____________________________________ 

IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF KENTUCKY 

CENTRAL DIVISION 

LEXINGTON 

) 

UNITED STATES OF AMERICA, ) 

)

 Plaintiff, )

 )

 v. ) Civil Action No. 5:07-CV-0075-KSF 

) 

KENTUCKY UTILITIES COMPANY, ) 

)

 Defendant. ) 

) 

____________________________________) 

CONSENT DECREE 
TABLE OF CONTENTS

I. JURISDICTION AND VENUE .................................................................................3 

II. APPLICABILITY.......................................................................................................3 

III. DEFINITIONS............................................................................................................4 

IV. NOx EMISSION REDUCTIONS .............................................................................11 

 A. NOx Emission Controls....................................................................................11 

 B. General NOx Provisions...................................................................................11 

C. Use and Surrender of NOx Allowances ...........................................................12 

V. SO2 EMISSION REDUCTIONS..............................................................................15 

 A. SO2 Emission Controls ....................................................................................15 

 B. General SO2 Provisions....................................................................................15 

C. Use and Surrender of SO2 Allowances............................................................15 

VI. PM EMISSION REDUCTIONS ..............................................................................17 

 A. PM Controls.....................................................................................................17 

B. PM Emission Rate............................................................................................18 

C. PM Emissions Monitoring ...............................................................................18 

D. Installation and Operation of PM CEMs .........................................................19 

 E. PM Reporting...................................................................................................20 

VII. PROHIBITION OF NETTING CREDITS OR OFFSETS.......................................21 

VIII. ENVIRONMENTAL MITIGATION PROJECTS...................................................21 

IX. CIVIL PENALTY.....................................................................................................23 

X. RESOLUTION OF CERTAIN CIVIL CLAIMS OF THE UNITED STATES.......24 

XI. PERIODIC REPORTING.........................................................................................26 

XII. REVIEW AND APPROVAL OF SUBMITTALS...................................................29 

 
XIII. STIPULATED PENALTIES....................................................................................30 

XIV. FORCE MAJEURE ..................................................................................................35 

XV. DISPUTE RESOLUTION........................................................................................40 

XVI. PERMITS ..............................................................................................................42 

XVII. INFORMATION COLLECTION AND RETENTION ...........................................45 

XVIII. NOTICES ..............................................................................................................46

XIX. SALES OR TRANSFERS OF OWNERSHIP INTERESTS....................................48 

XX. EFFECTIVE DATE..................................................................................................49 

XXI. RETENTION OF JURISDICTION..........................................................................49 

XXII. MODIFICATION .....................................................................................................50 

XXIII. GENERAL PROVISIONS .......................................................................................50 

XXIV. SIGNATORIES AND SERVICE.............................................................................52 

XXV. PUBLIC COMMENT...............................................................................................52 

XXVI. CONDITIONAL TERMINATION UNDER DECREE...........................................53 

XXVII. FINAL JUDGMENT ................................................................................................54 

APPENDIX 

 
WHEREAS, the United States of America (“the United States”), on behalf of the

United States Environmental Protection Agency (“EPA”), has filed a complaint against 

Kentucky Utilities Company (“Kentucky Utilities”) pursuant to Sections 113(b) and 167 

of the Clean Air Act ("the Act"), 42 U.S.C. §§ 7413(b) and 7477, for injunctive relief and 

the assessment of civil penalties for violations of the Prevention of Significant 

Deterioration ("PSD") provisions of the Act, 42 U.S.C. §§ 7470-92; the New Source 

Performance Standards (“NSPS”) of the Act, 42 U.S.C. § 7411; Title V of the Act, 42 

U.S.C. §§ 7661-7661f; and the State Implementation Plan adopted by the Commonwealth 

of Kentucky and approved by EPA pursuant to Section 110 of the Act, 42 U.S.C. § 7410; 

WHEREAS, in its complaint, the United States alleges, inter alia, that Kentucky 

Utilities modified and thereafter operated an electric generating unit at the Brown Power 

Plant without obtaining the necessary permits or installing and operating the best 

available control technology to control emissions of nitrogen oxides (“NOx”), sulfur

dioxide (“SO2”), and/or particulate matter (“PM”), as the Act requires; that Kentucky 

Utilities modified and thereafter operated this Unit -- Brown Unit 3 -- in a manner that

resulted in emissions of NOx, SO2, and/or PM in violation of applicable New Source 

Performance Standards; and that Kentucky Utilities operated Brown Unit 3 at a heat input 

rate in excess of 4128 million Btus (“MMBtus”) per hour, in violation of a condition 

contained in the plant’s operating permit;

WHEREAS, Kentucky Utilities sought and obtained, on March 1, 2005, a Title V

operating permit that removed the 4128 MMBtu per hour heat input rate as an 

enforceable limit at Brown Unit 3 without going through the appropriate permitting 

procedures, including PSD review; 

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WHEREAS, the United States’ complaint alleges claims upon which relief can be 

granted against Kentucky Utilities under Sections 113 and 167 of the Act, 42 U.S.C. §§ 

7413 & 7477; 

WHEREAS, the United States provided Kentucky Utilities and the

Commonwealth of Kentucky with actual notice of alleged violations in accordance with

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

commencement of suit to the Commonwealth of Kentucky as required by Section 113(b) 

of the Act, 42 U.S.C. § 7413(b); 

WHEREAS, the United States and Kentucky Utilities (collectively, the “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 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, the actions to be taken and the emission reductions to be achieved by

Kentucky Utilities under this Consent Decree are for purposes of resolving the claims

alleged by the United States, and are undertaken by Kentucky Utilities as part of its 

efforts to achieve compliance with the Clean Air Act at Brown Unit 3; 

WHEREAS, Kentucky Utilities denies the allegations in the complaint and

maintains that it has been and remains in compliance with the Act and is not liable for 

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civil penalties or injunctive relief, and nothing herein shall constitute an admission of 

liability; 

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

Sections 111, 113 and 167 of the Act, 42 U.S.C. §§ 7411, 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). Kentucky Utilities consents to, and shall not challenge, entry of this 

Consent Decree and 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

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 and inure to the benefit of the United States and Kentucky Utilities, and 

their successors and assigns, and upon their officers, employees, and agents, solely in 

their capacities as such. 

3. Kentucky Utilities shall provide a copy of the pertinent provisions of this 

Consent Decree to all vendors, suppliers, consultants, contractors, and agents, and to any 

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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, Kentucky Utilities shall be 

responsible for ensuring that all work is performed in accordance with the requirements 

of this Consent Decree. In any action to enforce this Consent Decree, Kentucky Utilities

shall not assert as a defense the failure of their officers, directors, employees, servants, 

agents, or contractors to take actions necessary to comply with this Consent Decree, 

unless Kentucky Utilities establishes that such failure resulted from a Force Majeure

Event, as defined in Section XIV of this Consent Decree. 

III. DEFINITIONS

4. Every term expressly defined by this Consent Decree shall have the 

meaning given to that term by this Consent Decree and, except as otherwise provided in 

this Consent Decree, every other term used in this Consent Decree that is also a term 

under the Act or the regulations implementing the Act shall mean in this Consent Decree 

what such term means under the Act or those implementing regulations. 

“30-Day Rolling Average Emission Rate” shall be expressed in lb/MMBtu and 

calculated in accordance with the following procedure: (1) sum the total pounds of NOx

or SO2 emitted from the Unit during the current Operating Day and the previous twentynine (29) Operating Days; (2) sum the total heat input to the Unit in MMBtu during the 

current Operating Day and the previous twenty-nine (29) Operating Days; and (3) divide 

the total number of pounds of NOx or SO2 emitted during the thirty (30) Operating Days 

by the total heat input during the thirty (30) Operating Days. A new “30-Day Rolling 

Average Emission Rate” for NOx and for SO2 shall be calculated for each new Operating

Day. Except as provided for in this definition and in Paragraphs 76 through 78 

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(Malfunction), each 30-Day Rolling Average Emission Rate for NOx or SO2 shall include 

all emissions that occur during all periods within each Operating Day: (i) Kentucky 

Utilities may exclude emissions that occur during a period of Malfunction from the 

calculation of the 30-Day Rolling Average Emission Rate for NOx or SO2 if Kentucky 

Utilities meets the requirements of Paragraphs 76 and 77; (ii) Kentucky Utilities may 

exclude emissions during start up(s) of Brown Unit 3 following a major outage or during 

the commissioning of new equipment; provided, however, that this start up exclusion 

may not occur more frequently than once every five (5) calendar years and the excluded 

period may not exceed five (5) consecutive Days. 

