____________________________________ IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF INDIANA

) UNITED STATES OF AMERICA, ) ) and ) ) THE STATE OF INDIANA, ) ) Plaintiffs ) ) v. ) Civil Action No. ____________ ) NORTHERN INDIANA PUBLIC ) SERVICE CO., ) ) Defendant. )

____________________________________ )

CONSENT DECREETABLE OF CONTENTS I. Jurisdiction and Venue.................................................................................................... .....3 II. Applicability ............................................................................................................ ............4 III. Definitions.............................................................................................................. ..............5 IV. NO X Emission Reductions and Controls ...........................................................................16 A. NO X Emission Controls .........................................................................................16 B. General NO x Provisions.........................................................................................19 C. Annual System Tonnage Limitation for NOx ........................................................19 D. Use and Surrender of NO x Allowances .................................................................21 V. SO 2 Emission Reductions and Controls .............................................................................25 A. SO 2 Emission Controls ..........................................................................................25 B. General SO 2 Provisions ....................................................................................... .29 C. Annual System Tonnage Limitation for SO 2 ....................................................... .29 D. Use and Surrender of SO 2 Allowances ..................................................................30 VI. PM Emission Reductions and Controls .............................................................................33 A. Optimization of PM Emission Controls .................................................................33 B. PM Emissions ........................................................................................................35 C. PM Emissions Testing ...........................................................................................35 D. General PM Provision ............................................................................................36 VII. Unit Retirement.......................................................................................................... ........36 VIII. Prohibition on Netting Credits orOffsets from Required Controls...................................37 IX. PM and Mercury Continuous Emi ssions Monitoring Systems (CEMS) ...........................38 X. Environmental Miti gation Projects ....................................................................................41 XI. Civil Penalty.......................................................................................................................43 XII. Resolution of Past and Future Claims................................................................................45 A. Resolution of Plai ntiffs’ Civil Claims....................................................................45 B. Pursuit of Plaintiffs’ Civil Claims Otherwise Resolved ........................................47

iXIII. Periodic Reporting ..................................................................................................... ........50 XIV. Review and Approval of Submittals..................................................................................53 XV. Stipulated Penalties ..................................................................................................... .......53 XVI. Force Majeure ........................................................................................................... .........61 XVII. Affirmative Defenses ................................................................................................... .....65 XVIII. Dispute Resolution.................................................................................................... .........69 XIX. Permits and SIP Revisions ............................................................................................... ..71 XX. Information Collection and Retention ...............................................................................74 XXI. Notices ...............................................................................................................................75 XXII. Sales or Transfers of Ownership Interests .........................................................................77 XXIII. Effective Date ....................................................................................................................79 XXIV. Retention of Jurisdiction ............................................................................................... .....79 XXV. Modification............................................................................................................ ...........80 XXVI. General Provisions ...........................................................................................80 XXVII. Signatories and Service ................................................................................................ ....84 XXVIII. Public Comment ..............................................................................................................84 XXIX. Conditional Termination of Enforcement Under Decree ...................................................85 XXX. Final Judgment ........................................................................................................... .........86 Appendix A: Environm ental Mitigation Projects

iiWHEREAS, Plaintiff, the United States of America (“the United St ates”), on behalf of the United States Environmental Protection Agency (“EPA”), and Plaintiff, the State of Indiana, are filing with this Consent Decree a Complaint for injunctive relief a nd civil penalties pursuant to Sections 113(b)(2) and 167 of the Clean Air Act (“the Act”), 42 U.S.C. §§ 7413(b)(2) and 7477, and 326 Indiana Administrativ e Code sections 2-2 and 2- 7, alleging that Defendant, Northern Indiana Public Service Co. (“NIPSCO”), has undertaken construc tion projects at major emitting facilities in violation of the Prevention of Significant Deterioration (“PSD”) provisions of Part C of Subchapter I of the Act, 42 U.S.C. §§ 7470-7492, in violation of Nonattainment New Source Review requirements, 42 U.S.C.§§ 7501- 7515, in violation of the requirements of Title V of the Act, 42 U.S.C. §§ 7661-7661f and in violation of the federally enforceable Indiana State Implementation Plan (“SIP”); WHEREAS, EPA issued a Notice of Violation (the “NOV”) to NIPSCO on September 29, 2004, pursuant to Section 113(a) of the Act, 42 U.S.C. § 7413(a), allegi ng violations at the Michigan City, Rollin M. Schahfer, and Bailly Generating Stations of: (a) the PSD provisions in Part C of Subcha pter I of the Act, 42 U.S.C. §§ 7470-92, (b) the Nonattainment New Source Review requi rements in Part D of Subchapter I of the Act, 42 U.S.C. §§ 7501-7515, (c) Subchapter V of the Act, 42 U.S.C. §§ 7661-7661f, and (d) the federally enforceable Indiana SIP, including provisions implementing 40 C.F.R. § 52.21, and approved by EPA; WHEREAS, EPA provided NIPSCO and the State of Indiana actual notice of the alleged violations and commencement of the action, in accordance with Section 113 of the Act, 42 U.S.C. § 7413;

- 1 -WHEREAS, NIPSCO has been the owner and oper ator of the Michigan City, Rollin M. Schahfer, and Bailly Generating Stations from 1985 to the present; WHEREAS, in the Complaint, Plaintiffs United States and the State of Indiana (collectively “Plaintiffs”) allege, inter alia , that NIPSCO modified units and failed to obtain the necessary permits and install th e controls necessary under the Act to reduce sulfur dioxide, nitrogen oxides, and/or particul ate matter emissions, and that su ch emissions can damage human health and the environment; WHEREAS, Plaintiffs’ Compla int states claims upon which, if proven, relief can be granted against NIPSCO under Sections 113 a nd 167 of the Act, 42 U.S.C. §§ 7413 and 7477, and 28 U.S.C. § 1355; WHEREAS, NIPSCO has denied and continues to deny the vi olations alleged in the Complaint and the NOV, and maintains that it has been and remains in compliance with the Act, federal implementing regulations and Indiana air regulations and statutes, including the Indiana SIP, and that it is not liable for civil penalties, injunctiv e or other relief; WHEREAS, the Plaintiffs and the Defendant (collectively “the Parties,” and each, individually, a Party) anticipate that the inst allation and operation of pol lution control equipment pursuant to this Consent Decree will achieve significant reductions of sulfur dioxide (“SO 2 ”), nitrogen oxides (“NO x ”), and particulate matter (“PM”) emi ssions and improve air quality; and WHEREAS, the Parties have agreed, and th e Court by entering this Consent Decree finds, that this Consent Decree has been negotiate d in good faith and at arms’ length; that this settlement is fair, reasonable, in the best interest of the Parties and the p ublic, and is consistent with the goals of the Act and the Indiana SIP; and that entry of this Consent Decree without further litigation is the most appropri ate means of resolving this matter;

- 2 -WHEREAS, the Defendant has asserted that its Bailly Generating Station Units 7 and 8, Michigan City Generating St ation Unit 12, and Schahfer Ge nerating Station Unit 14, are cyclone-fired units, with cycling demand for electric generation and inherently high NOx baseline emissions, equipped w ith SCR (as hereinafter define d) systems with ammonia on demand (“AOD”) systems. NOW, THEREFORE, without a ny admission by the Defendant, and without adjudication of or admission with respect to the violations alleged in the Complaint or the NOV, it is hereby ORDERED, ADJUDGED, AND DECREED as follows: I. JURISDICTION AND VENUE 1) This Court has jurisdiction over this action, the subject matter herein, and the Parties consenting hereto, pursuant to 28 U.S.C. §§ 1331, 1345, 1355, and 1367, and Sections 113 and 167 of the Act, 42 U.S. C. §§ 7413 and 7477. Venue is proper under Section 113(b) of the Act, 42 U.S.C. § 7413(b) , and under 28 U.S.C. §§ 1391(b) and (c). 2) Solely for the purposes of this Consent Decree and the underlying Complaint, Defendant waives all objections an d defenses that it may have to the Court’s jurisdiction over Defendant and to venue in this District. Defendant shall not challenge the terms of this Consent Decree or this Court’s jurisdiction to enter and enforce this Consent Decree and agrees that the Co mplaint states claims upon wh ich, if such claims were proven, relief may be granted pursuant to Sec tion 113 of the Act, 42 U.S.C. § 7413(b). 3) Solely for purposes of the Complaint filed by Plaintiffs in this matter and this Consent Decree, for purposes of entry and enforcement of this Consent Decree, Defendant waives any defense or objecti on based on standing. Except as expressly provided for herein, this Consent Decree shall no t create any rights in any party other than

- 3 -Plaintiffs and Defendant. Ex cept as provided in Section XXV III (Public Comment) of this Consent Decree, the Parties cons ent to entry of this Consent Decree without further notice. 4) Notwithstanding the foregoing, should th is Consent Decree not be entered by this Court, then the waivers and consents set forth in this Section I (Jurisdiction and Venue) shall be null and void and of no effect. II. APPLICABILITY 5) Upon entry, the provisions of this Consent Decree shall apply to and be binding upon the Plaintiffs, the United States, including EPA, and the State of Indiana, including the Indiana Department of Envi ronmental Management, and upon NIPSCO, its successors and assigns, and its officers, employ ees and agents, solely in their capacities as such. 6) NIPSCO shall be responsible for provid ing a copy of this Consent Decree to all vendors, suppliers, consultants, contra ctors, agents, and any other companies or organizations retained after entry of this Consent Decree to perform any of the work required by this Consent Decree. Notwithst anding any retention of contractors, subcontractors, or agents to perform any work required under this Consent Decree, NIPSCO shall be responsible for ensuring that all work is performed in accordance with the requirements of this Cons ent Decree. In any action to enforce this Consent Decree, NIPSCO shall not assert as a defense the failu re of its officers, directors, employees, servants, agents, or contractors to take acti ons necessary to comply with this Consent Decree, unless NIPSCO establishes that such failure resulted from a Force Majeure Event, as defined in Section XVI (For ce Majeure) of this Consent Decree.

