems necessary for the production of electricity. An electric utility steam generating station may be comprise d of one or more u nits.

Basis: Consent Decree, Paragraph 43

w) “St artup” means the period of time from initial fuel combustion to the point in time when the measured heat input to the boiler on a 6

- hour rolling average basis is greater than or equal to 2500 x 10 6 Btu/hr for

Unit 1 and 4800 x 10 6 Btu/hr for Unit 2. For purposes of determining compliance, startup cannot exceed 61 hours for Unit 1 and 115 hours

for Unit 2.

Basis: BACT Determination

2. Emission Limits

a) Unit 1 Boiler

1) SO 2

– The permittee shall achieve and maintain a 30

- d ay

r olling a verage r emoval e fficien cy of at least ninety

- five percent (95%).

Basis: Consent Decree, Paragraph 45

2) NO

x – Except during startup, the permittee shall not discharge

NO

x into the atmosphere in excess of 0.36 lb/10 6 Btu of heat input on a 30

- day rolling a verage basis. During startup, NO

x emission s shall not exceed 2070.2 lb/hr on a 24

- hour rolling

average basis.

Basis: BACT Determination

3) PM

– The permittee shall achieve and maintain a PM e mission

rate no greater than 0. 0 30 lb/10 6 Btu.

Basis: Consent Decree, Paragraph 7 7Page 7 of 18

Permit No. 12003

b) Unit 2 Boiler

1) SO 2

– The permittee shall achieve and main tain a 30

- d ay

r olling a verage r emoval e fficiency of at least ninety percent (90%).

Basis: Consent Decree, Paragraph 47

2) NO

x – Except during startup, the permittee shall not discharge

NO

x into the atmosphere in excess of 0.35 lb/10 6 Btu of heat input on a 30

- day rolling average basis. During startup, NO

x emission s shall not exceed 3995.6 lb/hr on a 24

- hour rolling average basi s.

Basis: BACT Determination

3) PM

– the permittee shall achieve and maintain a PM emission rate no greater than 0.030 lb/10 6 Btu.

Basis: Consent Decree

, Paragraph 76

c) Plant

- Wide

1) Beginning January 1, 2012, and each year thereafter, the permittee shall not emit more than 11,500 tons of SO 2 per year based on a p lant

- w ide t onnage for the a nnual a verage of t wo

c alendar y ears; and

Basis: Consent Decree, Subp aragraph 50.c

2) In the event that Milton R. Young Unit 3 is not operational by December 31, 2015, then beginning January 1, 2014, and each year thereafter, the permittee shall not emit more than 8,500

tons of SO 2 per year based on a p lant

- w ide t onnage for the

a nnual a vera ge of t wo c alendar y ears.

Basis: Consent Decree

, Subp aragraph 50.d

3. Surrender of SO 2 Allowances

a) For purposes of this condition, the “surrender of allowances” means permanently surrendering allowances from the accounts administered by EPA for Units 1 and 2

– and from Unit 3 to the extent that SO 2 allowances are allocated by EPA to that u nit

– so that such SO 2 Allowances can never be used to meet any compliance requirement

under the federal Clean Air Act, the North Dakota State Implementation Plan, or th e Consent Decree.Page 8 of 18

Permit No. 12003

Basis: Consent Decree, Paragraph 54

b) For each year specified below, the permittee shall surrender to EPA, or

transfer to a non

- profit third party elected by the permittee for

surrender

, SO 2 Allowances that have been allocated to the Milton R. Young Station for the specified calendar year :

Calendar Year Amount

2012

- 2015 4,346 a llowances

2016

- 2018 8,693 a llowances

2019 12,170 a llowances

2020 and thereafter 14,886 a llowances if Milton R. Young Units 1, 2, and 3 (as proposed) are operational by December 31, 2015, and
17,886 a llowances if only Milton R. Young Units 1 and 2 are operational by December 31, 2015

The permittee shall make such surrender annually, within forty

- five (45) days of their receipt from EPA of the Annual Deduction Reports

for SO 2

. Any surrender need not include the specific SO 2 a llowances

that were allocated to the permittee, so long as the permittee surrender s SO 2 a llowances that are from the same year or an earlier year and that are equal to the number required to be surrendered under this

Condition

. The requirements in Subsection (IV(C)) of the C onsent Decree pertaining to the permittee’s retirement of SO 2 a llowances are

permanent injunctions not subject to any termination provision of th is permit or the Consent Decree.