“30-Day Rolling Average SO2 Removal Efficiency” means the percent reduction

in the mass of SO2 achieved by the Unit’s Flue Gas Desulfurization (“FGD”) system over

a 30-Operating Day period and shall be calculated as follows: (1) sum the total pounds of 

SO2 emitted from the Unit during the current Operating Day and the previous twentynine (29) Operating Days as measured at the outlet of the FGD system for the Unit; (2)

sum the total pounds of SO2 delivered to the inlet of the FGD system for the Unit during

the current Operating Day and the previous twenty-nine (29) 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); (3) subtract the outlet SO2 emissions calculated in step one 

from the inlet SO2 emissions calculated in step two; (4) divide the remainder calculated in 

step three by the inlet SO2 emissions calculated in step two; and (5) 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 

5 
Operating Day. Except as provided for in Paragraphs 76 through 78 (Malfunction), each 

30-Day Rolling Average Removal Efficiency for SO2 shall include all emissions that 

occur during all periods within each Operating Day. Kentucky Utilities may exclude 

emissions that occur during a period of Malfunction from the calculation of the 30-Day 

Rolling Average Removal Efficiency for SO2 if Kentucky Utilities meets the

requirements of Paragraphs 76 and 77. 

“Brown Power Plant” means Units 1, 2 and 3 of the E.W. Brown Power Station 

located in Mercer County, Kentucky. 

“Brown Unit 3” means Unit 3 of the Brown Power Plant. 

“Business Day” shall mean any Day other than Saturday, Sunday, or a federally 

recognized holiday. 

“CEMS” or “Continuous Emission Monitoring System,” means, for obligations 

involving NOx and SO2 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. 

“Clean Air Act” or “Act” means the federal Clean Air Act, 42 U.S.C. §§ 7401-

7671q, and its implementing regulations. 

“Commonwealth” means the Commonwealth of Kentucky. 

“Consent Decree” or “Decree” means this Consent Decree. 

“Continuously Operate” or “Continuous Operation” means that when an emission 

control device, such as a SCR, low NOx burner, over-fire air, FGD, or ESP, is used at 

Brown Unit 3, such control device shall be operated at all times the Unit is in operation,

except during a Malfunction of such control device, consistent with the technological 

6 
limitations, manufacturers’ specifications, and good engineering and maintenance 

practices for such device and the Unit so as to minimize emissions to the extent 

practicable. 

“Day” means calendar day, unless otherwise specified as a Business Day.

“Emission Rate” for a given pollutant means the number of pounds of that 

pollutant emitted per million British thermal units of heat input (lb/MMBtu), measured in 

accordance with this Consent Decree. 

“EPA” means the United States Environmental Protection Agency. 

“ESP” means an electrostatic precipitator, which is a pollution control device for 

the reduction of particulate matter. 

“FGD” means Flue Gas Desulfurization System, which is a pollution control 

device that employs flue gas desulfurization technology, including an absorber utilizing 

lime, flyash, or limestone slurry for the reduction of sulfur dioxide emissions. 

“Fossil Fuel” means any hydrocarbon fuel, including coal, petroleum coke, 

petroleum oil, or natural gas. 

“Kentucky Utilities” means the defendant, Kentucky Utilities Company. 

“lb/MMBtu” means one pound of a pollutant per million British thermal units of 

heat input. 

“Malfunction” means malfunction as that term is defined under 40 C.F.R. § 60.2. 

“MW” means a megawatt or one million Watts.

“NOx” means oxides of nitrogen, measured in accordance with the provisions of 

this Consent Decree. 

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“NOx Allowance” means an authorization or credit to emit a specified amount of 

NOx during the Ozone Season that is allocated or issued by Kentucky. This definition 

shall not apply to any allowance issued by Kentucky related to programs authorizing 

emissions of NOx on an annual basis notwithstanding that such annual allowance includes 

the right to emit NOx during the Ozone Season.

“Operating Day” means any calendar day on which the Unit fires fossil fuel. 

“Ownership Interest” means part or all of Kentucky Utilities’ legal or equitable 

ownership interest in Brown Unit 3. 

“Ozone Season” shall mean the period beginning May 1st and ending September 

30th of any calendar year. 

“Parties” means the United States and Kentucky Utilities Company. “Party”

means one of the named “Parties.” 

“PM” means total filterable particulate matter, measured in accordance with the 

provisions of this Consent Decree. 

“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. Part 52. 

“Project Dollars” means Kentucky Utilities’ expenditures and payments incurred 

or made in carrying out the Environmental Mitigation Projects identified in Section VIII 

(Environmental Mitigation Projects) of this Consent Decree to the extent that such 

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

(Environmental Mitigation Projects) and Appendix A of this Consent Decree, and (b)

8 
constitute Kentucky Utilities’ direct payments for such projects, or Kentucky Utilities’ 

external costs for contractors, vendors, and equipment. 

“SCR” means selective catalytic reduction system, which is a pollution control 

device that employs selective catalytic reduction technology for the reduction of NOx

emissions. 

“SO2” means sulfur dioxide, measured in accordance with the provisions of this 

Consent Decree. 

“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.” 

“Surrender” means, with regard to SO2 and NOx Allowances, complying with the 

procedures set forth herein so that such Allowances can never be used to meet any 

compliance requirement under the Clean Air Act or a state implementation plan. 

“Surplus NOx Allowance” means any NOx Allowance issued by Kentucky for 

Brown Unit 3 that Kentucky Utilities does not need to meet the federal and/or state Clean 

Air Act regulatory requirements for that Unit during the Ozone Season. The number of

NOx Allowances that are surplus to Kentucky Utilities’ Clean Air Act NOx Allowance 

holding requirements shall be equal to the amount by which the NOx Allowances

allocated to Brown Unit 3 for a particular Ozone Season are greater than the total amount

of NOx emissions from that Unit for the same Ozone Season. 

“Title V Permit” means the permit required of Kentucky Utilities’ Brown Power 

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

9 
“Unit” means, for the purposes of this Consent Decree, collectively, at Brown 

Unit 3, the Brown Unit 3 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 boiler, and all ancillary

equipment, including pollution control equipment and systems necessary for the 

production of electricity. An electric utility steam generating station may comprise one 

or more Units. 

“Unit Annual NOx Tonnage Limitation” means the limitation, as specified in this 

Consent Decree, on the total number of tons of NOx emitted from Brown Unit 3 during 

the relevant calendar year (i.e., January 1 through December 31). Compliance with the 

Unit Annual NOx Tonnage Limitation shall be calculated for each new calendar year and 

such calculation shall include all NOx emitted from Brown Unit 3 as reported in the 

electronic data reports required under Title IV of the Clean Air Act during all periods of 

operation during the relevant calendar year. 

“Unit Annual SO2 Tonnage Limitation” means the limitation, as specified in this 

Consent Decree, on the total number of tons of SO2 emitted from Brown Unit 3 during

the relevant calendar year (i.e., January 1 through December 31). Compliance with the 

Unit Annual SO2 Tonnage Limitation shall be calculated for each new calendar year and 

such calculation shall include all SO2 emitted from Brown Unit 3 as reported in the 

electronic data reports required under Title IV of the Clean Air Act during all periods of 

operation during the relevant calendar year. 

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IV. NOx EMISSION REDUCTIONS

A. NOx Emission Controls

5. By no later than December 31, 2012, Kentucky Utilities shall install an 

SCR at Brown Unit 3. 

6. Beginning no later than December 31, 2012, Kentucky Utilities shall 

commence Continuous Operation of the SCR so as to achieve and thereafter maintain at 

Brown Unit 3 a 30-Day Rolling Average Emission Rate for NOx of no greater than 0.070 

lb/MMBtu, except as provided in Paragraph 7 of this Consent Decree. 

7. Beginning no later than December 31, 2012, during any 30-Day period 

used to calculate a 30-Day Rolling Average Emission Rate for NOx, if the dispatch of

Brown Unit 3 requires the operation of Brown Unit 3 at a load level that results in flue

gas temperature so low that it becomes technically infeasible to Continuously Operate the 

SCR, despite best efforts by Kentucky Utilities to do so, Kentucky Utilities shall achieve 

and maintain at Brown Unit 3 a 30-Day Rolling Average Emission Rate for NOx of no 

greater than 0.080 lbs/MMBtu.

8. Beginning thirty (30) days from entry of this Consent Decree, Kentucky 

Utilities shall Continuously Operate the existing low NOx burners and over-fire air at 

Brown Unit 3. 

9. During calendar years 2009 through 2012, Kentucky Utilities shall not 

exceed a Unit Annual NOx Tonnage Limitation at Brown Unit 3 of 4,072 tons of NOx per 

calendar year. 

B. General NOx Provisions

10. In determining emission rates for NOx, Kentucky Utilities shall use CEMS 

in accordance with the reference methods specified in 40 C.F.R. Part 75, except that NOx

11 
emissions data need not be bias-adjusted. At least one hundred eighty (180) days prior to

commencing operation of the SCR, and no later than June 30, 2012, Kentucky Utilities 

shall submit to EPA for review and approval, a plan for the placement and installation of 

NOx CEMS at Brown Unit 3 for the purpose of measuring NOx emissions from only 

Brown Unit 3, and not Brown Units 1 and 2. Kentucky Utilities shall install and 

commence continuous operation of such CEMS within one hundred twenty (120) days of 

receiving EPA’s approval of the plan. 