- 4 -III. DEFINITIONS 7) A “365-Day Rolling Average Emission Rate” for a Cyclone-fired Unit, other than the Bailly Units, shall be expressed as lb/mmBTU and calculated in accordance with the following procedure: first, sum the total pounds of NOx emitted from the Cyclone-fired Unit during an Operat ing Day and the previous three hundred and sixty-four (364) Operating Da ys, with such emissions being determined from data derived from CEMS installed and operated atthe Unit; second, sum the total heat input to the Cyclone-fired Unit in mmBTU during th e Operating Day and the previous three hundred and sixty-four (364) Operating Days; and third, di vide the total number of pounds of NOx emitted during those three hundre d and sixty-five (365) Operating Days by the total heat input during those three hundred and sixty-fi ve (365) Operating Days. For Bailly Units 7 and 8, which share common stacks, the “365-Day Rolling Average Emission Rate” shall be expressed as lb/mmB TU and calculated in accordance with the procedure enumerated above in this Paragraph for other Cyclone-fired Units, except that the total pounds of NOx emitted and the total heat input used to calculate the 365-Day Rolling Average Emission Rate shall be calculat ed by using the combined total pounds of NOx emitted from Bailly Units 7 and 8 and the combined total heat input to Bailly Units 7 and 8. A new 365-Day Rolling Average Emi ssion Rate shall be calculated for each new Operating Day. When a 365-Day Rolling Average Emission Rate includes Operating Days to which two different 365-Day Rolling Average Emission Rates apply, the less stringent 365-Day Rolling Average Emi ssion Rate shall apply until such time as all Operating Days within the 365-day rolling average period fall within the more stringent specified 365-Day Rolling Average Emission Rate (e.g., if the specified 365

-

- 5 -Day Rolling Average Emission Rate for a Cyclone-fired Unit on December 31, 2009 is 0.140 lb/mmBTU and the specified 365-Day Ro lling Average Emission Rate for that same Cyclone-fired Unit on December 31, 2010 becomes 0.120 lb/mmBTU, the less stringent December 31, 2009 specified rate would be the applicable 365-Day Rolling Average Emission Rate to determine on June 1, 2011 the Cyclone-fired Unit’s compliance because the 365-Day Rolling Averag e Emission Rate determined on June 1, 2011 would include Operating Days prior to December 31, 2010). Each 365-Day Rolling Average Emission Rate shall include all emissions that occur dur ing all periods of startup, shutdown and Malfunction within an Operating Day, except that emissions associated with a Malfunction that is determin ed to be a Force Majeure Event pursuant to Section XVI of this Consent Decree shall be excluded from the calculation of a 365-Day Rolling Average Emission Rate. 8) A “30-Day Rolling Average Emission Ra te” for a Unit, other than the Bailly Units, shall be expressed as lb/mmB TU and calculated in accordance with the following procedure: first, sum the total pounds of the pollutant in question emitted from the Unit during an Operating Day and the pr evious twenty-nine ( 29) Operating Days, with such emissions being determined from data derived from CEMS installed and operated at the Unit; second, sum the total he at input to the Unit in mmBTU during the Operating Day and the previous twenty-nine (29) Operating Days; and third, divide the total number of pounds of the pollutant emitted during the thirty (30) Operating Days by the total heat input during the thirty (30) Operating Days. For Bailly Units 7 and 8, which share common stacks, the “30-Day Rolling Average Emission Rate” shall be expressed as lb/mmBTU and calculated in accordance with the procedure enumerated

- 6 -above in this Paragraph for other Units, ex cept that the total p ounds of NOx emitted and the total heat input used to calculate the 30-Day Rolling Average Emission Rate shall be calculated by using the combined total pounds of NOx emitted from Bailly Units 7 and 8 and the combined total heat input to Bailly Units 7 and 8. A new 30-Day Rolling Average Emission Rate shall be calculated fo r each new Operating Day. When a 30-Day Rolling Average Emission Rate includes Opera ting Days that fall within two different specified 30-Day Rolling Average Emission Rates, the less stringent 30-Day Rolling Average Emission Rate shall apply until such time as all Operating Days within the 30

- day rolling average period fall within th e more stringent specified 30-Day Rolling Average Emission Rate (e.g., if the specified 30-Day Rolling Average Emission Rate for a Unit on December 1, 2010 is 0.170 lb/mmBTU and the specified 30-Day Rolling Average Emission Rate for that same Unit on January 1, 2011 becomes 0.150 lb/mmBTU, the less stringent December 1, 2010 specified rate would be the applicable 30-Day Rolling Average Emission Rate to determine on January 15, 2011 the Unit’s compliance because the 30-Day Rolling Aver age Emission Rate determined on January 15, 2011 would include Operating Days prior to January 1, 2011). Each 30-Day Rolling Average Emission Rate shall include all emissions that occur dur ing all periods of startup, shutdown and Malfunction within an Operating Day, except that emissions associated with a Malfunction that is determin ed to be a Force Majeure Event pursuant to Section XVI of this Consent Decree shall be excluded from the calculation of a 30-Day Rolling Average Emission Rate. 9) A “30-Day Rolling Average Removal Efficiency” means the percent reduction in the emissions of a pollutant achieved by a Unit’s pollution control device

- 7 -over a 30-Operating Day period. This percenta ge shall be calculated by subtracting the Unit’s outlet 30-Day Rolling Average Emissi on Rate from the Unit’s inlet 30-Day Rolling Average Emission Rate, with such rates being determined from data derived from CEMS installed and operated at the Unit, dividing the result by the 30-Day Rolling Average Emission Rate from the Unit’s inle t and then multiplying that result by 100. A new 30-Day Rolling Average Removal Efficien cy shall be calculated for each new Operating Day. 30-Day Rolling Average Emissi on Rates used in the calculation of 30

- Day Rolling Average Removal Efficiencies pursuant to this Paragraph shall include all emissions that occur during a ll periods of startup, shutdow n and Malfunction within an Operating Day, except that emissions associatedwith a Malfunction that is determined to be a Force Majeure Event pursuant to Secti on XVI of this Consen t Decree shall be excluded from the calculation of a 30-Day Rolling Average Emission Rate. 10) “Annual System Tonnage Limitation” means the limitation on the number of tons of the pollutant in question that may be emitted from the NIPSCO System during the relevant calendar year ( i.e. , January 1 through December 31), and shall include all emissions of the pollutant emitted during peri ods of startup, shutdown and Malfunction. 11) “Boiler Island” means a Unit’s: (a ) fuel combustion system (including bunker, coal pulverizers, crusher, stoker, and fuel burners); (b) combustion air system; (c) steam generating system ( i.e. , firebox, boiler tubes and wa lls); and (d) draft system (excluding the stack), as further described in“Interpretation of R econstruction,” John B. Rasnick, U.S. EPA (November 25, 1986), and the attachments thereto. 12) “Calendar Month” means all of the Op erating Days in one calendar month period.

- 8 -13) “Capital Expenditures” means all ca pital expenditures, as defined by Generally Accepted Accounting Principles (“GAAP”) , as those principles exist at the Date of Entry of this Consent Decree, excluding the cost of installi ng or upgrading pollution control devices. 14) “CEMS” and “Continuous Emissi on Monitoring System” mean, for obligations involving NO X and SO 2 under this Consent Decree, the devices defined in 40 C.F.R.§ 72.2 and installed and maintain ed as required by 40 C.F.R. Part 75. 15) “Clean Air Act” and “the Act” mean the federal Clean Air Act, 42 U.S.C. §§ 7401-7671q, and its implementing regulations. 16) “Consent Decree” and “Decree” mean this Consent Decree, including Appendix A which is hereto incorpor ated into this Consent Decree. 17) “Continuous Operation” and “C ontinuously Operate” mean, for obligations involving NOx, PM, and SO 2 under this Consent Decr ee, the operation of any specified NOx, PM or SO 2 control technology equipment at a ll times that the Unit it serves is in operation, except during a Malfuncti on of the control technology equipment, consistent with technological limitations, manufacturers’ specifications, and good air pollution control practices for minimizing emi ssions (as defined in 40 C.F.R. § 60.11(d)). 18) “Cyclone-fired Unit” means those Units in the NIPSCO System that operate cyclone-fired boilers for electric gene ration and have inherently high NOx baseline emissions. The following Units in the NIPSC O System are considered Cyclone-fired Units: Bailly Unit 7 and Unit 8, Michigan City Unit 12, and Schahfer Unit 14.

- 9 -19) “Date of Entry” means the date this Consent Decree is signed or otherwise approved in writing by the District Court Judge for the United States District Court for the Northern District of Indiana. 20) “Date of Lodging” means the date this Consent Decree is filed for lodging with the Clerk of the Court for the United States District Court for the Northern District of Indiana. 21) “Defendant” means the Northern Indi ana Public Service Co. (“NIPSCO”). 22) “Emission Rate” means the number of pounds of pollutant emitted per million British thermal units of heat input (“ lb/mmBTU”), measured in accordance with this Consent Decree. 23) “EPA” means the United States Environmental Protection Agency. 24) “ESP” and “Electrostatic Precipitator” mean a device for removing particulate matter from combustion gases by impa rting an electric charge to the particles and then attracting them to a metal plate or screen of opposite charge before the combustion gases are exhausted to the atmosphere. 25) “Flue Gas Desulfurization System” and “FGD” mean a pollution control device that employs flue gas desulfurizati on technology, including an absorber utilizing lime, fly ash, or limestone slurry, for the reduction of sulfur dioxide emissions. 26) “Fossil Fuel” means any hydrocarbon fuel, including coal, petroleum oil, and natural gas. 27) “Improved Unit” means, in the case of NO X , a NIPSCO System Unit that has an SCR or is scheduled under this Consen t Decree to be equipped with an SCR (or an equivalent NOx control technol ogy approved pursuant to Paragr aph 65) or in the case of

- 10 -SO 2 , a NIPSCO System Unit that has an FGD or is scheduled under this Consent Decree to be equipped with an FGD (or equivalent SO 2 control technology approved pursuant to Paragraph 80) in accordance with this Cons ent Decree. A Unit may be an Improved Unit for one pollutant without being an Improved Unit for the other. The following Units are, in accordance with the preceding sentences, Impr oved Units for purposes of this Consent Decree: Bailly Units 7 and 8 (NO X and SO 2 ); Michigan City Unit 12 (NO X and SO 2 ); Schahfer Unit 14 (NO X and SO 2 ); Schahfer Unit 15 (SO 2 ) and Schahfer Units 17 and 18 (SO 2 ). Schahfer Unit 15 can become an Improved Unit for NOx, if NIPSCO elects NOx Option 1 as described in Table 1 and Paragraph 60 of this C onsent Decree. Schahfer Unit 15 can also become an Improved Unit for NOx if NIPSCO elects NOx Option 2 as described in Table 1 and Pa ragraph 60 and Schahfer Unit 15 becomes, at NIPSCO’s discretion, subject to a federally enforceable 0.080 lb/mmBTU NO X 30-Day Rolling Average Emission Rate, for which the rate a nd the requirement to Continuously Operate such SNCR is incorporated into a site-speci fic amendment to the SIP and modification to the Title V permit. Schahfer Units 17 and 18 can become an Improved Unit for NOx if either Unit is equipped with an SCR (or equivalent NO X control technology approved pursuant to Paragraph 65) and has become subject to a federally enforceable 0.080 lb/mmBTU NO X 30-Day Rolling Average Emission Rate, which rate, and the requirement to Continuously Operate such SCR, is incorp orated into a site-sp ecific amendment to the SIP and modification to the Title V permit. 28) “Indiana SIP” means the Indiana stat e implementation plan approved and enforceable by EPA under Section 110 of the Act.

