BEFORETHE NEBRASKA DEPARTMENT OF ENVIRONMENTAL QUALITY IN THE CASE OF NEBRASKA PUBLIC POWERDISTRICT, SHELDON STATION, Respondent. ) ) ) ) ) I. INTRODUCTION CaseNo. 3336 CONSENT ORDER

1. The Nebraska Department of Environmental Quality ("NDEQ") and Respondent Nebraska Public Power District ("NPPD") Sheldon Station, Facility# 33563, voluntarily enter into this Consent Order. This Consent Order establishes a schedule for changes to NPPD's Sheldon Station facility necessary to attain compliance with the 2010 National Ambient Air Quality Standard ("NAAQS") for one-hour sulfur dioxide ("one-hour S02") promulgated by the Environmental Protection Agency ("EPA") pursuant to 42 U.S.C. §7409. II. JURISDICTION 2. The NDEQ is the agency ofthe State ofNebraskacharged with the dutypursuantto Neb. Rev. Stat. § 81-1504(1) (Reissue 2014) of exercising exclusive general supervision, administration and enforcement of the Nebraska Environmental Protection Act. This Consent Order is issued under the authority vested in the Director ofthe NDEQ by Neb. Rev. Stats. §81-1504(25) and §81-1507(1). 3. NPPD agrees to undetiake all actions required by the terms and conditions of this Consent Order. NPPD a!:,:rrees that it will not contest the basis or validity ofthis Consent Orderin anyproceedings bythe NDEQ to enforcethis Consent Order. 4. NPPD waives its rights to receipt ofa complaint and all notice and hearing requirements provided in Neb. Rev. Stat. § 81-1507.III. PARTIES 5. This Consent Order is bindingon the NDEQ and NPPD and their successors and assigns. 6. NPPD shall ensure that any contractors, sub-contractors and representatives implementing any provision ofthis Consent Order receive a copy ofthis Consent Order. NPPD shallberesponsible for its noncompliance with this Consent Order. 7. NPPD admits to the jurisdictional allegations and agrees not to contest, but does not admit to, the findings offact and conclusions oflaw referenced within SectionVherein. IV. LIABILITY 8. Nothing in this Consent Order shall be construed as an admission of liability or acknowledgementofanyliability, wrong doingorunlawful conductbyNPPD

. V. FINDINGS OFFACT AND CONCLUSIONS OFLAW Clean Air Act 9. The federal Clean Air Act ("CAA'') requires EPA to publish regulations prescribing a NAAQS for specifiedpollutants. 42 U.S.C. §7409(a). One-Hour

### S02 Status 10. EPA revised the NAAQS for S02onJune 22, 2010. 75 Fed. Reg. 35520 (June 22, 2010). 11. States were directed to submittheirdesignations byJune 2, 2011. 75 Fed. Reg. at 35585. 12. Nebraska Governor Dave Heineman submitted Nebraska's designation recommendation for the 1-hour Sulfur Dioxide (SOz) NAAQS on June 1, 2011. Governor Heineman recommended an unclassifiable designation for the entire stateofNebraska. 13. EPA did not initiallypromulgate adesignation for any areas in Nebraska.