C. Use and Surrender of NOx Allowances

11. Except as may be necessary to comply with Section XIII (Stipulated

Penalties), Kentucky Utilities shall not use NOx Allowances to comply with any 

requirement of this Consent Decree, including compliance with any emission limitation,

by using, tendering, or otherwise applying NOx Allowances to achieve compliance or

offset any emissions above the limits specified in this Consent Decree. 

12. Except as provided in this Consent Decree, Kentucky Utilities shall not 

sell, trade, or transfer any NOx Allowances allocated to Brown Unit 3 that would

otherwise be available for sale, trade, or transfer as a result of the actions taken by

Kentucky Utilities to comply with the requirements of this Consent Decree. The NOx

Allowances allocated to Brown Unit 3 may be used by Kentucky Utilities only to meet its

own federal and/or state Clean Air Act regulatory requirements for that Unit. 

13. For each calendar year beginning with calendar year 2009 and continuing

through calendar year 2020, Kentucky Utilities shall surrender to EPA, or transfer to a 

non-profit third party as provided herein, Surplus NOx Allowances, except as provided in 

Paragraph 17. Kentucky Utilities shall surrender such Surplus NOx Allowances within 

sixty (60) days of the end of each calendar year. 

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14. For all Surplus NOx Allowances required to be surrendered to EPA, 

Kentucky Utilities or the third-party recipient(s) (as the case may be) shall first submit a

NOx Allowance transfer request form to EPA’s Office of Air and Radiation’s Clean Air 

Markets Division directing the transfer of such Surplus NOx 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, Kentucky Utilities or the thirdparty recipient(s) shall irrevocably authorize the transfer of these Surplus NOx

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

identification numbers or station names – the source and location of the Surplus NOx

Allowances being surrendered. 

15. If any Surplus NOx Allowances required to be surrendered under this 

Consent Decree are transferred to a non-profit third party, Kentucky Utilities shall

include a description of such transfer in the next report submitted to EPA pursuant to

Section XI (Periodic Reporting) of this Consent Decree. Such report shall: (a) provide 

the identity of the non-profit third party recipient(s) of the Surplus NOx Allowances and a

listing of the serial numbers of the transferred Surplus NOx Allowances; and (b) 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 Surplus NOx

Allowances to meet any obligation imposed by any environmental law. No later than the 

third periodic report due after the transfer of any Surplus NOx Allowances, Kentucky 

Utilities shall include a statement that the third-party recipient(s) surrendered the Surplus 

NOx Allowances for permanent surrender to EPA in accordance with the provisions of

Paragraph 14 within one year after Kentucky Utilities transferred the Surplus NOx

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Allowances to them. Kentucky Utilities shall not have complied with the Surplus NOx

Allowance surrender requirements of this Paragraph until all third-party recipient(s) shall 

have actually surrendered the transferred Surplus NOx Allowances to EPA. 

16. The requirements in this Consent Decree pertaining to Kentucky Utilities’ 

use and surrender of Ozone Season NOx Allowances (Paragraphs 11, 12, 13, 14, 15 and 

17) are permanent injunctions that are not subject to any termination provision of this 

Consent Decree, and shall survive any termination of this Consent Decree as long as 

Kentucky continues to allocate NOx Allowances for the Ozone Season. This Paragraph 

and the requirements in Paragraphs 11, 12, 13, 14, 15 and 17 shall not apply to any future 

emissions trading program involving only annual NOx limits and/or annual NOx

allowances.

17. Nothing in this Consent Decree shall preclude Kentucky Utilities from 

selling or transferring NOx Allowances allocated to Brown Unit 3 that become available 

for sale or trade solely as a result of the achievement and maintenance of a NOx emission

rate below a 30-Day Rolling Average Emission Rate for NOx of 0.070 lb/MMBtu. 

Kentucky Utilities must timely report the generation of such super-compliant NOx

Allowances in accordance with Section XI (Periodic Reporting) of this Consent Decree. 

18. Nothing in this Consent Decree shall prevent Kentucky Utilities from 

purchasing or otherwise obtaining NOx Allowances from another source for purposes of 

complying with state or federal Clean Air Act requirements to the extent otherwise 

allowed by law. 

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V. SO2 EMISSION REDUCTIONS

A. SO2 Emission Controls

19. Beginning no later than December 31, 2010, Kentucky Utilities shall 

install a FGD at Brown Unit 3. 

20. Beginning no later than December 31, 2010, Kentucky Utilities shall 

commence Continuous Operation of the FGD so as to achieve and thereafter maintain a 

30-Day Rolling Average Emission Rate for SO2 of no greater than 0.100 lb/MMBtu or a

30-Day Rolling Average SO2 Removal Efficiency of not lower than 97%. 

21. During calendar years 2009 and 2010, Kentucky Utilities shall not exceed 

a Unit Annual SO2 Tonnage Limitation at Brown Unit 3 of 31,998 tons of SO2 per 

calendar year. 

22. Beginning with calendar year 2011, and continuing annually on a calendar 

year basis thereafter, Kentucky Utilities shall not exceed a Unit Annual SO2 Tonnage 

Limitation at Brown Unit 3 of 2,300 tons of SO2 per calendar year. 

B. General SO2 Provisions

23. In determining Emission Rates and Removal Efficiencies for SO2, 

Kentucky Utilities shall use CEMS in accordance with those reference methods specified 

in 40 C.F.R. Part 75. Inlet pounds of SO2 will be calculated as described in the definition 

of 30-Day Rolling Average SO2 Removal Efficiency. 

C. Use and Surrender of SO2 Allowances

24. Except as may be necessary to comply with Section XIII (Stipulated

Penalties), Kentucky Utilities shall not use SO2 Allowances to comply with any 

requirement of this Consent Decree, including compliance with any emission limitation,

15 
by using, tendering, or otherwise applying SO2 Allowances to achieve compliance or 

offset any emissions above the limits specified in this Consent Decree. 

25. By March 1, 2009, or thirty (30) days after entry of the Consent Decree, 

whichever is later, Kentucky Utilities shall permanently surrender to EPA, or transfer to a

non-profit third party, a total of 53,000 SO2 Allowances of 2008 or earlier vintage. 

26. If any SO2 Allowances required to be surrendered under this Consent 

Decree are transferred directly to a non-profit third party, Kentucky Utilities shall include

a description of such transfer in the next report submitted to EPA pursuant to Section XI

(Periodic Reporting) of this Consent 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 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 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, Kentucky Utilities shall include a statement that the third 

party recipient(s) surrendered the SO2 Allowances for permanent surrender to EPA in 

accordance with the provisions of Paragraph 27 within one year after Kentucky Utilities 

transferred the SO2 Allowances to them. Kentucky Utilities shall not have complied with 

the SO2 Allowance surrender requirements of this Paragraph until all third party 

recipient(s) shall have actually surrendered the transferred SO2 Allowances to EPA. 

27. For all SO2 Allowances surrendered to EPA, Kentucky Utilities or the 

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

16 
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, Kentucky Utilities or the 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 of the SO2 Allowances being surrendered. 

28. Nothing in this Consent Decree shall prevent Kentucky Utilities 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. 

VI. PM EMISSION REDUCTIONS

A. PM Controls 

29. Beginning thirty (30) days after entry of this Consent Decree, and 

continuing thereafter, Kentucky Utilities shall Continuously Operate the ESP at Brown 

Unit 3 to maximize PM emission reductions at all times when the Unit is in operation, 

provided that such operation of the ESP is consistent with the technological limitations, 

manufacturer’s 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, 

Performance Specification 11, and Quality Assurance Requirements under Appendix F,

Procedure 2, as required by this Consent Decree, Kentucky Utilities shall, at a minimum:

(a) fully energize each section of the ESP; (b) operate automatic control systems on the 

ESP, including the plate-cleaning and discharge electrode cleaning systems, to maximize

PM collection efficiency; (c) maintain power levels delivered to the ESP, consistent with 

manufacturers’ specifications, the operational design of the Unit, and good engineering 

17 
practices; and (d) inspect the ESP for any openings or leakage in ESP casings, ductwork, 

and expansion joints, and make repairs to any section of the ESP needing repair during 

the next scheduled or unscheduled outage. 

B. PM Emission Rate 

30. No later than December 31, 2010, and continuing thereafter, Kentucky 

Utilities shall Continuously Operate the ESP at Brown Unit 3 to achieve a PM Emission 

Rate no greater than 0.030 lb/MMBtu. Compliance with the 0.030 lbs/MMBtu emission 

rate shall be demonstrated by stack tests in accordance with Paragraphs 31-32. 