- 11 -29) “lb/mmBTU” means one pound of a pollu tant per million British thermal units of heat input. 30) “Low Sulfur Coal” means coal th at will achieve an uncontrolled SO 2 emission rate of less than 1.00 lb/mmBTU. 31) “Malfunction” means any sudden, infrequent, and not reasonably preventable failure of air pollu tion control equipment, process equipment, or a process to operate in a normal or usual manner. Failures that are caused in part by poor maintenance or careless operation ar e not Malfunctions. 32) “Monthly SO 2 Removal Efficiency” means the percent reduction in SO2 emissions achieved by the FGD at Bailly Un its 7 and 8 during a Calendar Month. This percentage shall be calculated in accordance wi th the following procedure: (a) first, sum the total pounds of SO 2 emitted during a Calendar Month from the outlet at the Bailly main stack (CS001) and the Bailly bypass stack; (b) second, divide that sum by the sum of the total pounds of SO 2 during that same Calendar Month that enter the Bailly FGD (as measured at the inlet to the FGD) and are emitted from Bailly bypass stack; (c) third, subtract that result from 1.0 or 100 percent ( i.e. , if the resulting nu mber is 0.10, subtract 0.10 from 1.0); and, (d) fourth, multipl y that result by 100. The pounds of SO 2 emitted from the Bailly main stack (CS001), inlet to th e FGD, and bypass stack shall be determined from data derived from SO 2 CEMS installed and operated at Bailly. Emissions associated with a Malfunction that is determined to be a Force Majeure Event pursuant to Section XVI of this Consent Decree shall be exclud ed from the calculation of a Monthly SO 2 Removal Efficiency. 33) “MW” means a megawatt or one million watts.

- 12 -34) “National Ambient Air Quality St andards” and “NAAQS” mean the national ambient air quality sta ndards that are promulgated pursuant to Section 109 of the Act, 42 U.S.C. § 7409. 35) “NIPSCO” means Northern Indiana Public Service Co. 36) “NIPSCO System” means the follo wing coal-fired, electric steamgenerating Units owned by NIPSCO and located in the State of Indiana, with estimated net demonstrated generating capacities for su ch Units listed in parentheses below:

a. the Bailly Electric Generation Station (“Bailly”) in Porter County, IN, comprised of Unit 7 (160 MW) and Unit 8 (320 MW); b. the Michigan City Generating Statio n (“Michigan City”) in LaPorte County, IN, comprised of Unit 12 (469 MW);

c. the Rollin M. Schahfer Electric Genera ting Station (“Schahfer”) in Jasper County, IN, comprised of Unit 14 (431 MW), Unit 15 (472 MW), Unit 17 (361 MW), and Unit 18 (361 MW); and d. the Dean H. Mitchell Electric Generating Station (“Mitchell”) in Lake County, IN, comprised of Unit 4 (110 MW), Unit 5 (125 MW), Unit 6 (126 MW), and Unit 11 (125 MW). 37) “Nonattainment New Source Review” and “Nonattainment NSR” mean the nonattainment area New Source Review (“NS R”) program within the meaning of Part D of Subchapter I of the Act, 42 U.S.C. §§ 7501-7515, and 40 C.F.R. Part 51, as well as any Nonattainment NSR provisi ons of the Indiana SIP. 38) “NO X ” means oxides of nitrogen.

- 13 -39) “NO X Allowance” means an authorizati on or credit to emit a specified amount of NO X that is allocated or issued under an emissions trading or marketable permit program of any kind that has been established under the Clean Air Act or the Indiana SIP. 40) “Over- Fired Air” and “OFA” mean an in-furnace staged combustion control to reduce NO X emissions. 41) “Operating Day” means any calendar day during which a Unit fires Fossil Fuel. 42) “Other Unit” means any Unit within the NIPSCO System that is not an Improved Unit for the pollutant in question. A Unit may be an Improved Unit for NO X and an Other Unit for SO 2 , and vice versa. 43) “Ownership Interest” means part or all of NIPSCO’ s legal or equitable ownership interest in the NIPSCO System Units. 44) “Parties” means the United States , including the EPA and the United States Department of Justice, the State of I ndiana, including the Indiana Attorney General and the Indiana Department of Envi ronmental Management, and NIPSCO. 45) “Plaintiff(s)” means the United States, including the EPA and the United States Department of Justice, and the State of Indiana, including the Indiana Attorney General and the Indiana Department of Environmental Management (“IDEM”). 46) “PM Control Device” means any device, including an ESP or a fullstream baghouse, that reduces emissions of particulate matter (“PM”). 47) “PM” means particulate matter.

- 14 -48) “PM Continuous Emission Monitori ng System” and “PM CEMS” mean the equipment that samples, analyzes, meas ures, and provides, by readings taken at frequent intervals, an electronic or paper record of PM emissions. 49) “PM Emission Rate” means the number of pounds of PM emitted per million BTU of heat input (“lb/mmBTU”). 50) “Project Dollars” means NIPSCO’s expenditures and payments incurred or made in carrying out the Environmental Mitigation Projects identified in Section X (Environmental Mitigation Projects) of this Consent Decree to the extent that such expenditures or payments both: (a) comply with the requirements se t forth in Section X (Environmental Mitigation Projects) and Appe ndix A of this Consent Decree; and (b) constitute NIPSCO’s direct payments for such projects, NIPSCO’s external costs for contractors, vendors, and equi pment, or NIPSCO’s internal costs consisting of employee time, travel, or out-of-pocket expenses specifical ly attributable to these particular projects and documented in accordance with GAAP. 51) “PSD” means Prevention of Significan t Deterioration program within the meaning of Part C of Subchapter I of th e Clean Air Act, 42 U.S.C. §§ 7470-7492 and 40 C.F.R. Part 52, as well as any PSD provisions of the Indiana SIP. 52) “Retire” or “Retirement” means to permanently cease to operate, physically render inoperable, a nd relinquish all Clean Air Act permits for a Unit within the NIPSCO System. 53) “Selective Catalytic Reduction System” and “SCR” mean a pollution control device that employs selective catal ytic reduction technology for the reduction of NO X emissions.

- 15 -54) “Selective Non-Catalytic Reducti on System” and “SNCR” mean a pollution control device that employs selec tive non-catalytic reduc tion technology for the reduction of NO X emissions. 55) “SO 2 ” means sulfur dioxide. 56) “SO 2 Allowance” means “allowance” as defined at 42 U.S.C. § 7651a(3): “an authorization, allocated to an affect ed unit by the Administrator of EPA under Subchapter IV of the Act, to emit, during orafter a specified cale ndar year, one ton of sulfur dioxide.” 57) “Surrender” means permanently surrendering NOx or SO 2 allowances so that such NOx or SO2 allowances can never be used to meet any compliance requirement under the Clean Air Act, the Indiana SIP, or this Consent Decree. 58) “Title V Permit” means the permit re quired for NIPSCO’s major sources under Subchapter V of the Act, 42 U.S.C. §§ 7661-7661f. 59) “Unit” means, collectively, the coal pulverizer, stationary equipment that feeds coal to the boiler, the boiler that pr oduces steam for the steam turbine, the steam turbine, the generator, equipm ent necessary to operate the generator, steam turbine and boiler, and all ancillary equipment, including po llution control equipment, at or serving a coal-fired steam electric ge nerating unit. An electric steam generating station may comprise one or more Units. IV. NO X EMISSION REDUCT IONS AND CONTROLS A. NO X Emission Controls 60) Commencing for each Unit on the dates set forth in Table 1 below, NIPSCO shall Continuously Operate the NOx control technology at each Unit in the

- 16 -NIPSCO System as stated in Table 1 and achie ve and continuously maintain the 30-Day Rolling Average Emission Rates for NOx set forth in Table 1.

Table 1 Unit Control Technology 30-Day Rolling Average Emission Rate (lb/mmBTU) Date required to meet 30-Day Rolling Average Emission Rate Bailly Units 7 and 8 Bailly Unit 7 SCR; Bailly Unit 8 SCR 0.180 March 31, 2011 Michigan City Unit 12 SCR 0.160 March 31, 2011 NOx Option A: SCR NOx Option B: Retire NOx Option A: 0.160 NOx Option B: N/A December 31, 2018

Schahfer Unit 14 SCR 0.160 March 31, 2011 Schahfer Unit 15 LNB/OFA 0.180 January 31, 2011 NOx Option 1: SCR NOx Option 2: SNCR NOx Option 1: 0.080 NOx Option 2: 0.150 NOx Option 1: December 31, 2015 NOx Option 2: December 31, 2012 Schahfer Unit 17 LNB/OFA 0.200 March 31, 2011 Schahfer Unit 18 LNB/OFA 0.200 March 31, 2011 61) By December 31, 2014, NIPSCO shall notify EPA of its decision to implement either NOx Option A or NOx Option B for Michigan City Unit 12 as described in Table 1. 62) By December 31, 2011, NIPSCO shall notify EPA of its decision to implement either NOx Option 1 or NOx Opti on 2 for Schahfer Unit 15 as described in Table 1.