Basis: Consent Decree, Paragraph 55

c) If any SO 2 a llowances are transferred directly to a non

- profit third party, the permittee shall include a description of such transfer in the next report submitted to EPA and the Department pursuant to Section XI (Periodic Reporting) of th e Consent Decree. Such repor t shall:

1) provide the identity of the non

- profit third

- party recipient(s) of the

SO 2 a llowances and a listing of the serial number of the transferred

SO 2 a llowances; and 2) include a certification by the third

- party recipient(s) stating that the recipient(s) will not sell, trade, or otherwise exchange any of the

allowances and will not use any of the SO 2 a llowances to meet any obligation imposed by any environmental law.

No later than the third periodic report due after the transfer of any SO 2

a llowances, the permittee shall include a statement that the third

- partyPage 9 of 18

Permit No. 12003

recipient(s) surrendered the SO 2 a llowances for permanent surrender to EPA in accordance with the provisions of Condition II.A.3(a) and (b) within one (1) year after the permittee transferred the SO 2

a llowances to them. The permittee shall not have complied with the

SO 2 a llowances surrender requirements of this condition until all

third

- party recipient(s) shall have actually surrendered the transferred

SO 2 a llowances to EPA.

Basis: Consent Decree, Paragraph 56

d) For all SO 2 a llowances surrendered to EPA, the permittee or the

third

- party recipient(s) (as the case may be) shall first submit an SO 2

a llowance transfer request fo r m to EPA’s Office of Air and Radiation’s Clean Air Act Markets Division directing the transfer of such SO 2

a llowances 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, the permittee or the third

- party recipient(s) shall irrevocably authorize the transfer o f these SO 2 a llowances and identify

– by name of account and any applicable serial or other

identification numbers or station na mes

– the source and location of the

SO 2 a llowances being surrendered.

Basis: Consent Decree, Paragraph 57

4. Use of NO

x Allowances

a) Except as provided in the Consent Decree , t he permittee shall not sell

or trade any surplus NO

x a llowances allocated to Units 1, 2 and 3 at the Milton R. Young Station that would otherwise be available for sale or trade as a result of the actions taken by the permittee to comply with the requirements of the Consent Decree.

Basis: Consent Decree, Paragraph 68

b) The number of NO

x a llowances that are surplus to the permittee’s NO

x

a llowance

- holding requirements shall be equal to the amount by which

the NO

x a llowances allocated to the permittee’s Units 1, 2 and 3 at the Milton R. Young Station for a particular year are greater than the total

amount of NO

x emission s from those same u nits for the same year.

Basis: Consent Decree, Paragraph 69

c) Provided that the permittee is in compliance with the NO

x emission limitations of this permit, nothing in this permit or the Consent Decree shall preclude the permittee from selling or transferring NO

x

a llowances allocated to the Milton R. Young Station that become

available for sale or trade as a result of:Page 10 of 18

Permit No. 12003

1) activities t hat reduce NO

x emission s from any u nit at the Milton R. Young Station prior to the date of entry of the
Consent Decree; 2) the installation and operation of any NO

x pollution control technology or technique that is not otherwise required under

the Consent Dec ree; 3) achievement and maintenance of NO

x emission rate s below the

emission limits required by Condition II.A.2 of this permit. 4) permanent shutdown of any u nit at the Milton R. Young Station not otherwise required by the Consent Decree; and 5) o ther emission reduction measures that are agreed to by the Parties to the Consent Decree and made enforceable through

modi fications of the Consent Decree;

s o long as the permittee timely report s the generation of such surplus

NO

x a llowances in accordance with Sectio n XI (Periodic Reporting ) of

the Consent Decree.