C. PM Emissions Monitoring

31. Beginning in calendar year 2011, and continuing in each calendar year 

thereafter, Kentucky Utilities shall conduct a stack test for PM on the common stack 

servicing Brown Unit 3 at least one time each calendar year, with each stack test

conducted at least six (6) months apart. The stack test requirement imposed by this 

Paragraph may be satisfied by stack tests conducted by Kentucky Utilities as required by 

its permits held for Brown Unit 3 for any year that such stack tests are required under the 

permits. 

32. The reference methods and procedures for determining compliance with 

PM Emission Rates shall be those specified in 40 C.F.R. Part 60, Appendix A, Method 5, 

5B, or 17, or an alternative method requested for use by Kentucky Utilities, and approved 

for use herein by EPA. The alternative method must conform to the EPA requirements

specified in 40 C.F.R. Part 60, Appendix A and 40 C.F.R. § 60.50Da, or any federallyapproved method contained in the Kentucky State Implementation Plan. 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 

18 
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). Kentucky Utilities shall calculate the PM Emission 

Rates from the stack test results in accordance with 40 C.F.R. § 60.8(f), and shall report 

the results of each PM stack test to EPA within forty-five (45) days of completion of each 

test. 

D. Installation and Operation of PM CEMS

33. Kentucky Utilities shall install, correlate, operate, and maintain a PM 

CEMS at the common stack servicing Brown Unit 3, as specified below. The PM CEMS 

shall be comprised of (a) a continuous particle mass monitor that measures particulate 

matter concentrations, directly or indirectly, on an hourly average basis and (b) a CO2

diluent monitor used to convert the concentration to units of lb/MMBtu. Kentucky 

Utilities shall maintain, in an electronic database, the hourly average emission values

produced by the PM CEMS in lb/MMBtu. Kentucky Utilities shall use best efforts to 

keep the PM CEMS running and producing data whenever Brown Unit 3 is in operation.

All periods of monitor malfunction, maintenance or repair shall be noted as such in the 

electronic database. 

34. At least two hundred seventy (270) days prior to commencing operation of 

PM CEMS as set forth in Paragraph 35, and no later than September 30, 2010, Kentucky 

Utilities shall submit to EPA pursuant to Section XII (Review and Approval of 

Submittals) of this Consent Decree: (a) a plan for the installation and certification of a

PM CEMS, and (b) a proposed Quality Assurance/Quality Control (“QA/QC”) protocol 

that Kentucky Utilities shall follow in correlating the PM CEMS. In developing both the 

plan for installation and certification of the PM CEMS and the QA/QC protocol, 

Kentucky Utilities shall use the criteria set forth in 40 C.F.R. Part 60, Appendix B, 

19 
Performance Specification 11, and Appendix F, Procedure 2. Following approval by 

EPA of the protocol, Kentucky Utilities shall thereafter operate each PM CEMS in

accordance with the approved protocol. 

35. Within one hundred eighty (180) calendar days following commencement 

of operation of the FGD, Kentucky Utilities shall install, correlate, maintain, and operate

a PM CEMS on the Unit, in accordance with the PM CEMS installation plan and QA/QC 

protocol approved by EPA pursuant to the preceding Paragraph. No later than ninety

(90) days after Kentucky Utilities begins operation of the PM CEMS, Kentucky Utilities

shall conduct performance specification tests of the PM CEMS to demonstrate 

compliance with the PM CEMS installation and certification plan submitted to and 

approved by EPA in accordance with Section XII (Review and Approval of Submittals) 

and shall report such information to EPA no later than forty-five (45) days after such 

tests. 

E. PM Reporting

36. Following the installation of the PM CEMS, Kentucky Utilities shall 

report to EPA, pursuant to Section XI (Periodic Reporting), the data recorded by the PM

CEMS in the common stack for Brown Units 1, 2 and 3, expressed in electronic format in 

lb/MMBtu on a 6-hour and 24-hour rolling average basis.

37. Although stack tests shall be used for demonstrating compliance with the 

PM Emission Rate imposed by this Consent Decree, 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. 

20 
VII. PROHIBITION ON NETTING CREDITS OR OFFSETS

38. Emission reductions that result from actions to be taken by Kentucky 

Utilities 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 NSR and PSD programs. 

39. The limitation on the generation and use of netting credits or offsets set 

forth in the previous Paragraph does not apply to emission reductions achieved by Brown 

Unit 3 that are greater than those required under this Consent Decree. For purposes of 

this Paragraph, emission reductions from Brown Unit 3 are greater than those required 

under this Consent Decree if they result from Kentucky Utilities’ compliance with 

federally enforceable emission rates or removal efficiencies that are more stringent than 

those limits imposed on Brown Unit 3 under this Consent Decree and under applicable 

provisions of the Clean Air Act and the Kentucky State Implementation Plan. 

40. Nothing in this Consent Decree is intended to preclude the emission

reductions generated under this Consent Decree from being considered by the 

Commonwealth of Kentucky 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 NAAQS, PSD increment, or air quality 

related values, including visibility, in a Class I area. 

VIII. ENVIRONMENTAL MITIGATION PROJECTS

41. Kentucky Utilities shall implement the Environmental Mitigation Projects 

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

approved plans and schedules for such Project and other terms of this Consent Decree.

21 
42. Kentucky Utilities shall submit plans for each of the Projects to EPA for 

review and approval pursuant to Section XII (Review and Approval of Submittals) of this 

Consent Decree in accordance with the schedules set forth in Appendix A to this Consent 

Decree. In implementing the Projects, Kentucky Utilities shall spend no less than 

$3,000,000. Kentucky Utilities shall maintain, and present to EPA upon request, all 

documents to substantiate the Project Dollars expended and shall provide these 

documents to EPA within thirty (30) days of a request by EPA for such documentation. 

43. All plans and reports prepared by Kentucky Utilities pursuant to the 

requirements of this Section of the Consent Decree and required to be submitted to EPA 

shall be publicly available from Kentucky Utilities without charge. 

44. Kentucky Utilities shall certify, as part of each plan submitted to EPA for 

any Project, that Kentucky Utilities is not otherwise required by law to perform the 

Project described in the plan, that Kentucky Utilities is unaware of any other person who 

is required by law to perform the Project, and that Kentucky Utilities will not use any

Project, or portion thereof, to satisfy any obligations that it may have under other 

applicable requirements of law. 

45. Kentucky Utilities shall use good faith efforts to secure as much 

environmental benefit as possible for the Project Dollars expended, consistent with the

applicable requirements and limits of this Consent Decree. 

46. If Kentucky Utilities 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 Kentucky Utilities, but not including Kentucky Utilities’ agents or 

contractors, that person or instrumentality must, in writing: (a) identify its legal authority

22 
for accepting such funding; and (b) identify its legal authority to conduct the Project for

which Kentucky Utilities contributes the funds. Regardless of whether Kentucky Utilities

elected (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, 

Kentucky Utilities acknowledges that it will receive credit for the expenditure of such 

funds only if Kentucky Utilities demonstrates that the funds have been actually spent by

either Kentucky Utilities or by the person or instrumentality receiving them, and that such 

expenditures met all requirements of this Consent Decree. 

47. Beginning six (6) months after entry of this Consent Decree, and 

continuing until completion of each Project (including any applicable periods of 

demonstration or testing), Kentucky Utilities shall provide EPA with semi-annual updates 

concerning the progress of each Project. 

48. Within sixty (60) days following the completion of each Project required

under this Consent Decree (including any applicable periods of demonstration or testing), 

Kentucky Utilities shall submit to EPA a report that documents the date that the Project 

was completed, Kentucky Utilities’ results of implementing the Project, including the 

emission reductions or other environmental benefits achieved, and the total Project 

Dollars expended by Kentucky Utilities in implementing the Project. 

IX. CIVIL PENALTY

49. Within thirty (30) calendar days after entry of this Consent Decree, 

Kentucky Utilities shall pay to the United States a civil penalty in the amount of 

$1,400,000. 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 No. 2007V00233, DOJ Case No. 90-5-1-1-07915, and the civil 

23 
action case name and case number of this action. The costs of such EFT shall be 

Kentucky Utilities’ responsibility. Payment shall be made in accordance with 

instructions provided to Kentucky Utilities by the Financial Litigation Unit of the U.S. 

Attorney’s Office for the Eastern District of Kentucky. Any funds received after 2:00 

p.m. EDT shall be credited on the next Business Day. At the time of payment, Kentucky 

Utilities shall provide notice of payment, referencing the USAO File Number, the DOJ 

Case Number, and the civil action case name and case number, to the Department of 

Justice and to EPA in accordance with Section XVIII (Notices) of this Consent Decree. 

50. Failure to timely pay the civil penalty shall subject Kentucky Utilities 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 Kentucky Utilities 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. 

51. 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 taxdeductible expenditures for purposes of federal law. 