- 17 -63) Commencing for each Cyclone-fired Un it on the dates set forth in Table 2 below, NIPSCO shall Continuously Operate the NOx control technology at each Cyclonefired Unit in the NIPSCO System as stated in Table 2 and achieve and continuously maintain the 365-Day Rolling Average Emissi on Rates for NOx set forth in Table 2. Table 2 Unit Control Technology 365-Day Rolling Average Emission Rate (lb/mmBTU) Date required to meet 365-Day Rolling Average Emission Rate Bailly Units 7 and 8 Bailly Unit 7 SCR; Bailly Unit 8 SCR 0.150 December 31, 2010 0.130 December 31, 2013 0.120 December 31, 2015 Michigan City Unit 12 SCR 0.140 December 31, 2010 0.120 December 31, 2011 0.100 December 31, 2013 Schahfer Unit 14 SCR 0.140 December 31, 2010 0.120 December 31, 2012 0.100 December 31, 2014

64) Beginning forty five (45) days from the Date of Entry of this Consent Decree, NIPSCO shall Continuously Operat e low NOx burners (“LNB”) and/or OFA on the NIPSCO System Units according to Table 3 below. Table 3 NIPSCO System Unit NOx Control Technology Bailly Unit 7 OFA Bailly Unit 8 OFA Michigan City Unit 12 OFA Schahfer Unit 14 OFA Schahfer Unit 15 LNB/OFA Schahfer Unit 17 LNB/OFA
- 18 -Schahfer Unit 18 LNB/OFA 65) With prior written notice to the Plain tiffs and written approval from EPA (after consultation by EPA with the State of Indiana), NIPSCO may, in lieu of installing and operating SCR or SNCR technology at a Un it, install and operate at that Unit equivalent NOx control technol ogy so long as such equivalentNOx control technology has been demonstrated to be capable of achi eving and maintaining a 30-Day Rolling Average Rate for NOx of not more than 0.080 lb/mmBTU for that NIPSCO Unit. If NIPSCO elects to install and operate equivalent NOx control technology at a Unit, it must commence operation of the equivalent NOx control technol ogy at that Unit by th e date specified for SCR or SNCR installation in Tabl e 1 or Table 2. Upon installation of such equivalent NOx control technology at a Unit as a means of complying with Table 1 or 2, NIPSCO shall Continuously Operate and achieve and mainta in a 30-Day Rolling Average Emission Rate for NOx of not more than 0.080 lb/mmBTU at that Unit.

B. General NO X Provision 66) In determining Emission Rates for NO X , NIPSCO shall use CEMS in accordance with the procedures of 40 C.F.R. Part 75.

C. Annual System Tonnage Limitation for NO X 67) In addition to meeting the emission limits set forth in Tables 1 and 2, all Units in the NIPSCO System, collectively, shall not emit NO X in excess of the Annual System Tonnage Limitations calculated on a calendar-year basis set forth in Table 4.

- 19 -Table 4 : Applicable Calendar Year Annual NIPSCO System Tonnage Limitation for NO X 2011 15,825 tons 2012 15,537 tons 2013 If NIPSCO selects NOx Option 1 in Table 1 (SCR on Schahfer Unit 15): 15,247 tons If NIPSCO selects NOx Option 2

in Table 1(SNCR on Schahfer Unit 15): 13,752 tons 2014 If NIPSCO selects NOx Option 1 in Table 1 (SCR on Schahfer Unit 15): 14,959 tons If NIPSCO selects NOx Option 2

in Table 1 (SNCR on Schahfer Unit 15): 13,464 tons 2015 If NIPSCO selects NOx Option 1 in Table 1 (SCR on Schahfer Unit 15): 14,365 tons If NIPSCO selects NOx Option 2

in Table 1 (SNCR on Schahfer Unit 15): 12,870 2016 If NIPSCO selects NOx Option 1 in Table 1 (SCR on Schahfer Unit 15): 11,704 tons If NIPSCO selects NOx Option 2

in Table 1 (SNCR on Schahfer Unit 15): 12,870 2017 Same as 2016

- 20 -2018 2019 and every year thereafter Same as 2016 If NIPSCO selects NOx Option 2

and NOx Option A in Table 1 (SNCR on Schahfer Unit 15 and SCR on Michigan City Unit 12): 12,870 tons If NIPSCO selects NOx Option 2

and NOx Option B in Table 1 (SNCR on Schahfer Unit 15 and Retirement of Michigan City Unit 12): 11,470 If NIPSCO selects NOx Option 1

and NOx Option A in Table 1 (SCR on Schahfer Unit 15 and SCR on Michigan City Unit 12): 11,704 tons If NIPSCO selects NOx Option 1

and NOx Option B in Table 1 (SCR on Schahfer Unit 15 and Retirement of Michigan City Unit 12): 10,300 tons

68) Except as may be necessary to comply with Section XV (Stipulated Penalties), NIPSCO may not use NO X Allowances to comply with any requirement of this Consent Decree, including by claiming complia nce with any emission limitation required by this Decree by using, tenderi ng, or otherwise applying NO X Allowances to offset any excess emissions ( i.e. , emissions above the limits specifi ed in Table 1, Table 2 and Table 4).

D. Use and Surrender of NO X Allowances 69) Except as provided in this Consent Decree, NIPSCO shall not sell or trade any NO X Allowances allocated to the NIPSCO Syst em that would othe rwise be available

- 21 -for sale or trade as a resu lt of the actions taken by NIPSCO to comply with the requirements, as they become due, of this Consent Decree. 70) For any given calendar year, provided that NIPSCO is in compliance for that calendar year with all emissions limitations for NOx set forth in this Consent Decree, nothing in this Consent Decr ee, including the requirement to Surrender NOx allowances under Paragraph 71 of this Consent Decree, shal l preclude NIPSCO from selling or trading NO X Allowances allocated to the NIPSCO System that become available for sale or trade that calendar year solely as a result of:

a. the installation and operation at a ny time of any NOx pollution control technology or technique that is not otherwise required by this Consent Decree, or the installation and operation of NOx controls prior to the dates required under this Section IV of this Consent Decree; or b. achievement and maintenance of a NO X 30-Day Rolling Average Emission Rate at any non-cyclone NI PSCO System Unit, as determined on a unit by unit basis, below the emissi on rate specified for such Unit in Table 1; or for any NIPSCO Cyclone-fired Unit, as determined on a unit by unit basis, achievement and maintenance of a NOx 30-Day Rolling Average Emission Rate below 0.100 lb /mmBTU for such Cyclone-fired Unit, and a NOx 365-Day Rolling Av erage Emission Rate below the emission rate specified for such Cyclone-fired Unit in Table 2, so long as NIPSCO timely reports the generation of such surplus NO X Allowances that occur after the Date of Entry of this C onsent Decree in accordance with Section XIII (Periodic Reporting) of this Consent Decree.

- 22 -71) Beginning with calendar year 2011, a nd continuing each calendar year thereafter, NIPSCO shall Surrender to EPA, or tr ansfer to a non-profit third party selected by NIPSCO for Surrender, all NOx Allowances allocated to the NIPSCO System Units for that calendar year that NIPSCO does not need in order to meet its ow n federal and/or state Clean Air Act statutory or regul atory requirements. This requi rement to Surrender all such NOx Allowances allocated to NIPSCO for a gi ven calendar year is subject to Paragraph 70 of this Consent Decree. NIPSCO shall make such Surrender annually, within forty-five (45) days of NIPSCO’s receipt of the Annual Deduction Reports for NOx from EPA. Surrender need not include the specific NOx A llowances that were allocated to NIPSCO System Units, so long as NIPSCO Surrenders NOx Allowances that are from the same year or an earlier year and that are equal to the number required to be Surrendered under this Paragraph. 72) If any NOx allowances are transferred directly to a non-pr ofit third party, NIPSCO shall include a descrip tion of such transfer in the next report submitted to EPA and the State of Indiana pursu ant to Section XIII (Periodic Reporting) of this Consent Decree. Such report shall: (i) provide the iden tity of the non-profit th ird-party recipient(s) of the NOx Allowances and a listing of th e serial numbers of the transferred NOx Allowances; and (ii) include a certification by the thir d-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 NOx Allowances to meet any obligation imposed by any environmental law. No later than the third periodic report due after the transfer of any NOx Allowances, NIPSCO shall include a statemen t that the third-party recipient(s) Surrendered the NOx Allowances for permanent Surrender to EP A in accordance with the provisions of

- 23 -Paragraph 71 within one (1) year after NIPSC O transferred the NOx Allowances to them. NIPSCO shall not have complied with the NOx Allowance Surrender requirements of this Paragraph until all third-party recipient(s) sh all have actually Surrendered the transferred NOx Allowances to EPA. 73) For all NOx Allowances Surrendered to EPA, NIPSCO or the third-party recipient(s) (as the case may be) shall first s ubmit a NOx Allowance transfer request form to the EPA Office of Air and Radiation’s Cl ean Air Markets Divisi on (“CAMD”) directing the transfer of such NOx Allowances to th e EPA Enforcement Surrender Account or to any other EPA account that EPA may direct in writing. As partof submitting these transfer requests, NIPSCO or the third-party recipient(s) shall irrevocably authorize the transfer of these NOx Allowances and identify by name of account and any applicab le serial or other identification numbers or station names the source and location of the NOx Allowances being Surrendered. 74) Nothing in this Consent Decree shall prevent NIPSCO from purchasing or otherwise obtaining NO X Allowances from another source for purposes of complying with state or federal Clean Air Act requirements to the extent otherwise allowed by law. Such allowances will not be used to demonstrate co mpliance with the annual tonnage caps of this Consent Decree. 75) The requirements in Paragraphs 69 through 74 of this Consent Decree pertaining to NIPSCO’s us e or Surrender of NO X Allowances are permanent injunctions not subject to any termination provision of this Consent Decree.

- 24 -V. SO 2 EMISSION REDUCTIONS AND CONTROLS A. SO 2 Emission Controls 76) Commencing for each Unit on the dates set forth in Table 5 below, NIPSCO shall Continuously Operate the FGDs at each Unit in the NIPSCO System as stated in Table 5 and achieve and conti nuously maintain the 30-Day Rolling Average Emission Rate or applicable SO 2 30-Day Rolling Average Removal Efficiency or Monthly SO 2 Removal Efficiency as set forth in Table 5. Table 5 Unit Control Technology 30-Day Rolling Average Emission Rate (lb/mmBTU) / Removal Efficiency & Monthly SO 2 Removal Efficiency Date required to meet emission rate/removal efficiency
Bailly Units 7 and 8 Upgrade existing 95.0% Monthly SO 2 Removal Efficiency January 1, 2011 FGD on Bailly 7 and 8 main stack 97.0% 30-Day Rolling Average SO2 Removal Efficiency or 95.0% 30-Day Rolling Average SO 2 Removal Efficiency if Bailly Units 7 and 8 burn only Low Sulfur Coal for that entire 30-day period January 1, 2014

Michigan City Unit 12 SO 2 Option 1: Retire SO 2 Option 2: FGD SO 2 Option 1: N/A

SO 2 Option 2: 0.100 lb/mmbtu 30-Day Rolling Average Emission Rate December 31, 2018

Schahfer Unit 14 FGD 0.080 lb/mmbtu 30-Day Rolling Average Emission Rate December 31, 2013

Schahfer Unit 15 FGD 0.080 lb/mmbtu 30-Day Rolling Average Emission Rate December 31, 2015 Schahfer Unit 17 Upgrade existing FGD 97.0 % 30-Day Rolling Average Removal Efficiency January 31, 2011

Schahfer Unit 18 Upgrade 97.0 % 30-Day Rolling Average January 31, 2011
- 25 -existing FGD Removal Efficiency