The permittee shall be allowed to sell or transfer NO

x a llowances equal

to the NO

x emission s reductions achieved for any given year by any of the actions specified in Condition II.A.4(c)(2) through (5) o nly to the

extent that the total NO

x emission s from all u nits at the Milton R. Young Station are below the emission s limits required by this permit

.

Basis: Consent Decree, Paragraph 70

d) The permittee may not purchase or otherwise obtain NO

x a llowances

from another resource for purposes of complying with the requirements of the Consent Decree. However, nothing in this permit

or the Consent Decree shall prevent the permittee from purchasing or

otherwise obtaining NO

x a llowances from another source for purposes of complying with State or Federal Clean Air Act requirements to the extent otherwise allowed by law.

Basis: Consent Decree, Paragraph 71

5. General SO 2 Provisions

a) In determining e mission rate s for SO 2 , the permittee shall use CEMS in

accordance with th e reference methods specified in 40 C.F.R. Part 75.

Basis: Consent Decree, Paragraph 58

b) For the purpose of calculating the 30

- day rolling average removal efficiency , the outlet SO 2 e mission rate and the inlet SO 2 e mission rate shall be determined based on the data generated in accordance with 40Page 11 of 18

Permit No. 12003

C.F.R. Part 75 (using CEMS data from both the inlet and outlet of the control device).

Basis: Consent Decree, Paragraph 59

c) If any construction allows any flue gas to by

- pass the SO 2 pollution control equipment, the outlet 30

- day rolling average emission rate shall

be determined from SO 2 CEMS located after the by

- pass return, and

the inlet 30

- day rolling average emission rate shall be determined from

SO 2 CEMS lo cated before the by

- pass

.

Basis: Consent Decree, Paragraph 60

6. General NO

x Provisions

a) In determining e mission rate s for NO

x , the permittee shall use CEMS in accordance with the reference methods specified in 40 C.F.R. Part

75.

Basis: Consent Decree, Paragraph 72

b) At any time following the commencement of operation of the specific

NO

x control technologies required to meet the NO

x emission limits in Condition II.A.2, the permittee may petition the plaintiffs listed in the Consent Decree to revise the ap plicable Phase II 30

- day rolling average

emission rate for NO

x . In the petition, the permittee shall demonstrate and explain why it cannot consistently achieve and

maintain the 30

- d ay r olling a verage NO

x e mission r ate required by

Condition II.A.2 for the u nit in question, considering all relevant

information. The permittee shall include in such petition a proposed

alternative 30

- day rolling average emission rate for NO

x . The permittee shall also retain a qualified contractor to assist in the preparation and completion of the petition for an alternative 30

- day rolling average emission rate for NO

x . The permittee shall provide

with each petition all pertinent documents and data. If the Plaintiff s listed in the Cons ent Decree disapprove the 30

- day rolling average

emission rate for NO

x proposed by the permittee, such disapproval shall be subject to the provisions of Section XV (Dispute Resolution) of the Consent Decree. The permittee shall submit any petition for

any u nit under this c ondition no later than six (6) months after the final compliance date specified for the u nit in Paragraph 67 of the Consent Decree. The compliance dates are December 31, 2010 for Unit 2 and December 31, 2011 for Unit 1.

Basis: Consent Decree, P aragraph 73Page 12 of 18

Permit No. 12003

c) The permittee shall continuously operate all NO

x control technology installed on the Milton R. Young Units at all times that the u nit served is in operation, consistent with the technological limitations,

manufacturers ’ specifications to the extent practicable, and good engineering and maintenance practices for the NO

x control technology. The permittee need not operate NO

x control technology during periods of m alfunction of the NO

x control technology, or during period s of m alfunction of the u nit that have a significant adverse impact on the operation of the NO

x control technology, provided that

the permittee satisf ies the requirements for m alfunction e vents as set forth in Paragraph 138 ( Malfunction Events) of the Consent Decree. As set forth in Paragraph 138 of the Consent Decree, a m alfunction may also constitute a Force Majeure e vent if it meets the requirements for a Force Majeure e vent in Section XIV (Force Majeure) of the

Consent Decree.