X. RESOLUTION OF CERTAIN CIVIL CLAIMS OF THE UNITED STATES

52. Entry of this Decree shall resolve all civil claims of the United States 

against Kentucky Utilities that arose from any modifications commenced at Brown Unit 3 

prior to the Date of Lodging of this Consent Decree, including but not limited to those

modifications alleged in the United States’ Complaint in this civil action and in the 

Notices of Violation issued to Kentucky Utilities on April 25, 2006, and December 5, 

2006, under: 

24 
a. Sections 502(a) and 504(a) of Title V of the Clean Air Act, 42 

U.S.C §§ 7611(a) and 7611(c), but only to the extent that such 

claims are based on (i) Kentucky Utilities’ failure to obtain an

operating permit that reflects applicable requirements imposed 

under Parts C or D of Subchapter I, or Section 111 of the Clean Air

Act, and (ii) Kentucky Utilities’ operation of Brown Unit 3 at a 

heat input in excess of the value listed in the July 20, 1993 Brown 

Unit 3 Operating Permit No. O-86-068 (Revision 2) and its March 

1, 2005 Brown Power Plant Title V permit No. V-03-034; 

b. Parts C or D of Subchapter I of the Clean Air Act, 42 U.S.C. §§

7470-7492, 7501-7515, including any claims arising from deletion 

of enforceable heat input limits listed in the July 20, 1993 Brown 

Unit 3 Operating Permit No. O-86-068 (Revision 2) from

Kentucky Utilities’ March 1, 2005 Brown Power Plant Title V 

permit No. V-03-034;

c. Section 111 of the Clean Air Act, 42 U.S.C. § 7411, and 40 

C.F.R.§ 60.14; 

d. 401 KAR 51:017 and all relevant prior versions of these 

regulations, including any claims arising from deletion of 

enforceable heat input limits listed in the July 20, 1993 Brown Unit 

3 Operating Permit No. O-86-068 (Revision 2) from Kentucky 

Utilities’ March 1, 2005 Brown Power Plant Title V permit No. V03-034; and

25 
e. 401 KAR 52.020 and all relevant prior versions of these

regulations, but only to the extent that such claims are based on (i) 

Kentucky Utilities’ failure to obtain an operating permit that 

reflects applicable requirements imposed under Parts C or D of 

Subchapter I, or Section 111 of the Clean Air Act, and (ii) 

Kentucky Utilities’ operation of Brown Unit 3 at a heat input in

excess of the value listed in the July 20, 1993 Brown Unit 3 

Operating Permit No. O-86-068 (Revision 2) and its March 1, 2005 

Brown Power Plant Title V permit No. V-03-034.

XI. PERIODIC REPORTING

53. Compliance Report. After entry of this Decree, Kentucky Utilities shall 

submit to EPA a semi-annual 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 following: 

a. Information, including milestone dates, regarding the design and 

installation of the FGD and the SCR required under this Consent 

Decree, including any problems encountered or anticipated, 

together with implemented or proposed solutions; 

b. Any information indicating that the installation or commencement 

of operation of a pollution control device might be delayed, 

including the nature and cause of the delay, and any steps taken by 

Kentucky Utilities to mitigate such delay; 

c. Beginning with the first report filed after June 30, 2013, 

information to demonstrate compliance with the 30-Day Rolling 

26 
Average Emission Rate for NOx during the preceding six-month 

reporting period; 

d. Beginning with the first report filed after June 30, 2013, 

information identifying the amount of time, if any, during the 

preceding six-month reporting period in which the dispatch of

Brown Unit 3 requires operation of Brown Unit 3 at a load level 

that results in flue gas temperature so low that it becomes 

technically infeasible to Continuously Operate the SCR; 

e. Beginning with the first report filed after June 30, 2011, 

information to demonstrate compliance with the 30-Day Rolling 

Average Emission Rate for SO2 or 30-Day Rolling Average SO2

Removal Efficiency during the preceding six-month reporting

period; 

f. Beginning December 31, 2011, for each semi-annual report 

submitted after the end of a calendar year, information to 

demonstrate compliance with the Unit Annual SO2 Tonnage 

Limitation in Paragraph 22 during the preceding calendar year; 

g. For the first semi-annual report to be submitted under this Consent 

Decree, and continuing annually thereafter, demonstration of the 

surrender of all SO2 and NOx allowances required to be 

surrendered under this Consent Decree, as well as any 

supercompliant NOx allowances; 

27 
h. All data recorded by the PM CEMs in the common stack for 

Brown Units 1, 2 and 3 as required by Paragraph 36, including 

data, if any, from all periods of monitor malfunction, maintenance, 

or repair as provided in Paragraph 33; and 

i. All other information necessary to determine compliance with the

requirements of this Consent Decree. 

54. Deviations Report. In addition to the reports required by the previous 

Paragraph, if Kentucky Utilities violates or deviates from any provision of this Consent 

Decree, Kentucky Utilities shall submit to the United States a report on the violation or 

deviation within ten Business Days after Kentucky Utilities knew or should have known 

of the event. In the report, Kentucky Utilities shall explain the cause or causes of the 

violation or deviation and any measures taken or to be taken by Kentucky Utilities to cure 

the reported violation or deviation or to prevent such violation or deviations in the future. 

For PM emissions measured by PM CEMS, the requirements of this Paragraph shall be 

satisfied by compliance with the reporting requirements set forth in Paragraph 36. 

55. Each Kentucky Utilities report shall be signed by Kentucky Utilities’ 

Director, Environmental Affairs, or his or her equivalent or designee of at least the rank 

of Vice President, 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 

28 
submitting false, inaccurate, or incomplete information to 

the United States. 

56. If any allowances are surrendered to any third party pursuant to Section 

IV.C (Use and Surrender of NOx Allowances) or V.C (Use and Surrender of SO2

Allowances), the third party’s certification shall be signed by a managing officer of the 

third party, and shall contain the following language: 

I certify under penalty of law that _____________ [name

of 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

57. Kentucky Utilities shall submit to EPA each submission required to be

submitted by Kentucky Utilities for review or approval. EPA may approve the submittal 

or decline to approve it and provide written comments explaining the bases for declining 

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

Kentucky Utilities 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. 

58. Upon receipt of EPA’s final approval of the submittal, or upon completion 

of the submittal pursuant to dispute resolution, Kentucky Utilities shall implement the 

approved submittal in accordance with the schedule specified therein. 

29 
XIII. STIPULATED PENALTIES

59. For any failure by Kentucky Utilities to comply with the terms of this 

Consent Decree, and subject to the provisions of Sections XIV (Force Majeure) and XV 

(Dispute Resolution), Kentucky Utilities shall pay, within thirty (30) days after receipt of

written demand to Kentucky Utilities 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 X (Civil Penalty) of this Consent Decree

$10,000 per Day 

b. Failure to comply with any applicable 30-

Day Rolling Average Emission Rate for NOx, where the 

violation is less than 5% in excess of the limit set forth in 

this Consent Decree 

$2,500 per Day per violation 

c. Failure to comply with any applicable 30-

Day Rolling Average Emission Rate for NOx, where the 

violation is equal to or greater than 5% but less than 10% in 

excess of the limit set forth in this Consent Decree 

$5,000 per Day per violation 

d. Failure to comply with any applicable 30-

Day Rolling Average Emission Rate for NOx, where the 

violation is equal to or greater than 10% in excess of the 

limit set forth in this Consent Decree 

$10,000 per Day per violation 

e. Failure to comply with any applicable 30-

Day Rolling Average Removal Efficiency or 30-Day 

Rolling Average Emission Rate for SO2 where the violation 

is less than 5% in excess of the 30-Day Rolling Average 

Emission Rate for SO2 or is less than 5% below the 30-Day 

Rolling Average Removal Efficiency for SO2 in this 

Consent Decree 

$2,500 per Day per violation 

f. Failure to comply with any applicable 30-

30 
Consent Decree Violation Stipulated Penalty 

Day Rolling Average Removal Efficiency or 30-Day 

Rolling Average Emission Rate for SO2 where the violation 

is more than 5% but less than 10% in excess of the 30-Day 

Rolling Average Emission Rate for SO2 or is more than 5% 

but less than 10% below the 30-Day Rolling Average 

Removal Efficiency for SO2 in this Consent Decree 

$5,000 per Day per violation 

g. Failure to comply with any applicable 30-

Day Rolling Average Removal Efficiency or 30-Day 

Rolling Average Emission Rate for SO2 where the violation 

is greater than 10% in excess of the 30-Day Rolling 

Average Emission Rate for SO2 or is greater than 10% 

below the 30-Day Rolling Average Removal Efficiency for 

SO2 in this Consent Decree 

$10,000 per Day per violation 

 h. Failure to comply with the Unit-Specific 

Annual Tonnage Limitation for SO2 for Brown Unit 3 

The surrender of SO2 Allowances 

in an amount equal to four times 

the number of tons by which the 

limitation was exceeded

i. Failure to install, commence operation, or 

continue operation of the NOx or SO2 pollution control 

devices on any Unit as required under this Consent Decree 

$10,000 per Day per violation 

during the first 30 days; 