77) By December 31, 2014, NIPSCO shall no tify EPA of its decision to implement either SO 2 Option 1 or SO 2 Option 2 for Michigan City Unit 12 as described in Table 5. 78) NIPSCO utilizes a main stack (CS00001) through which air emissions from both Bailly Units 7 and 8 are routed. NIPSCO has in place an existing contract with Pure Air, a separate entity, under which Pure Air owns and operates an FGD controlling SO2 emissions from Bailly Units 7 and 8. This FGD controls SO 2 emissions from both Bailly Units 7 and 8. During periods of star tup, the FGD and the main stack cannot be used for the unit(s) experiencing startup. Wh en either or both Bailly Units 7 and 8 are experiencing startup, emissions from the unit( s) experiencing startup are routed through a bypass stack that serves Bailly Unit 7 and Unit 8 around the FGD and these emissions are not controlled by the FGD. While combusting fuel, emissions from a Bailly unit shall be routed through the FGD unless that unit is e xperiencing startup. The following restrictions shall apply to NIPSCO’s use of the bypass stack:

a. While combusting fuel, NIPSCO shall not use the Bailly Unit 7 and Unit 8 bypass stack for any emission purpose othe r than during periods of startup, and then may only use it for the unit(s) experien cing startup. b. All SO 2 emissions associated with periods of startup are included in the calculation of the Monthly SO 2 Removal Efficiency and 30-Day Rolling Average SO 2 Removal Efficiency for Bailly Unit 7 and 8 as described in Table 5, except that NIPSCO may ex clude from that calculation those

- 26 -startup emissions from a unit that occur up until that unit reaches a temperature of 280 degrees Fahrenheit as measured at the outlet of the precipitator, not to exceed 16 hour s in duration per startup while combusting coal. NIPSCO may howeve r, exclude from the relevant removal efficiency, startup emissions that occur after the 16 thhour up to the 24 th hour, if NIPSCO Surrenders SO 2 Allowances in an amount equal to the difference between the actual tons of SO 2 emitted from the bypass stack between hour 17 and the point in time NIPSCO ceases use of the bypass stack for startup em issions (but, in any event, no longer than hour 24) and the tons of SO 2 emissions that would have been emitted assuming compliance with the relevant removal efficiency for Bailly Unit 7 and 8 specified in Table 5. In addition, NIPSCO may onl y exclude these limited unit startup emissions for the Bailly bypass stack if NI PSCO demonstrates to EPA that such emissions otherwis e would cause NIPSC O to violate the relevant removal efficiency for Bailly Unit 7 or 8 as described in Table 5. Such demonstration shall require that NIPSCO, at minimum, provide EPA with calculations of emissions with and without bypass stack emissions;

c. NIPSCO shall limit the use of the bypa ss stack to the greatest extent practicable; d. NIPSCO shall operate the bypass stack consistent with good engineering and maintenance practices for minimizing emissions to the extent practicable; and

- 27 -e. Annual System Tonnage Limitations in Tables 4 and 6 shall apply during all periods of emissions, including all periods of bypass stack emissions. 79) In the event that the Monthly SO2 Re moval Efficiency requirements for Bailly Unit 7 and Unit 8 as listed in Table 5 are not achieved for any given Calendar Month prior to January 1, 2014 after applying Paragraph 78, as applicable, NIPSCO may nonetheless remain in compliance with th e requirements of this Section V (SO 2 Emissions Reduction and Controls) by Surrendering the number of SO2 Allowances equal to two times (2x) the difference between the actual tons of SO2 emitted from the Bailly main stack (CS001) during such Calendar Month minus the tons of SO2 emissions that would have been emitted from that stack during that Calendar Month had NIPSCO complied with the applicable Monthly SO2 Removal Efficiency sp ecified in Table 5. In all cases where the applicable Monthly SO 2 Removal Efficiency is not ach ieved for a given Calendar Month prior to January 1, 2014, the di fference between the actual SO 2 emissions emitted and the compliance level of SO 2 emissions during such Calendar Month shall be rounded up to the next highest ton (e.g., if the difference is 750 pounds, then th e difference shall be rounded up to one ton and SO 2 Allowances equal to two tons woul d be required to be retired). Any allowances retired under this Paragraph 79 sha ll be in addition to any allowances that NIPSCO is otherwise required to Surrender to EPA or transfer to a non-prof it third party pursuant to Paragraph 86 and 87 of this Consent Decree. After January 1, 2014, the method described in this Paragr aph 79 may not be used to co mply with the requirements of this Section. 80) After prior written notice to the Plain tiffs and prior written approval from EPA (after consultation by EPA with the St ate of Indiana), NIPSCO may, in lieu of

- 28 -installing and operating FGD tec hnology at Schahfer Unit 15, inst all and operate equivalent SO 2 control technology, so long as such equivalent SO 2 control technology has been demonstrated to be capable of achieving a nd maintaining a 30-Day Rolling Average Rate for SO 2 of not more than 0.080 lb/mmBTU, and so long as NIPSCO commences operation of the equivalent SO 2 control technology by the date sp ecified for FGD installation in Table 5. If it elects to request equivalent SO 2 technology, NIPSCO shall provide the written notice referenced above no later than December 31, 2012. Upon installation of such equivalent SO 2 control technology as a means of complying with Table 5, NIPSCO shall achieve and maintain a 30-Day Rolling Average Emission Rate for SO 2 of not more than 0.080 lb/mmBTU at that Unit.

B. General SO2 Provisions 81) In determining Emission Rates for SO 2 , NIPSCO shall use CEMS in accordance with the procedures of 40 C.F.R. Part 75.

C. Annual System Tonnage Limitation for SO 2 82) In addition to meeting the emission limits set forth in Table 5, all Units in the NIPSCO System, collectively, shall not emit SO 2 in excess of the Annual System Tonnage Limitations calculated on a calendar-year basis set forth in Table 6. Table 6 : Applicable Calendar Year Annual NIPSCO System Tonnage Limitation for SO 2
2011 50,200 tons 2012 Same as 2011

- 29 -2013 Same as 2011 2014 35,900 tons 2015 Same as 2014

2016 25,300 tons

2017 Same as 2016

2018 Same as 2016

2019 and thereafter If NIPSCO selects SO 2 Option 2 (Michigan City Unit 12 FGD): 11,600 tons If NIPSCO selects SO 2 Option 1 (Retirement of Michigan City Unit 12): 10,200 tons

83) Except as may be necessary to comply with Section XV (Stipulated Penalties), and except as permitted or requi red under Paragraphs 78 and 79, NIPSCO may not use SO 2 Allowances to comply with any require ment of this Cons ent Decree, including by claiming compliance with any emission limitation required by th is Decree by using, tendering, or otherwise applying SO 2 Allowances to offset any excess emissions ( i.e. , emissions above the limits specified in Table 5 and Table 6).

D. Use and Surrender of SO 2 Allowances 84) Except as provided in this Consent Decree, NIPSCO shall not sell or trade any SO 2 Allowances allocated to the NIPSCO System that would otherwise be available for sale or trade as a result of the actions taken by NIPSCO to comply with the requirements, as they become due, of this Consent Decree.

- 30 -85) For any given calendar year, providedthat the NIPSCO System is in compliance for that calendar year with all emissions limitations for SO 2 set forth in this Consent Decree, nothing in this Consent Decr ee, including the requ irement to Surrender SO 2 Allowances under Paragraph 86 of this C onsent Decree, shall preclude NIPSCO from selling or trading SO 2 Allowances allocated to the NIPSC O System that become available for sale or trade that calendar year solely as a result of:

a. the installation and operation of a ny pollution control technology or technique that is not otherwise requi red by this Consent Decree, or the installation and operatio n of any FGD prior to the dates required by Section V of this Consent Decree; or b. achievement and maintenance of an SO 2 30-Day Rolling Average Removal Efficiency, 30-Day Rolling Average Emission Rate, or Monthly SO2 Removal Efficiency at any NIPSCO System Unit, as determined on a unit by unit basis, at a higher removal efficiency than the SO 2 30-Day Rolling Average Removal Efficiency or Monthly SO 2 Removal Efficiency specified for such Unit, or below the SO 2 30-Day Rolling Average Emission Rate specified for such Unit, so long as NIPSCO timely reports the generation of such surplus SO 2 Allowances that occur after the Date of Entry of the Consent Decree in accordance with Section XIII (Periodic Reporting) of this Consent Decree. 86) Beginning with calendar year 2011, a nd continuing each calendar year thereafter, NIPSCO shall Surrender to EPA, or tr ansfer to a non-profit third party selected by NIPSCO for Surrender, all SO 2 Allowances allocated to the NIPSCO System Units for

- 31 -that calendar year that NIPSCO does not need in order to meet its ow n federal and/or state Clean Air Act statutory or regul atory requirements. This requi rement to Surrender all such SO 2 Allowances is subject to Paragraph 85 of this Consent Decree. NIPSCO shall make such Surrender annually, within forty-five (45) days of NIPSCO’s receipt of the Annual Deduction Reports for SO 2 from EPA. Surrender need not include the specific SO 2 Allowances that were allocated to NIPSCO System Units, so long as NIPSCO surrenders SO 2 Allowances that are from the same year or an earlier year and that are equal to the number required to be surre ndered under this Paragraph. 87) If any allowances are transferred di rectly to a non-profit third party, NIPSCO shall include a descrip tion of such transfer in the next report submitted to EPA and the State of Indiana pursu ant to Section XIII (Periodic Reporting) of this Consent Decree. Such report shall: (i) provide the iden tity of the non-profit th ird-party recipient(s) of the SO 2 Allowances and a listing of the serial numbers of the transferred SO 2 Allowances; and (ii) include a certification by the thir d-party recipient(s) stating that the recipient(s) will not sell, trade, or otherwise exchange any of the allowances and will not use any of the SO 2 Allowances to meet any obligation imposed by any environmental law. No later than the third periodic repo rt due after the transfer of any SO 2 Allowances, NIPSCO shall include a statemen t that the third-party recipient(s) Surrendered the SO 2 Allowances for permanent surrender to EP A in accordance with the provisions of Paragraph 86 within one (1) ye ar after NIPSCO transferred the SO 2 Allowances to them. NIPSCO shall not have complied with the SO 2 Allowance Surrender requirements of this Paragraph until all third-party recipient(s) sh all have actually Surrendered the transferred SO 2 Allowances to EPA.