214. Pursuant to Neb. Rev. Stat. 81-1505(1) and (12), the Nebraska Environmental Quality Council adopted the revised NAAQS for S02 in Title 129, Nebraska Air Quality Regulations, Chapter4, Section 002, effectiveDecember9, 2013.
15. On May 13, 2014, EPA proposed the Data Requirements Rule for the 1-Hour Sulfur Dioxide (S02 ) Primary National Ambient Air Quality Standard (NAAQS) ("Data Requirements Rule"). 79 Fed. Reg. 27446 (May 13, 2014). The Data Requirements Rule containedtimeframes and processes forpromulgation ofdesignations. 16. EPA released a Memo ("Memo") which contains interim deadlines for states to provide updated recommendations and supporting information to assist EPA in its designations. Memo from Stephen D. Page to Regional Air Division Directors, Regions 1-10, Updated Guidance for Area Designations for the 2010 Primary Sulfur Dioxide National Ambient AirQuality Standard (March 20, 2015). 17. Due to the abbreviated timeframes allowed for designations under the EPA Memo, areas that do not currently have S02 monitors installed must base their designations on air quality modeling conducted pursuant to a draft protocol, S02 NAAQS Designations Modeling Technical Assistance Document issued by EPA in March 2011 and supplemented in December2013 ("ModelingTAD"). Sheldon Station 18. NPPD's Sheldon Station is a coal-fired electric generating unit ("EGU") located near Hallam, Nebraska. Sheldon Station has two units with a combined generation capacity of approximately225 megawatts. 19. Sheldon Station is a major source of air emissions under the Title V program and currently holds a Class I Operating Pennit issued by Lincoln-Lancaster County Health

3Department (LLCHD). Sheldon Station emits or may emit air pollutants including but not limited to S02. 20. NPPD's Sheldon Station is one of the specified sources for which EPA requires promulgation ofa designation byJuly 2, 2016. 21. NPPD intends to conduct airmodelingpursuant to the ModelingTAD. NDEQ Authority 22. Neb. Rev. Stat. 81-1506(2)(b) makes it unlawful to emit air pollutants that cause or contribute to a violation of an air quality standard established by the Nebraska Environmental Quality Council. 23. The DirectorofNDEQ is authorizedpursuantto Neb. Rev. Stat. §81-1504(7) to issue this Consent Order requiring changes at NPPD's Sheldon Station to attain the NAAQS for one-hour S02 bythedates set forth inParagraph 26. 24. This Consent Order sets out a schedule for NPPD to make changes to its Sheldon Station units to meetthe NAAQS. 25. This Consent Order shall have the force and effect ofa final order ofthe Director ofthe NDEQ issuedpursuant to theNebraskaEnvironmental ProtectionAct. VI. COMPLIANCE ORDER 26. NPPD agrees to attain compliance with the 2010 one-hour S02 NAAQS by performing the following activities at Sheldon Station:

a. Sheldon Station Unit 1: NPPD agrees to sufficiently extend the stack height to the extent necessary to model attainment with the 2010 one-hour S02 NAAQS based on actual hourly emission rates while burning fuel underthe existing pennit, such project to be completed byJuly 2, 2016, subject to Section VIII. b. Sheldon Station Unit 2: NPPD retains an option to switch coal fuel for Unit 2 to hydrogen and other gaseous fuel. In such case, NPPD shall exercise said option

4by informing NDEQ in writing by July 1, 2016, of its decision and will also present infonnation that it entered into binding and enforceable contracts to construct the necessary changes to Unit 2 to accommodate the switch to hydrogen and other gaseous fuel, which fuel switch will be completed on or before December31, 2021, subjectto Section VIII. In the eventNPPD elects not to exercise the above option, NPPD shall inform the NDEQ on or before July 1, 2016, that NPPD will sufficiently extend the stack height to the extent necessary to model attainment with the 2010 one-hour S02 NAAQS based on actual hourly emissions rates while burning fuel under the existingpermit. Such project will be completed on orbefore July 2, 2017, subject to SectionVIII. 27. NPPD shall submit a report by July 1, 2016, describing the then current status ofits performance ofactivities underParagraph26, above. 28. In consideration ofthis Order, NDEQ shall provide a copy ofthis Consent Order to the Environmental Protection Agency and request that the area around Sheldon Station remain "unclassifiable" for one hour S02 NAAQS while and until this Order has been completelyand satisfactorilyperformedbyNPPD. 29. NPPD shall conduct base-case modeling scenario in accordance with EPA's Modeling TAD associated with the Data Requirements Rule after completion of the project to

ensure compliance with the standards. Based on the NDEQ's guidance and protocol approval specifically for the Sheldon S02 modeling, NPPD will run the AERMOD model and prepare a summary ofresults, along with spreadsheets and figures that convey the concentrations predicted by the model, and add the maximum 1-hour design concentration (maximum 99th percentile average over 3 years of meteorology, of any receptor) to the background concentration of9 fJg/m3 agreed upon by NDEQ and EPA Region 7.