 $32,500 per Day per violation 

thereafter 

 j. Failure to install or operate CEMS as 

required in this Consent Decree 

$1,000 per Day per violation 

k. Failure to apply for any permit required by 

Section XVI (Permits) 

$1,000 per Day per violation 

l. 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 ten days, $1,000 per Day 

per violation thereafter 

m. Failure to surrender NOx Allowances as 

required by this Consent Decree

(a) $32,500 per Day plus (b) 

$1,000 per NOx Allowance not 

31 
Consent Decree Violation Stipulated Penalty 

surrendered, and $5,000 per NOx

Allowance for each NOx

Allowance used, sold, or 

transferred in violation of this 

Consent Decree 

n. Failure to surrender SO2 Allowances as 

required by this Consent Decree (a) $32,500 per Day plus (b) 

$1,000 per SO2 Allowance not 

surrendered, and $5,000 per SO2

Allowance for each SO2

Allowance used, sold, or 

transferred in violation of this 

Consent Decree 

o. Failure to demonstrate the third-party

surrender of a NOx Allowance or SO2 Allowance in 

accordance with this Consent Decree 

$2,500 per Day per violation 

p. Failure to undertake and complete an 

Environmental Mitigation Project in accordance with this 

Consent Decree 

$1,000 per Day per violation 

during the first 30 days, $5,000 

per Day per violation thereafter 

q. Any other violation of this Consent Decree $1,000 per Day per violation 

60. Violation of any limit based on a 30-Day Rolling Average constitutes 

thirty (30) days of violation, but where such a violation of the same pollutant recurs at 

Brown Unit 3 within a period of less than thirty (30) days, Kentucky Utilities 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. 

61. 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 

32 
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. 

62. Kentucky Utilities shall pay all stipulated penalties to the United States

within thirty (30) days of receipt of written demand to Kentucky Utilities from the United 

States, and shall continue to make such payments every thirty (30) days thereafter until 

the violation(s) no longer continues, unless Kentucky Utilities elects, within twenty days

of receipt of written demand for stipulated penalties 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. 

63. Stipulated penalties shall continue to accrue as provided in accordance 

with Paragraph 61 and this Paragraph 63 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 United 

States pursuant to Section XV (Dispute Resolution) of this Consent 

Decree that is not appealed to this Court, Kentucky Utilities shall 

pay all accrued stipulated penalties agreed or determined to be 

owing, together with accrued interest, within thirty (30) days of the

effective date of the agreement or of the receipt of the United

States’ decision; 

b. If the dispute is appealed to this Court, and the United States

prevails in whole or in part, Kentucky Utilities shall pay all 

33 
accrued stipulated penalties determined by this Court to be owing, 

together with interest accrued on such penalties determined by this 

Court to be owing, within sixty (60) days of receipt of the Court’s 

decision or order, except as provided in Subparagraph 63.c, below; 

c. If the Court’s decision is appealed by any Party, Kentucky Utilities 

shall pay all accrued stipulated penalties determined by the

appellate court to be owing, together with interest accrued on such 

stipulated penalties determined to be owing, within fifteen (15) 

days of receipt of the final appellate court decision. 

Notwithstanding any other provision of this Consent Decree, the accrued stipulated

penalties agreed by the United States and Kentucky Utilities, or determined by the United 

States through Dispute Resolution, to be owing may be less than the stipulated penalty 

amounts set forth in Paragraph 59.

64. All monetary stipulated penalties shall be paid in the manner set forth in 

Section IX (Civil Penalty) of this Consent Decree. All allowance surrender penalties

shall comply with the allowance surrender procedures set forth in this Consent Decree. 

65. Should Kentucky Utilities 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. 

66. 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 Kentucky Utilities’ 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 

34 
Decree provides for payment of a stipulated penalty, Kentucky Utilities shall be allowed 

a credit for stipulated penalties paid against any statutory penalties also imposed for such 

violation. 

XIV. FORCE MAJEURE

67. 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 

Kentucky Utilities, its contractors, or any entity controlled by Kentucky Utilities, that 

delays compliance with any provision of this Consent Decree or otherwise causes a 

violation of any provision of this Consent Decree, despite Kentucky Utilities’ best efforts 

to fulfill the obligation. “Best efforts to fulfill the obligation” include using 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. 

68. 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 Kentucky Utilities intends to assert a claim of Force 

Majeure, Kentucky Utilities shall notify the United States in writing as soon as 

practicable, but in no event later than twenty-one (21) Business Days following the date 

Kentucky Utilities 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, Kentucky Utilities 

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 Kentucky Utilities to prevent or minimize

the delay or violation, the schedule by which Kentucky Utilities proposes to implement

35 
those measures, and Kentucky Utilities’ rationale for attributing a delay or violation to a

Force Majeure Event. Kentucky Utilities shall adopt all reasonable measures to avoid or 

minimize such delays or violations. Kentucky Utilities shall be deemed to know of any 

circumstance which Kentucky Utilities, its contractors, or any entity controlled by 

Kentucky Utilities knew or should have known. 

69. Failure to Give Notice. If Kentucky Utilities fails to comply with the 

notice requirements of this Section, the United States may void Kentucky Utilities’ claim 

for Force Majeure as to the specific event for which Kentucky Utilities has failed to

comply with such notice requirement. 

70. United States’ Response. EPA shall notify Kentucky Utilities in writing 

regarding Kentucky Utilities’ claim of Force Majeure within twenty Business Days of

receipt of the notice provided under Paragraph 68. If the United States agrees that a 

delay in performance has been or will be caused by a Force Majeure Event, then the 

United States and Kentucky Utilities 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, the Parties shall make an 

appropriate modification of the deadline(s) pursuant to Section XXII (Modification) of 

this Consent Decree. 

71. Disagreement. If the United States does not accept Kentucky Utilities’

claim of Force Majeure, or if EPA and Kentucky Utilities 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.

36 
72. Burden of Proof. In any dispute regarding Force Majeure, Kentucky 

Utilities shall bear the burden of proving that any delay in performance or any other

violation of any requirement of this Consent Decree was caused by or will be caused by a 

Force Majeure Event. Kentucky Utilities shall also bear the burden of proving that 

Kentucky Utilities gave the notice required by this Section and the burden of proving the

anticipated duration and extent of any delay 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. 

73. Events Excluded. Unanticipated or increased costs or expenses associated 

with the performance of Kentucky Utilities’ obligations under this Consent Decree shall 

not constitute a Force Majeure Event. 

74. Potential Force Majeure Events. The Parties agree that, depending upon 

the circumstances related to an event and Kentucky Utilities’ 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; 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 requires Kentucky Utilities to supply electricity in response to a 

state-wide or regional emergency. Depending upon the circumstances and Kentucky 

Utilities’ 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 to act is beyond the control of Kentucky Utilities and 

37 
Kentucky Utilities 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.

75. As part of the resolution of any matter submitted to this Court under 

Section XV (Dispute Resolution) of this Consent Decree regarding a claim of Force 

Majeure, the United States and Kentucky Utilities 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 and the States or approved by the Court. 

Kentucky Utilities shall be liable for stipulated penalties for its failure thereafter to 

complete the work in accordance with the extended or modified schedule (provided that 

Kentucky Utilities shall not be precluded from making a further claim of Force Majeure 

with regard to meeting any such extended or modified schedule). 

76. Malfunction Events. If Kentucky Utilities proposes to exclude emissions 

during a period of Malfunction from the calculation of any 30-Day Rolling Average 

Emission Rate or 30-Day Rolling Average SO Removal Efficiency, Kentucky Utilities 

shall notify the United States in writing as soon as practicable, but in no event later than 

twenty-one (21) days following the date the Malfunction occurs. In this notice, Kentucky 

Utilities shall describe the anticipated length of time that the Malfunction may persist, the 

cause or causes of the Malfunction, all measures taken or to be taken by Kentucky 

Utilities to minimize the duration of the Malfunction, and the schedule by which

2

38 
Kentucky Utilities proposes to implement those measures. Kentucky Utilities shall adopt 

all reasonable measures to minimize the duration of such Malfunctions, and to prevent 

the recurrence of such Malfunctions in the future.

77. Kentucky Utilities may exclude NOx and SO emissions data during a 

period of Malfunction, after approval from EPA pursuant to Paragraph 78, from 

calculation of the 30-Day Rolling Average Emission Rate for NO or SO or the 30-Day 

Rolling Average Removal Efficiency for SO , only if, in the notice required pursuant to 

Paragraph 76, Kentucky Utilities demonstrates that:

2

x 2

2

a. The Malfunction did not result from the failure of Kentucky Utilities to 

properly operate and maintain the equipment that experienced the Malfunction; 

b. Kentucky Utilities took all reasonable steps to correct, as expeditiously as 

practicable, the condition causing the emissions to exceed the 30-Day Rolling Average 

Emission Rate for NOx or SO2 or 30-Day Rolling Average Removal Efficiency for SO2; 

c. Kentucky Utilities took all reasonable steps to minimize emissions and their 

effect on air quality resulting from the Malfunction; 

d. The excess emissions are not part of a recurring pattern indicative of

inadequate design, operation, or maintenance; and 

e. The Malfunction was not caused entirely or in part by poor maintenance, 

careless operation, or any other preventable upset conditions or equipment breakdown. 