- 32 -88) For all SO 2 Allowances surrendered to EPA, NIPSCO or the third-party recipient(s) (as the case may be) shall first submit an SO 2 Allowance transfer request form to the EPA Office of Air and Radiation’s Cl ean Air Markets Divisi on (“CAMD”) directing the transfer of such SO 2 Allowances to the EPA Enforcem ent Surrender Account or to any other EPA account that EPA may direct in writing. As partof submitting these transfer requests, NIPSCO or the third-party recipient(s) shall irrevocably authorize the transfer of these SO 2 Allowances and identify by name of account and any applicable serial or other identification numbers or station names the source and location of the SO 2 Allowances being surrendered. 89) Nothing in this Consent Decree shall prevent NIPSCO from purchasing or otherwise obtaining SO 2 Allowances from another source for purposes of complying with state or federal Clean Air Act requirements to the extent otherwise allowed by law. Such allowances shall not be used to demonstrat e compliance with the annual tonnage caps of this Consent Decree. 90) The requirements in Paragraphs 84 thr ough 89 of this Decree pertaining to NIPSCO’s surrender of SO 2 Allowances are permanent in junctions not subject to any termination provision of this Decree. VI. PM EMISSION REDUCTIONS AND CONTROLS A. Optimization of PM Emission Controls 91) Beginning ninety (90) days after the Date of Entry of this Consent Decree, and continuing thereafter, NIPSCO shall Contin uously Operate each PM Control Device on each Unit within the NIPSCO System, to maximi ze the PM emission reductions at all times when the unit is in operation, pr ovided that such operation of the PM Control Device is

- 33 -consistent with the technological limitations, manufacturer’s specifications and good engineering and maintenance practices for th e PM Control Device. During any periods when any section or compartment of the PM control device is not operational, NIPSCO will minimize emissions to the extent practic able (as defined in 40 C.F.R. § 60.11(d)). Notwithstanding the foregoing se ntences of this Paragraph 91, NIPSCO shall not be required to operate an ESP on any Unit if a fullstream baghouse is installed and operating to replace the ESP . Specifically, NIPSCO shall, at a minimum, to the extent practicable, and where applicable: (a) ener gize each available s ection of the ESP for each Unit, or at each Unit where a baghouse is installed, operate each compartment of the baghouse for each such Unit, regardless of whether that acti on is needed to comply with opacity limits; (b) maintain the energy or power levels deliv ered to the ESPs for each Unit to achieve optimal removal of PM, or at each Unit wher e a baghouse is installed, maintain and replace bags on each baghouse as needed to maximize collection efficiency; (c) at each Unit inspect the ESP or the baghouse (at any Unit where a baghouse is installed) for any openings or leakage in the casings, ductwork an d expansion joints, and make best efforts to expeditiously repair and return to serv ice any ESP section or baghouse compartment needing repair; (d) at each Unit where no baghouse is installed or operating, operate automatic control systems on the ESP, including the plate-cleaning a nd discharge electrode cleaning systems, to maximize control efficien cy; and (e) at each Un it where a baghouse is installed and operating, make best efforts to e xpeditiously repair and return to service any failed baghouse compartment.

- 34 -B. PM Emissions 92) Beginning for each Unit on the dates sp ecified in Table 7 below, NIPSCO shall achieve and maintain a PM Emission Ra te of no greater than 0.030 lb/mmBTU. If NIPSCO installs a fullstream baghouse on any of the Units identified in Table 7 to replace an existing ESP, pursuant to Paragraph 91 above, NIPSCO shall, upon installation of such baghouse, achieve and maintain a PM Emissi on Rate of no greater than 0.015 lb/mmBTU. Table 7 NIPSCO System Unit Date Bailly Units 7 and 8 Main Stack (CS001) December 31, 2010 Michigan City Unit 12 December 31, 2018

Schahfer Unit 14 December 31, 2013

Schahfer Unit 15 December 31, 2015

Schahfer Unit 17 December 31, 2010

Schahfer Unit 18 December 31, 2010

C. PM Emissions Testing 93) Beginning in calendar year 2011 and continuing in each calendar year thereafter, NIPSCO shall conduct a PM perf ormance test on each NIPSCO System Unit identified in Table 7. The annual perform ance test requirement imposed on NIPSCO by this Paragraph may be satisfied by stack test s conducted by NIPSCO as may be required by its permits from the State of Indiana for any ye ar that such stack te sts are required under the permits. NIPSCO may perform testing every othe r year, rather than every year, provided
- 35 -that two of the most recently completed testresults from tests conducted in accordance with the methods and procedures specified in this Paragraph demonstrate that the PM emissions are equal to or le ss than 0.015 lb/mmBTU. NIPSCO shall perform testing every year, rather than every other year, beginning in the year immediat ely following any test result demonstrating that the PM emi ssions are greater th an 0.015 lb/mmBTU.

D. General PM Provision 94) 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, or an alternative method that is promulgate d by EPA, requested for use herein by NIPSCO, and approved for use herein by EPA and IDEM. Use of any particular method shall conform to the EPA requirements specifie d in 40 C.F.R. Part 60, Appendix A and 40 C.F.R. §§ 60.48a (b) and (e), or any federa lly approved method contained in the Indiana SIP. NIPSCO shall calculate the PM Emissi on Rates from the stack test results in accordance with 40 C.F.R. § 60.8(f). The results of each PM stack test shall be submitted to EPA and IDEM within forty-five ( 45) days of completion of each test. VII. UNIT RETIREMENT 95) No later than December 31, 2010, NIPSC O shall Retire Mitchell Units 4, 5, 6, and 11. 96) If NIPSCO elects to Retire any Unit within the NIPSCO System other than Michigan City Unit 12 or Mitchell Units 4,5,6, and 11, such Retirement shall not alter the Annual System Tonnage Limitations as descri bed in Tables 4 and 6.

- 36 -VIII. PROHIBITION ON NETTING CREDITS OR OFFSETS FROM REQUIRED CONTROLS 97) Emission reductions that result from actions to be taken by NIPSCO after the Date of Entry of this Consent Decree to comply with the require ments of this Consent Decree shall not be considered as a creditabl e contemporaneous emission decrease for the purpose of obtaining a netting or offset cred it under the Clean Ai r Act’s Nonattainment NSR and PSD programs. 98) The limitations on the generation and use of netting credits or offsets set forth in the previous Paragraph 97 do notapply to emission reductions achieved by NIPSCO System Units that are greater than those required under this Consent Decree. For purposes of this Paragraph, emission reductions from a NIPSCO System Unit are greater than those required under this Consent Decree if, for exampl e, they result from NIPSCO’s compliance with federally enforceable emission limits that are more stringent than those limits imposed on the NIPSCO System and indivi dual Units under this Consent Decree and under applicable provisions of the Cl ean Air Act or the Indiana SIP. 99) Nothing in this Consent Decree is intended to preclude the emission reductions generated under this Consent Decr ee from being considered by the State of Indiana 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. 100) Nothing in this Consent Decree precludes any emissions from any NIPSCO System Units that occur either prior to the Date of Entry of this Consent Decree or thereafter from being considered in a ny modeling analyses required pursuant to 40 C.F.R. Part 52 or the Prevention of Significan t Deterioration regula tions under the Indiana - 37 -SIP for purposes of demonstrating compliance w ith PSD increments or air quality related values, including visibili ty, in a Class I area. IX. PM AND MERCURY CONTINUOUS EM ISSION MONITORING SYSTEMS (CEMS) 101) Within eighteen months after the Date of Entry of this Consent Decree, or within 90 days of EPA’s approval of NIPSCO’s timely submittal under Paragraph 104, whichever is later, NIPSCO shall install, certify, maintain, and operate two PM CEMS and two mercury CEMS. NIPSCO shall install each PM CEMS and mercury CEMS such that representative measurements of emissions are obtained from the monitored unit(s). Each CEMS shall complete a minimum of one cycle of operations (sampling, analyzing and data recording) for each successive 15-minute pe riod. Except for CEMS breakdowns, repairs, calibration checks, and zero and span adjustme nts, NIPSCO shall continuously operate the PM CEMS and mercury CEMS consistent wi th technical limitations and manufacturer specifications. 102) The PM CEMS identified in Paragraph 101 above, shall be installed at NIPSCO’s Michigan City Unit 12 and Schahfer Unit 15. The PM CEMS shall comprise a continuous particle mass monitor measuring par ticulate matter concen tration, directly or indirectly, on a continuous basis. NIPSCO shall install a diluent monitoring system on Michigan City Unit 12 and Schahfer Unit 15 su ch that the PM mass concentration can be converted to units of lb/mmBTU. NIPSCO sha ll certify the two PM CEMS in accordance with 40 C.F.R. Part 60, Appendix B, Performance Specification 11. NIPSCO shall submit installation plans, operation pl ans and perform testing and reporting in accordance with Paragraphs 104 through 106 of this Consent Decree. In the event NIPSCO elects to retire

- 38 -Michigan City Unit 12, PM CEMS shall be installed on Schahfer Unit 14 in accordance with the requirements of this Paragraph prior to the retirement of Michigan City Unit 12. 103) The mercury CEMS identified in Paragraph 101 shall be installed at NIPSCO’s Michigan City Unit 12 and Schahf er Unit 15. The mercury CEMS shall be comprised of a continuous total vapor phase mercury monitoring device which measures total vapor phase mercury concentration, directly or indirectly, on a continuous basis. NIPSCO shall install a diluent monitoring syst em on Michigan City Unit 12 and Schahfer Unit 15, such that the mercury concentrations can be converted to units of pounds per trillion BTU (lb-mercury/TBTU) on an hourly average basis. NIPSCO shall certify the Mercury CEMS in accordance with 40 C.F.R. Part 60, Appendix B, Performance Specification 12a. NIPSCO shall submit instal lation plans, operation plans and perform testing and reporting in accordance with Paragraphs 104 through 106 of this Consent Decree. In the event NIPSCO elects to retir e Michigan City Unit 12, mercury CEMS shall be installed on Schahfer Unit 14 in accordance with the requirements of this Paragraph prior to the retirement of Michigan City Unit 12. 104) Within six (6) months after the Date of Entry of this Consent Decree, NIPSCO shall submit to EPA for review and approval pursuant to Section XIV (Review and Approval of Submittals) of this Consent Decree the following information regarding the PM and mercury CEMS: (a) a plan for th e installation, certifica tion and operation of the CEMS; and (b) no less than six (6) months prior to conducting tests in accordance with Paragraph 105 of this Consent Decree a proposed QA/QC protocol that shall be followed in calibrating each PM CEMS and mercury CE MS. In developing both the plan for installation and certification of the PM a nd mercury CEMS and the QA/QC protocol,