530. All terms and references used in this Consent Order shall have the same meaning as in NPPD's current Construction and Operating Permits. No othertetms or conditions ofthe Permits are affected by this Consent Order. 31. Information requiredto be submitted underthis Consent Order shall be sent to: ForNPPD: Joseph

### L. Citta P.O. Box 499 1414 15111 Street Columbus, NE 68602 (402) 563-5355 jlcitta@nppd.com ForNDEQ: Air QualityDivision Nebraska Department ofEnviromnental Quality PO Box 98922 Lincoln, NE 68509-8922 (402)471-4210 

### VII. COMPLIANCEWITH OTHERLAWS 32. NPPD shall perform all actions required by this Consent Order in accordance with all applicable local, state and federal laws, regulations and permits.



### VIII. FORCEMAJEURE,EXCUSABLE DELAY 33. Force majeure for purposes of this Consent Order is as set forth in NPPD's various contracts related to any NPPD activity described in paragraph 26, above. In addition, NPPD shall be excused from any delays in its perfonnance hereunder, or failure to perform, caused in whole or in part by any act ofGod, the order ofany court or agency havingjurisdiction, or caused in whole orin pmi by any ofNPPD's contractors, suppliers

or vendors. NPPD shall exercise best eff01is to anticipate any potential force majeure

6events and address the potential effects as the event is occurring, and following the event, to ensurethat anydelay is minimized to the greatest extentpracticable

.. 34. Ifany event occurs that may delay the perfonnance ofany obligation under this Consent Order, whetherornot caused by a force majeure event, NPPD shall notify the NDEQ by telephone within three business days oflearning ofthe event. Within 10 business days of learning of the event, NPPD shall provide in writing the reasons for the delay, the anticipated duration ofthe delay, all actions taken or to be taken to prevent or minimize thedelay, and a schedulefor implementation ofany action. 35. In addition to force majeure, NDEQ, in its discretion, may agree to an extension ofthe time for performance of any obligation under this Consent Order caused by any other event. IX. RESERVATION OFRIGHTS 36. Nothing in this Consent Order shall be construed to limit the power and authority ofthe NDEQ to take or order any action necessary to protect public health, welfare or the environment, or to enforce any provision ofthe Nebraska Environmental Protection Act and any rules, regulations, orders or permits issued pursuant to the Nebraska Environmental Protection Act. X. NEGATION OFAGENCY RELATIONSHIP 37. Nothing contained in this Consent Order shall be construed to create, either expressly or byimplication, therelationship ofagencybetween the NDEQ and NPPD. XI. REOPENING, AMENDING AND MODIFYING 38. This Consent Ordermaybemodified and amended in writingbymutual agreement ofthe NDEQ and NPPD.

7XII. EFFECTIVE DATE 39. This Consent Order shall become effective on the date it is signed by the Director ofthe NDEQ orhis designee. XIII. SEVERABILITY 40. Ifanyprovision or authority ofthis Order orthe application ofthis Order to any partyor circumstances is held by any judicial or administrative authority to be invalid, the application ofsuch provisions to otherparties or circumstances and the remainder ofthe Order shall remainin force and shall notbe affected thereby. XIV. SIGNATURES For NPPD: The undersigned representative ofNPPD certifies that he is fully authorized to enterinto theterms and conditions ofthis Consent OrderandbindNPPD.

By: Thomas J. Kent Title: Vice President & ChiefOperating Officer Date: September 18, 2015

8Environmental Quality

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