78. EPA shall notify Kentucky Utilities of its determination of whether 

emissions during the period of Malfunction may be excluded from calculation of the 30-

Day Rolling Average Emission Rate for NOx or SO2 or the 30-Day Rolling Average 

39 
Removal Efficiency for SO2 as soon as practicable, but no later than sixty (60) days after 

the date that all information required by Paragraphs 76 and 77 has been submitted. 

79. A Malfunction does not constitute a Force Majeure Event unless the 

Malfunction also meets the definition of a Force Majeure Event, as provided in this 

Section. Conversely, a period of Malfunction may be excluded by Kentucky Utilities 

from the calculations of emission rates and removal efficiencies, as allowed under this 

Paragraph, regardless of whether the Malfunction constitutes a Force Majeure Event.

XV. DISPUTE RESOLUTION

80. 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. 

81. The dispute resolution procedure required herein shall be invoked by one 

Party giving written notice to the other Party 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 twenty (20) Business Days 

following receipt of such notice. 

82. Disputes submitted to dispute resolution under this Section shall, in the 

first instance, be the subject of informal negotiations among the disputing Parties. Such 

period of informal negotiations shall not extend beyond thirty (30) Days from the date of 

the first meeting among the disputing Parties’ representatives unless they agree in writing 

to shorten or extend this period. During the informal negotiations period, the disputing 

40 
Parties may also submit their dispute to a mutually agreed upon alternative dispute 

resolution (“ADR”) forum if the Parties agree that the ADR activities can be completed 

within the thirty (30) Day informal negotiations period (or such longer period as the 

Parties may agree to in writing). 

83. If the disputing Parties are unable to reach agreement during the informal 

negotiation period, the United States shall provide Kentucky Utilities 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) Days thereafter, 

Kentucky Utilities seeks judicial resolution of the dispute by filing a petition with the 

Court. The United States may respond to the petition within forty-five (45) Days of 

filing. 

84. 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 such a scheduling modification. 

85. The Court shall not draw any inferences nor establish any presumptions 

adverse to any disputing Party as a result of invocation of this Section or the disputing 

Parties’ inability to reach agreement. 

86. As part of the resolution of any dispute under this Section, in appropriate 

circumstances the disputing Parties may agree, or the 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. 

Kentucky Utilities shall be liable for stipulated penalties for its failure thereafter to 

complete the work in accordance with the extended or modified schedule, provided that 

41 
Kentucky Utilities 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. 

87. The Court shall decide all disputes pursuant to applicable principles of

law for resolving such disputes. In their initial filings with the Court, the disputing 

Parties shall state their respective positions as to the applicable standard of law for 

resolving the particular dispute. 

XVI. PERMITS

88. Unless expressly stated otherwise in this Consent Decree, in any instance

where otherwise applicable law or this Consent Decree requires Kentucky Utilities to 

secure a permit to authorize construction or operation of any device contemplated herein, 

including all preconstruction, construction, and operating permits required under state 

law, Kentucky Utilities shall make such application in a timely manner. Kentucky 

Utilities shall provide Notice to the United States under Section XVIII (Notices), that 

Kentucky Utilities has submitted an application for Brown Unit 3 for any permit 

described in this Paragraph. 

89. Notwithstanding the previous Paragraph, nothing in this Consent Decree 

shall be construed to require Kentucky Utilities to apply for or obtain a PSD or

Nonattainment NSR permit for physical changes in, or changes in the method of 

operation of Kentucky Utilities that would give rise to claims resolved by Section X,

Paragraph 52 (Resolution of Certain Civil Claims of the United States) of this Consent 

Decree. 

90. When permits are required as described in this Section, Kentucky Utilities 

shall complete and submit applications for such permits to the appropriate authorities to

allow time for all legally required processing and review of the permit request, including 

42 
requests for additional information by the permitting authorities. Any failure by 

Kentucky Utilities to submit a timely permit application for Brown Unit 3 shall bar any 

use by Kentucky Utilities of Section XIV (Force Majeure) of this Consent Decree, where

a Force Majeure claim is based on permitting delays. 

91. Notwithstanding the reference to Title V permits in this Consent Decree, 

the enforcement of such permits shall be in accordance with their own terms and the Act. 

The Title V permits 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 Decree) of this Consent Decree. 

92. Within one hundred eighty (180) days after entry of this Consent Decree, 

or at the time that Kentucky Utilities submits its Brown Plant Title V permit application 

to renew the existing Title V permit that will expire on March 1, 2010, whichever is later, 

Kentucky Utilities shall apply to permanently include a federally-enforceable numerical 

hourly heat input rate limitation for Brown Unit 3 of no greater than 5300 MMBtu/hr in 

the Brown Plant Title V permit, such that the hourly heat input rate limitation becomes

and remains an “applicable requirement” as that term is defined in 40 C.F.R. § 70.2. 

Kentucky Utilities shall state in its application that it shall measure compliance with the 

heat input limitation by calculating hourly heat input rates using hourly mass coal burned 

data and weekly composite fuel sampling analysis data collected for Brown Unit 3. EPA 

will use best efforts to expeditiously review such application submitted by Kentucky 

Utilities and will not object to amendment or renewal of Kentucky Utilities’ Title V 

43 
permit based on that application to include, in accordance with this Paragraph, that heat 

input rate as the federally enforceable heat input limit for Brown Unit 3. 

93. Within one-hundred eighty (180) days after entry of this Consent Decree, 

or at the time that Kentucky Utilities submits its Brown Plant Title V permit application 

to renew the existing Title V permit that will expire on March 1, 2010, whichever is later, 

Kentucky Utilities 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 including, but not limited to, required emission rates, 

removal efficiencies, the Unit Annual Tonnage Limitations for SO2 and NOx, and the 

requirements pertaining to the use and surrender of NOx Allowances. 

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

pollution control device to be installed on the Unit under this Consent Decree, Kentucky

Utilities shall apply to permanently include the requirements and limitations enumerated 

in this Consent Decree into a federally-enforceable permit, such that the requirements and 

limitations become and remain “applicable requirements” as that term is defined in 40 

C.F.R. § 70.2. The permit shall require compliance with the following: (a) any applicable 

30-Day Rolling Average Emission Rate; (b) any applicable 30-Day Rolling Average SO2

Removal Efficiency; (c) the Unit Annual SO2 Tonnage Limitation set forth in Paragraph 

22 of this Consent Decree; and (d) the NOx Allowance restrictions set forth in this

Consent Decree. 

95. Kentucky Utilities shall provide EPA with a copy of each application to 

amend its Title V permit for Brown Unit 3, as well as a copy of any permit proposed as a 

44 
result of such application, to allow for timely participation in any public comment

opportunity. 

96. If Kentucky Utilities sells or transfers to an entity unrelated to Kentucky 

Utilities (“Third Party Purchaser”) part or all of its Ownership Interest in the Brown 

Plant, Kentucky Utilities shall comply with the requirements of Section XIX (Sales or 

Transfers of Ownership Interests) with regard to that Unit prior to any such sale or

transfer unless, following any such sale or transfer, Kentucky Utilities remains the holder

of the Title V permit for such facility. 

XVII. INFORMATION COLLECTION AND RETENTION

97. Any authorized representative of the United States, including their 

attorneys, contractors, and consultants, upon presentation of credentials, shall have a right 

of entry upon the premises of the Brown Power Plant 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 Kentucky Utilities or its representatives, contractors, or 

consultants; and 

d. assessing Kentucky Utilities’ compliance with this Consent 

Decree. 

98. Kentucky Utilities shall retain, and instruct its contractors and agents to 

preserve, all non-identical copies of all records and documents (including records and 

45 
documents in electronic form) now in its or its contractors’ or agents’ possession or 

control, and that directly relate to Kentucky Utilities’ performance of its obligations 

under this Consent Decree until December 31, 2017. This record retention requirement 

shall apply regardless of any corporate document retention policy to the contrary. 

99. All information and documents submitted by Kentucky Utilities 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) Kentucky Utilities claims and substantiates in 

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

business information. 

100. Nothing in this Consent Decree shall limit the authority of the EPA to 

conduct tests and inspections at Kentucky Utilities’ facilities under Section 114 of the 

Act, 42 U.S.C. § 7414, or any other applicable federal or state laws, regulations or 

permits. 