- 39 -NIPSCO shall use the criteria set forth in 40 C.F.R. Part 60, Appendix B (PS 11 and PS 12a). EPA shall expeditiously review such submissions. Following approval by EPA, NIPSCO shall thereafter opera te the PM and mercury CEMS in accordance with the approved protocols. 105) No later than ninety days (90) af ter the deadline imposed by Paragraph 101, or within 90 days after EPA’s approval of NIPSCO’s submittals pursuant to Paragraph 104, whichever is later, NIPSC O shall conduct tests on ea ch PM CEMS and mercury CEMS to demonstrate compliance with the CEMS installation and certification plan submitted to and approved by EPA in accordance with Paragraph 104. NIPSCO shall submit the results of all certification testing (including incomplete testing and associated Reference Method Testing) to EPA and IDEM with in forty-five (45) days of completion of certification testing 106) Upon completion of testing in acco rdance with Paragraph 105 above, NIPSCO shall begin and continue to report to EPA, pursuant to Section XIII (Periodic Reporting), the data recorded by the PM a nd mercury CEMS, expressed in lb-PM/mmBTU and lb-mercury/TBTU, respectively. The data shall be reported as a three-hour rolling average basis in electronic format, as requi red by Section XIII, and shall include: each exceedance of an applicable PM mass emission limit (including those occurring during startup, shutdown and/or Malfunction), the ma gnitude of each exceedance, the date and time of commencement and completion of each period of exceedance, the process operating time during the reporting period, the nature and cause of each exceedance, the corrective action(s) taken or preventative measure(s) adopted in response to each exceedance, the date and time of each peri od during which any of the CEMS were

- 40 -inoperative (except for zero and span checks) , and the nature of system repairs or adjustments. For purposes of this Consent Decree, stack testing pursuant to Paragraph 94 shall be the method to determine compliance with the PM Emission Rate established by this Consent Decree. However, data from th e PM CEMS shall be used to, at a minimum, monitor progress in reducing PM emissions. 107) Nothing in this Consent Decree is inte nded to, or shall, alter or waive any applicable law (including any defenses, entitleme nts, challenges, or clar ifications related to the Credible Evidence Rule, 40 C.F.R. § 52.12(c) (62 Fed. Reg. 8,315; Feb. 27, 1997)) concerning the use of data for any purpose under the Act. X. ENVIRONMENTAL MITIGATION PROJECTS 108) NIPSCO shall implement the Envi ronmental Mitigation Projects (“Projects”) described in A ppendix A to this Consent Decree in compliance with the approved plans and schedules for such Projects and other terms of th is Consent Decree. NIPSCO shall submit plans for the Projects to Plaintiffs for review and approval pursuant to Section XIV (Review and Approval of Submittals) of this Consent Decree in accordance with the schedules set forth in Appendix A. In implementing the Projects, NIPSCO shall spend no less than $9.5 million in Project Dollars within five (5) years of the Date of Entry of this Consent Decree. NIPSCO shall maintain, and presen t to Plaintiffs upon request, all documents to substantiate the Project Dollars expended and shall provide these documents to Plaintiffs within thirty (30) days of a request. 109) All plans and reports prepared by NI PSCO pursuant to the requirements of this Section of the Consent Decree and require d to be submitted to EPA shall be publicly available from NIPSC O without charge.

- 41 -110) NIPSCO shall certify, as part of each pl an submitted to Plaintiffs for any Project, that NIPSCO is not ot herwise required by law to perform the Project described in the plan, that NIPSCO is unaware of any ot her person who is required by law to perform the Project, and that NIPSCO will not use any Project, or portion thereof, to satisfy any obligations that it may have under other appl icable requirements of law, including any applicable renewable portfolio standard s or energy conservation standards. 111) NIPSCO shall use good faith efforts to s ecure as much benefit as possible for the Project Dollars expended, consistent withthe applicable requirements and limits of this Consent Decree. 112) If NIPSCO elects (where such an el ection is allowed) to undertake a Project by contributing funds to another person or entity that will carry out the Project in lieu of NIPSCO, but not including NIPSCO’s agents or contractors, that person or instrumentality must, in writing: (a) identify its legal authority for accepting such funding; and (b) identify its legal authority to conduc t the Project for which NIPSCO contributes the funds. Regardless of whether NIPSCO elected(where such electi on 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 Proj ect, NIPSCO acknowledges that it will receive credit for the expenditure of such funds as Project Dollars only if NIPSCO demonstrates that the funds have been actually spen t by either NIPSCO or by the person or instrumentality receiving them (or, in the case of internal costs, have actually been incurred by NIPSCO), and that such expenditures met al l requirements of this Consent Decree. 113) Beginning six (6) months after the Date of Entry of this Consent Decree, and continuing until completion of each Projec t (including any applicable periods of

- 42 -demonstration or testing), NIPSCO shall pr ovide Plaintiffs with semi-annual updates concerning the progress of each Project. 114) Within sixty (60) days following th e completion of each Project required under this Consent Decree (including any applic able periods of demons tration or testing), NIPSCO shall submit to Plaintiffs a report that documents the date that the Project was completed, NIPSCO’s results from implementing the Project, including the emission reductions or other environmental benefits achieved, and the Projec t Dollars expended by NIPSCO in implementing the Project (includi ng the emission reductions achieved for SO2, NOx, PM, and CO2). 115) In connection with any communication to the public or to shareholders regarding NIPSCO’s actions or expenditures relating in any way to the Environmental Mitigation Projects in this Consent Decree, NIPSCO shall include prominently in the communication the information that the actions and expenditures were required as part of a consent decree to resolve allegations th at NIPSCO violated the Clean Air Act. XI. CIVIL PENALTY 116) Within thirty (30) calendar days afte r the Date of Entry of this Consent Decree, NIPSCO shall pay to the United States and the State of Indian a a civil penalty in the amount of $3.5 million, as follows: (a) NIPSCO shall pay a civil penalty of $ 3.3 million to the United States. The civil penalty to the United States shal l be paid by Electronic Funds Transfer (“EFT”) to the United States Departme nt of Justice, in accordance with current EFT procedures, referenci ng DOJ Case Number 90-5-2-1-08417 and the civil action case name and case number of this action. The costs of such

- 43 -EFT shall be NIPSCO’s responsibility. Payment shall be made in accordance with timely instructions provided to NIPSCO by the Financial Litigation Unit of the U.S. Attorney’s Office for the Northern District of Indiana. Any funds received after 2:00 p.m. EDT shall be cr edited on the next business day. At the time of payment, NIPSCO shall pr ovide 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 XXI (Notices ) of this Consent Decree. (b) NIPSCO shall pay a civil pe nalty of $200,000 to the State of Indiana. Payment shall be made by check made out to the “Environmental Management Special Fund” and shall be mailed to: Indiana Department of Environmental Management Cashier- Mail Code 50-10C 100 North Senate Avenue Indianapolis, IN 46204-2251 117) Failure to timely pay the civil penalty shall subject NIPSCO 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 NIPSCO 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. 118) Payments made pursuant to this Sec tion 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.

- 44 -XII. RESOLUTION OF PAST AND FUTURE CLAIMS A. Resolution of Plaintiffs’ Civil Claims 119) Claims of the United States Based onModifications Occurring Before the Lodging of Decree . Entry of this Consent Decree sh all resolve all civil claims of the United States under:

a. Parts C and D of Subchapter I of the Clean Air Act, 42 U.S.C. §§ 7470

- 7492, 7501-7515, and the implementing federa l and state rules, including the Indiana SIP approved under Section 110 of the Act implementing Parts C or D of Subc hapter I; and b. Title V of the Clean Air Act, 42 U.S.C. §§ 7661-7661f, and the implementing Title V operating permit program, including regulations that EPA has approved and/or promulgate d under the Act, but only to the extent that such claims are based on NIPSCO’s failure to obtain or amend an operating permit or failure to submit or amend an operating permit application that reflects applicab le requirements imposed under Parts C and D of Subchapter I of the Clean Air Act; that arose from or are based on any modification that comme nced at any NIPSCO System Unit prior to the Date of Lodgi ng of this Consent Decree, in cluding but not limited to those claims and modifications alleged in the Complain t filed by the Plaintiffs in this civil action and those claims and modifications asse rted in the NOV issued by EPA to NIPSCO . 120) Claims of the State of Indiana Ba sed on Modifications Occurring Before the Lodging of Decree . Entry of this Decree shall resolv e all civil claims of the State of Indiana under:

- 45 -a. Parts C and D of Subchapter I of the Clean Air Act, 42 U.S.C. §§ 7470

- 7492, 7501-7515, and the implementing federa l and state rules, including all civil claims under Indian a regulations at 326 IAC 2-1 et seq. (Construction and Operating Pe rmit Requirements), 326 IAC 2-2 et seq

. (PSD Requirements) and 326 IAC 2-3 et seq . (Emission Offset), and any related Indiana statutes, including all versions of the Indiana major New Source Review program that existed at the time of the modifications alleged in the Complaint to any NIPSCO System Unit; b. Indiana regulations at 326 IAC 2 th at govern minor New Source Review and any related Indiana statutes, in cluding any Indiana rule governing minor New Source Review that existe d at the time of the modifications alleged in the Complaint to any NIPSCO System Unit; and

c. Indiana statutes as they specifically apply to the programs implemented pursuant to Subchapter V of the Act, as well as Indiana regulations at 326 IAC 2-7 et seq . (Part 70 Permit Program); that arose from or are based on any modification that comme nced at any NIPSCO System Unit prior to the Date of Lodgi ng of this Consent Decree, in cluding but not limited to those claims and modifications alleged in the Complain t filed by the Plaintiffs in this civil action and those claims and modifications asse rted in the NOV issued by EPA to NIPSCO . 121) Plaintiffs’ Claims Based on Modifi cations After the Lodging of Decree. Entry of this Consent Decree also shall resolve all civil claims of th e United States and of the State of Indiana for pollutants, except sulf uric acid mist, regulated under Parts C and D of Subchapter I of the Clean Air Act, and under regulations promulgated as of the Date of

- 46 -Lodging of this Consent Decree, where su ch claims are based on any modification completed before December 31, 2018, and

a. is commenced at any NIPSCO SystemUnit after the Date of Lodging; or b. that this Consent Decree expres sly directs NIPSCO to undertake. The term “modification” as used in this Para graph 121 shall have the meaning that term is given under the Clean Air Act or under the regulations promulgated thereunder as of the Date of Lodging of this Consent Decree. For purposes of this Paragraph 121, civil claims shall not include greenhous e gases (carbon dioxide, ni trous oxide, methane, hydroflurorcarbons, perfluorocarbons, and sulf ur hexafluoride) even if greenhouse gases are pollutants regulated under Part C or D of Subchapter I of the Act, and under regulations promulgated thereunder. 122) Reopener . The resolution of the civil clai ms of the United States and the State of Indiana provided by this Subsection is subject to the provision s of Subsection B of this Section.