Basi s: Consent Decree, Paragraph 74

7. Continuous Operation of SO 2 Controls

The permitte e shall continuously operate each FGD at all times that the u nit it serves is in operation, consistent with the technological limitations, manufacturers’ specifications, and good engineering and maintenance practices for the FGDs, for minimizing emission s to the extent practicable. The permittee need not operate an FGD system during periods of m alfunction of the FGD, or during periods of m alfunction of the u nit that have a significant adverse impact on the operation of the FG D , provided that the permittee

satisfies the requirements for a m alfunction as set forth in Paragraph 138 ( Malfunction s ) of the Consent Decree. A s set forth in Paragraph 138 of the

Consent Decree, a m alfunction may also constitute a Force Majeure e vent if it

meets the requirements for a Force Majeure e vent in Section XIV (Force Majeure) of the Consent Decree.

Basis: Consent Decr ee, Paragraph 48

8. Unit s 1 and 2 PM Stack Tests

a) The permittee shall conduct annual PM performance testing on Milton R. Young Station Unit s 1 and 2 . Such annual performance testing may be satisfied by stack tests conducted in a given year, in accordance with the permittee’s Title V Permit to Operate.

Basis: Consent Decree, Paragraph 80

b) In determining the PM e mission rate , the permittee shall use the reference methods specified in 40 C.F.R. Part 60, App endix A, Method 5 (filterable portion only) or 40 C.F.R. Part 60, App endix A, MethodPage 13 of 18

Permit No. 12003

17 (filterable portion only), using stack tests, or alternative methods that are requested by the permi ttee and approved by EPA. The permittee shall also calculate the PM e mission s r ate from annual stack tests in accordance with 40 C.F.R. § 60.8(f). In addition, the permittee

shall submit all the results of each PM stack test to the Department and

EPA wit hin fort y

- five (45) days of completion of each test.

Basis: Consent Decree, Paragraph 81

c) Within 180 days after the permittee complete s the installation of the Unit 1 FGD, the permittee shall conduct a performance test

demonstration to ensure that the PM emission limitation set forth in Condition II.A.2 can be consistently achieved in practice, including all requirements pertaining to proper operation and maintenance of control equipment

. If the performance demonstration shows that the control equipment cannot consistently meet the required PM emission limitations, the permittee shall submit a report to EPA and the Department proposing alternative emission limits.

Basis: Consent Decr ee, Paragraph 79

9. ESP Operation

a) The permittee shall continuously operate each ESP at the Milton R. Young Station at all times that each u nit the ESP serves is combusting

f ossil f uel, consistent with good engineering practices for PM control,

to minimize PM emission s to the extent practicable. The permittee need not operate the ESP during periods of m alfunction of the ESP, or during periods of m alfunction of the u nit that have a s ignificant adverse impact on the operation of the ESP, provided that the permittee satisfies the requirements for m alfunction e vents as set forth in Paragraph 138 ( Malfunction Events) of the Consent Decree

. A

m alfunction may also constitute a Force Majeure e ven t if it meets the requirements for a Force Majeure e ven t in Section XIV (Force Majeure) of th e Consent Decree.