XVIII. NOTICES

101. 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, D.C. 20044-7611 

46 
DJ# 90-5-2-1-06837 

and 

Director, Air Enforcement Division

Office of Enforcement and Compliance Assurance 

U.S. Environmental Protection Agency 

Ariel Rios Building [2242A] 

1200 Pennsylvania Avenue, N.W. 

Washington, DC 20460 

and 

Director

Air, Pesticides and Toxics Management Division 

U.S. EPA- Region 4 

Sam Nunn Atlanta Federal Center 

61 Forsyth Street, SW

Atlanta, GA 30303-8960 

As to Kentucky Utilities: 

General Counsel 

E.ON U.S. LLC 

220 West Main Street 

Louisville, KY 40202 

William Bumpers 

Baker Botts LLP 

The Warner 

1299 Pennsylvania Avenue, N.W. 

Washington, DC 20004 

102. All notifications, communications or submissions made pursuant to this 

Section shall be sent either by: (a) overnight mail or overnight delivery service, 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.

47 
103. Any Party may change either the notice recipient or the address for 

providing notices to it by serving all other Parties with a notice setting forth such new 

notice recipient or address. 

XIX. SALES OR TRANSFERS OF OWNERSHIP INTERESTS

104. If Kentucky Utilities proposes to sell or transfer an Ownership Interest to a 

Third Party Purchaser, Kentucky Utilities 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. 

105. 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, jointly and severally liable with 

Kentucky Utilities for all the requirements of this Decree that may be applicable to the 

transferred or purchased Ownership Interest. 

106. This Consent Decree shall not be construed to impede the transfer of any 

Ownership Interest between Kentucky Utilities 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 Kentucky Utilities and any 

Third Party Purchaser of Ownership Interests – of the burdens of compliance with this

Decree, provided that both Kentucky Utilities and such Third Party Purchaser shall 

remain jointly and severally liable to the United States for the obligations of the Decree

applicable to the transferred or purchased Ownership Interest. 

48 
107. If the United States agrees, then the United States, Kentucky Utilities, and 

the Third Party Purchaser that has become a party to this Consent Decree pursuant to 

Paragraph 105, may execute a modification that relieves Kentucky Utilities 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 Interest. 

Notwithstanding the foregoing, however, Kentucky Utilities 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 Interest, including the obligations set forth in 

Sections VIII (Environmental Mitigation Projects) and IX (Civil Penalty). Kentucky 

Utilities 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 Interest, to the 

extent such obligations may be adequately separated in an enforceable manner. 

XX. EFFECTIVE DATE

108. 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

109. 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, any 

Party to this Consent Decree may apply to the Court for any relief necessary to construe 

or effectuate this Consent Decree. 

XXII. MODIFICATION

49 
110. The terms of this Consent Decree may be modified only by a subsequent 

written agreement signed by the United States and Kentucky Utilities. Where the

modification constitutes a material change to any term of this Decree, it shall be effective 

only upon approval by the Court. 

XXIII. GENERAL PROVISIONS

111. 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 set forth herein do not relieve Kentucky Utilities 

from any obligation to comply with other state and federal requirements under the Clean 

Air Act, including Kentucky Utilities’ obligation to satisfy any state modeling 

requirements set forth in the Kentucky State Implementation Plan. 

112. This Consent Decree does not apply to any claims of criminal liability. 

113. In any subsequent administrative or judicial action initiated by the United 

States for injunctive relief or civil penalties relating to the facilities covered by this

Consent Decree, Kentucky Utilities 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 (Resolution of Certain Civil Claims of the United

States). 

114. Nothing in this Consent Decree shall relieve Kentucky Utilities of its 

obligation to comply with all applicable federal, state, and local laws and regulations. 

Subject to the provisions in Section X (Resolution of Certain Civil Claims of the United

50 
States), 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. 

115. 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. 

116. Each limit and/or other requirement established by or under this Decree is 

a separate, independent requirement. 

117. 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. Kentucky Utilities 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. Kentucky Utilities shall report data to the 

number of significant digits in which the standard or limit is expressed. 

118. This Consent Decree does not limit, enlarge or affect the rights of any 

Party to this Consent Decree as against any third parties. 

51 
119. This Consent Decree constitutes the final, complete and exclusive 

agreement and understanding among the Parties with respect to the settlement embodied 

in this Consent Decree, and supersedes all prior agreements and understandings among 

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

inducement, agreement, understanding, or promise constitutes any part of this Decree or 

the settlement it represents, nor shall they be used in construing the terms of this Consent 

Decree. 

120. Each Party to this action shall bear its own costs and attorneys' fees. 

XXIV. SIGNATORIES AND SERVICE

121. 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. 

122. This Consent Decree may be signed in counterparts, and such counterpart 

signature pages shall be given full force and effect. 

123. Each Party hereby agrees to accept service of process by mail with respect 

to all matters arising under or relating to 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

124. The 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 the 

52 
Consent Decree is inappropriate, improper or inadequate. Kentucky Utilities 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 Kentucky Utilities, in writing, that 

the United States no longer supports entry of the Consent Decree. 

XXVI. CONDITIONAL TERMINATION UNDER DECREE

125. Termination as to Completed Tasks. As soon as Kentucky Utilities 

completes a construction project or any other requirement of this Consent Decree that is 

not ongoing or recurring, Kentucky Utilities may, by motion to this Court, seek

termination of the provision or provisions of this Consent Decree that imposed the 

requirement. 

126. Conditional Termination of Enforcement Through the Consent Decree. 

After Kentucky Utilities: 

a. has successfully completed construction, and has maintained 

operation, of all pollution controls as required by this Consent Decree for at least two (2) 

years; and 

b. has obtained a final Title V permit (i) as required by the terms of 

this Consent Decree; (ii) that covers Brown Unit 3; and (iii) that include as applicable 

requirements all of the requirements specified in Paragraphs 92 and 94 of this Consent 

Decree; 

then Kentucky Utilities 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 Kentucky Utilities’ certification, then, for any Consent Decree 

violations that occur after the filing of notice, any enforcement action taken by the United 

States to resolve those violations shall seek to enforce the requirements contained in the

53 
Title V permit through the applicable Title V permit and/or other enforcement authority

and not through this Consent Decree. 

127. Resort to Enforcement under this Consent Decree. Notwithstanding the 

preceding Paragraph, if enforcement of a provision in this Decree cannot be pursued by 

the United States under the applicable Title V permit, or if a Decree requirement 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 by the United States under the terms of this 

Decree at any time. 

XXVII. FINAL JUDGMENT

128. Upon approval and entry of this Consent Decree by the Court, this 

Consent Decree shall constitute a final judgment between the United States and Kentucky

Utilities. 

SO ORDERED, THIS _____ DAY OF ________________, 2009. 

________________________________________ 

 THE HONORABLE KARL S. FORESTER 

 UNITED STATES DISTRICT JUDGE 

54 
Signature Page for Consent Decree in: 

United States of America

v. 

 Kentucky Utilities Company, No. 5:07-CV-0075-KSF (E.D. Ky.) 

FOR THE UNITED STATES OF

AMERICA: 

_________________________ 

JOHN C. CRUDEN 

Deputy Assistant Attorney General 

Environment and Natural Resources 

Division 

United States Department of Justice 

_________________________ 

W. BENJAMIN FISHEROW 

Deputy Section Chief 

ANDREW C. HANSON 

Trial Attorney 

Environmental Enforcement Section 

Environment and Natural Resources 

Division 

United States Department of Justice 

55 
Signature Page for Consent Decree in: 

United States of America

v. 

 Kentucky Utilities Company, No. 5:07-CV-0075-KSF (E.D. Ky.) 

_________________________ 

LEE GENTRY 

Assistant United States Attorney 

Eastern District of Kentucky 

United States Department of Justice 

56 
Signature Page for Consent Decree in: 

United States of America

v. 

Kentucky Utilities Company, No. 5:07-CV-0075-KSF (E.D. Ky.) 

_________________________ 

CATHERINE R. McCABE 

Acting Assistant Administrator 

Office of Enforcement and Compliance Assurance 

United States Environmental Protection Agency 

_________________________ 

MATTHEW M. MORRISON 

Acting Director, Air Enforcement Division 

Office of Enforcement and Compliance Assurance 

United States Environmental Protection Agency 
Signature Page for Consent Decree in: 

United States of America

v. 

Kentucky Utilities Company, No. 5:07-CV-0075-KSF (E.D. Ky.) 

_________________________ 

MARY WILKES, Regional Counsel 

U.S. Environmental Protection Agency 

Region 4 

61 Forsyth St., S.W.

Atlanta, GA 30303 

_________________________ 

JENNIFER LEWIS, Associate Regional Counsel 

U.S. Environmental Protection Agency 

Region 4 

61 Forsyth Street, S.W. 

Atlanta, GA 30303 
Signature Page for Consent Decree in: 

United States of America 

v. 

Kentucky Utilities Company, No. 5:07-CV-0075-KSF 

FOR DEFENDANT 

KENTUCKY UTILITIES COMPANY: 

By:

Name: Ralph Bowling 

Title: Vice President, Power Production 

 E.ON U.S. LLC