Basis: Consent Decree, Paragraph 78

b) The permittee shall continually operate each PM c ontrol d evice on the Milton R. Young Station Units to maximize the PM emission reductions, consistent with the operational and maintenance limitations of the units. Specifically, the permittee shall at a minimum:

( 1 ) energize each section of the ESP for each u n it, regardless of whether that action is needed to comply with opacity limits; ( 2 ) maintain the energy or power levels delivered to the ESP for each Unit to achieve the greatest possible removal of PM;Page 14 of 18

Permit No. 12003

( 3 ) make best efforts to expeditiously repair and return to service

transf orm er

- rectifier sets when they fail; ( 4 ) inspect for, and schedule for repair, any openings in ESP casings and ductwork to minimize air leakage; ( 5 ) optim ize for Unit 1 the plate

- cleaning and discharge

- electrode cleaning systems for the E SP by varying the cycle time, cycle frequency, rapper

- vibrator intensity , and number of strikes per cleaning event; and ( 6 ) optimize for Unit 2 the plate

- cleaning system for the E SP by varying the cycle time and frequency of the cycle

.

Basis: Cons ent Decree, Paragraph 75

10. PM CEMS

a) The permittee shall install and operate a PM CEMS in accordance with paragraphs 82 through 88 of the Consent Decree on Unit 2 at the Milton R. Young Station. 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 of lb/10 6 Btu. The permittee shall maintain, in an electronic database, the hourly average emis sion

values of all PM CEMS in lb/10 6 Btu. The permittee shall use reasonable efforts to keep the PM CEMS running and producing data whenever Unit 2 is operating. The permittee shall operate the PM CEMS in accordance with the approved Quality Assurance/Qu ality Control protocol (approved June 16, 2008).

Basis: Consent Decree, Paragraphs 82 and 84

b) The permittee may use the PM CEMs in lieu of the continuous opacity monitoring system (COMS) required by NDAC 3 3

- 15

- 12

- 02, Subpart D (40 CFR 60, Subpart D) and Paragraph 88 of the Consent Decree provided the following conditions are met:

1) The PM CEMs installed are appropriate to the stack conditions at both Units 1 and 2; 2) The PM CEMS are installed, operated and maintained in

accordance with the manufac turer’s recommendations, the applicable requirements of 40 CFR 60.40 et seq . and the

General P rovisions at 40 CFR 60.7

– 60.13; 3) The PM CEMS are certified in accordance with Performance Specification 11 (PS

- 11) at 40 CFR 60, Appendix A; 4) Quality assuranc e/quality control requirements must be performed in accordance with 40 CFR 60, Appendix F, Procedure 2;Page 15 of 18

Permit No. 12003

5) Compliance with the applicable PM emission limits at 40 CFR 60.42(a) must be based on continuous three

- hour rolling average periods during source operation; 6) The permittee must meet all applicable reporting, recordkeeping and operational requirements under 40 CFR

60.40 et seq. and the General Provisions under 40 CFR

60.7

- 60.1 3. Quarterly excess emissions of PM must be reported based on a three

- hour rolling average during source operations; 7) The permittee must demonstrate compliance with the applicable opacity limit by taking weekly visible emissions readings in accordance w ith 40 CFR 60, Appendix A, Method 9. The Method 9 readings must be taken for at least 30 minutes each week, for six consecutive weeks during regular source operation. If continuous compliance with the opacity

limit is demonstrated for six consecutive wee ks, the permittee can begin taking monthly Method 9 readings. 8) Monthly Method 9 readings must be taken for at least one hour each consecutive month but may be performed in no less than

30

- minute intervals during regular source operation; 9) Records of Method 9 readings that document an exceedance of the applicable opacity standard must be submitted with the quarterly excess emission reports required for the PM CEMS; 10) If excess emissions of opacity are identified, the permittee shall

revert back to w eekly Method 9 readings for six consecutive weeks, or until continuous compliance with the opacity limit is demonstrated, whichever is longer; and 11) All Method 9 readings must be taken by a certified observer.

Basis: Consent Decree

, Paragraph 88 and Approval Letter
Dated December 23, 2010

11. Periodic Reporting

a) On a semi

- annual basis until December 31, 2020, and in addition to any other express reporting requirement in the Consent Decree, the permitt ee shall submit to EPA and the Depar tment a progress report, containing :

1. all information necessary to determine compliance with the Consent Decree, including but not limited to information required to be included in the reports pursuant to Paragraphs 49, 55, 56, 70

and 99 of the Consent Decree; and

2. 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 the permittee to mitigate such delay.Page 16 of 18

Permit No. 12003

Basis: Con sent Decree, Paragraph 113

b) In any periodic progress report submitted pursuant to this condition, the permittee may incorporate by reference information previously submitted under their Title V permitting requirements, provided that

the permittee attaches the Title V permit report (or pertinent portions of such report) and provide s a specific reference to the provisions of the Title V permit report that are responsive to the information required in the periodic progress report.

Basis: Consent Decree, Paragraph 114

c) In addition to the progress reports required pursuant to this condit i on, the permittee shall provide a written report to the U.S. Environmental Protection Agency and the Department of any violation of the requirements of the Consent Decree, including exceedances of the

30

- day rolling average removal efficiencies, 30

- day rolling average emission rates, PM emission rate s , and plant

- wide tonnage limits within ten (10) business days of when the permittee knew or should have known of any such viol ation. In this report, the permitee shall explain the cause or causes of the violation and all measures taken or to be taken by the permitee to prevent such violations in the future. Exceedances of the PM emission rates shall be reported within forty

- fiv e (45) days of the completion of the stack test that

demonstrates such non

- compliance. In this report, the permittee shall explain the cause or causes of the violation and all measures taken or to be taken by the permittee to prevent such violations in th e future.

Basis: Consent Decree, Paragraph 115

d) Each report shall be signed by the permittee’s Environmental Manager or, in his or her absence, the permittee’s Vice President of Generation, or higher ranking official, and shall contain the following cert ification:

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 information, I hereby certify under penalty of law that, to the best of my knowledge and belief, this information is true,

accurate and com plete. I understand that there are significant penalties for submitting false, inaccurate, or incomplete information to the United States and/or the Department.Page 17 of 18

Permit No. 12003

Basis: Consent Decree, Paragraph 116

B. General Conditions :

1. This permit shall in no way permit or authorize the mainte nance of a public nuisance or danger to public health or safety.

2. The permittee shall comply with all State and Federal environmental laws and rules. In addition, the permittee shall comply with all local building, f ire, zoning, and other applicable ordinances, codes, rules and regulations.

3. All reasonable precautions shall be taken by the permittee to prevent and/or minimize fugitive emission s during any construction

.

4. The permittee shall at all times, includin g periods of startup, shutdown, and

malfunction , maintain and operate Unit 1 and Unit 2 and all other emission units including associated air pollution equipment and fugitive dust suppression operations in a manner consistent with good air pollution contro l practices for minimizing emission s.

5. Any duly authorized officer, employee or agent of the North Dakota Department of Health may enter and inspect any property, premise or place at which the source listed in Item I.B. of this permit is or will be loca ted at any time for the purpose of ascertaining the state of compliance with the North Dakota Air Pollution Control Rules and the conditions of this permit.

6. Any violation of a condition issued as part of this approval to construct is regarded as a viol ation of construction authority and is subject to enforcement

action.

7. The conditions of this permit herein become, upon the effective date of this permit, enforceable by the Department pursuant to any remedies it now has or may in the future have, under the North Dakota Air Pollution Control Law, NDCC Chapter 23

- 25. Each and every condition of this permit is a material part thereof, and is not severable.

FOR THE NORTH DAKOTA

DEPARTMENT OF HEALTH

Date: ___________________________ By: _________

_______________________ Terry L. O’Clair, P.E.

Director

D ivision of Air QualityPage 18 of 18

Permit No. 12003

Attachment 1: Consent Decree

United States of America and State of North Dakota

vs Minnkota Power Cooperative and Square Butte Ele ctric Cooperative

Civil Action No.: 1:06

– cv

– 034

The attached Consent Decree is for information purposes only and the conditions are not an enforceable portion of this Permit to Construct unless specifically listed in the permit.