B. Pursuit of Plaintiffs’ Civ il Claims Otherwise Resolved 123) Bases for Pursuing Resolved Claims Across NIPSCO System . If NIPSCO violates an Annual Tonnage Limits in Tables 4 or 6, or fails by more than ninety (90) days to complete upgrading of the Bailly FGD orinstallation and commence operation of any emission control device required pursuant to th is Consent Decree; or fails by more than ninety (90) days to retire and permanently cease to operate all Mitchell Units pursuant to Section VII (Unit Retirement), then the Unite d States or the State of Indiana may pursue any claim at any NIPSCO System Unit that ha s otherwise been resolved under Subsection A of this Section, subject to (a) and (b) below.

- 47 -a. For any claims based on modifications undertaken at an Other Unit (i.e. any Unit of the NIPSCO System that is not an Improved Unit for the pollutant in question), claims may be pursued only where the modification(s) on which such claim is based was commenced within the five years preceding the violation or fa ilure specified in this Paragraph. b. For any claims based on modificatio ns undertaken at an Improved Unit, claims may be pursued only where the modification(s) on which such claim is based was commenced: (i) af ter lodging of th e Consent Decree, and (ii) within the five years preceding the violation or failure specified in this Paragraph. 124) Additional Bases for Pursuing ResolvedClaims for modifications at an Improved Unit. Solely with respect to Improved Units, the United States or the State of Indiana may also pursue claims arisi ng from a modification (or collection of modifications) at an Improved Unit that have otherwise been resolvedunder Section XII, Subsection A, if the modification (or collection of modifications) at the Improved Unit on which such claim is based: (i) was commenced after the Date of Lodging, and (ii) individually (or collectively) increased the maximum hourly em ission rate of that Unit for NO x or SO 2 (as measured by 40 C.F.R. § 60.14 (b) and (h)) by more than ten percent (10%). 125) Additional Bases for Pursuing ResolvedClaims for Modifications at an Other Unit. Solely with respect to Other Units, the United States or the State of Indiana may also pursue claims arising from a modifi cation (or collection of modifications) at an Other Unit that have otherwise been resolvedunder Section XII, Subsection A, if the

- 48 -modification (or collection of modifications) on which the cl aim is based was commenced within the five years preceding any of the following events:

a. a modification (or collection of m odifications) at such Other Unit commenced after the Date of Lodging that increases the maximum hourly emission rate for such Other Unit for the relevant pollutant (only NO x or SO 2 ) as measured by 40 C.F.R. § 60.14(b) and (h); b. the aggregate of all Capital Expendit ures paid at such Other Unit exceed $150/KW on the Unit’s Boiler Island (b ased on the capacity numbers included in Paragraph 36) during January 1, 2011, through December 31, 2017. (Capital Expenditures shall be measured in calendar year 2009 constant dollars, as adjusted by the McGraw-Hill E ngineering NewsRecord Construction Cost Index); or

c. a modification (or collection of m odifications) at such Other Unit commenced after the Date of Lodging re sults in an emissions increase of NO x and/or SO 2 at such Other Unit, and such increase: i. presents, by itself, or in combination with other emissions or sources, “an imminent and substa ntial endangerment” within the meaning of Section 303 of the Act, 42 U.S.C. §7603; ii. causes or contributes to violation of a NAAQS in any Air Quality Control Area that is in at tainment with that NAAQS; iii. causes or contributes to viola tion of a PSD increment; or iv. causes or contributes to any adverse impact on any formally recognized air quality and related values in any Class I area.

- 49 -d. The introduction of any new or chan ged NAAQS shall not, standing alone, provide the showing needed under subpa ragraph (c) of this Paragraph to pursue any claim for a modification at an Other Unit resolved under Subsection A of this Section. XIII. PERIODIC REPORTING 126) Pursuant to Paragraph 93 of this Consent Decree, NIPSCO shall conduct performance tests for PM that demonstrate compliance with the PM Emission Rate required by this Consent Decree with respect to NIPSCO System Units. Within forty-five (45) days of each such performance test , NIPSCO shall submit the results of the performance test to EPA and IDEM at the ad dress specified in Section XXI (Notices) of this Consent Decree. 127) Beginning thirty (30) days after th e end of the second calendar quarter following the Date of Entry of this Consen t Decree, and continuing on a semi-annual basis until termination of this Consent Decree, and in addition to any other express reporting requirement in this Consent Decree, NI PSCO shall submit to EPA a progress report containing the following information:

a. all information necessary to determine compliance with the requirements of the following Tables of this C onsent Decree: Tables 1, 2, 3 and 4 concerning NO X emissions; Tables 5 and 6 concerning SO 2 emissions (including information related to burning of low sulfur coal at Bailly Units 7 and 8); and Table 7 concerning PM emissions;

- 50 -b. documentation of any Capital Expenditu res at a Unit’s Boiler Island made during the period covered by the pr ogress report and cumulative Boiler Island Capital Expenditures to date;

c. all information relating to emission a llowances and credits that NIPSCO claims to have generated in accordance with Paragraphs 70 and 85, through compliance beyond the requirem ents of this Consent Decree; d. all information indicating the status of installation and commencement of operation of pollution controls, including information that the installation and commencement of operation of a pollution control device may be delayed, including the nature and cause of the delay, and any steps taken by NIPSCO to mitigate such delay;

e. all affirmative defenses asserted by NIPSCO pursuant to Section XVII (Affirmative Defense) for that quarter; f. all information relating to excess emissions due to startup, shutdown, and Malfunction emissions, including step s taken to minimize the adverse effects of such excess emissions; and
g. information verifying compliance with: i. Continuous Operation of all po llution control equipment, ii. allowance Surrender requirements, including supporting calculations, and iii. optimization of any ESP’s, including any periods during which all sections were not in service, the reasons therefore and actions taken to remedy such failure.

- 51 -128) In any periodic progress report submitted pursuant to this Section, NIPSCO may incorporate by reference informa tion previously submitted under its Title V permitting requirements, provided that NIPSCO a ttaches the Title V permit report, or the relevant portion thereof, and provides a specifi c reference to the provisions of the Title V permit report that are responsive to the inform ation required in the periodic progress report. 129) In addition to the progress reports required pursuant to this Section, NIPSCO shall provide a written report to EPA of any violation of the requirements of this Consent Decree within fifteen (15) calendar days of when NIPSCO knew or should have known of any such violation. In this report, NIPSCO shall ex plain the cause or causes of the violation and all measures taken or to be taken by NIPSCO to prevent such violations in the future. 130) Each NIPSCO report shall be signe d by NIPSCO’s Vice President of Generation or his or her equiva lent or designee of at least th e 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 su bmitted. Based on my evaluation, or the directions and my inquiry of the pe rson(s) who manage the system, or the person(s) directly responsible for gathering the information, I hereby certify under penalty of law that, to the best of my knowledge and belief, this information is true, accurate, and complete. I understand that there are significant penalties for submitting false, inaccurate, or incomplete information to the United States. 131) If any Allowances are Surrendered to any third party pursuant to this Consent Decree, the third party’ s certification purs uant to Paragraphs 72 and 87, 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 - 52 -understand that there are significant penalties for submitting false, inaccurate, or incomplete information to the United States. XIV. REVIEW AND APPROVAL OF SUBMITTALS 132) Unless otherwise provided, NIPSCO shall submit each plan, report, or other submission required by this Consent Decr ee to Plaintiffs whenever such a document is required to be submitted for review or approval pursuant to this Consent Decree. Plaintiffs may approve the submittal or decline to approve it and provide written comments explaining the bases for declining such approva l. Within sixty (60) days of receiving written comments from Plaintiffs, NIPSCO shall either: (a) revise the submittal consistent with the written comments and provide the revised submittal to Plaintiffs; or (b) submit the matter for dispute resolution, including the pe riod of informal negotiations, under Section XVIII (Dispute Resolution) of this Consent Decree. 133) Upon receipt of EPA’s final approval of the submittal, or upon completion of the submittal pursuant to dispute resolution, NIPSCO shall implement the approved submittal in accordance with the schedule sp ecified therein or another EPA-approved schedule. XV. STIPULATED PENALTIES 134) For any failure by NIPSCO to comply with the terms of this Consent Decree, and subject to the pr ovisions of Sections XVI (For ce Majeure), VXII (Affirmative Defenses) and XVIII (Dispute Resolution), NIPSCO shall pay, within thirty (30) days after receipt of written demand to NIPSCO by th e United States, the following stipulated penalties to the United States:

- 53 -Table 8
Consent Decree Violation Stipulated Penalty a. Failure to pay the civil pe nalty as specified in Section XI (Civil Penalty) of this Consent Decree. $10,000 per day
b. Failure to comply with any applicable 30-Day Rolling Average Emission Rate for SO 2 or NOx, where the violation is less than 5% in excess of the limits 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 SO 2 or NOx, where the violation is equal to or great er than 5% but less than 10% in excess of the limits 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 SO 2 or NOx, where the violation is equal to or greater than 10% in excess of the limits set forth in this Consent Decree. $10,000 per day per violation

e. Failure to comply with any applicable average Removal Efficiency for SO2 wh ere the violation is equal to or less than 0.15% less than the applicable limit. $2,500 per day per violation

f. Failure to comply with any applicable average Removal Efficiency for SO 2 where the violation is greater than 0.15% but less than 0.3% less than the applicable limit. $5,000 per day per violation

g. Failure to comply with any applicable average Removal Efficiency for SO2 wh ere the violation is equal to or greater than 0.3% less th an the applicable limit. $10,000 per day per violation

h. Failure to comply with any applicable 365-Day Rolling Average Emission Rate for NOx, where the violation is less than 5% in excess of the limits set forth in this Consent Decree. $350 per day of violation for a 365-Day Rolling Average Emission Rate violation, plus $4,000 for each subsequent 365

- Day Rolling Average Emission Rate violation that includes any day in a previously assessed 365

- Day Rolling Average Emission Rate violation ( e.g ., if a violation of the 365-Day Rolling Average

- 54 -Emission Rate for a Unit first occurs on June 1, 2010, occurs again on June 2, 2010, and again on May 31, 2011, the total stipulated penalty assessed for these three violations would equal $135,750). i. Failure to comply with any applicable 365-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 limits set forth in this Consent Decree. $450 per day of violation for a 365-Day Rolling Average Emission Rate violation, plus $5,000 for each subsequent 365

- Day Rolling Average Emission Rate violation that includes any day in a previously assessed 365

- Day Rolling Average Emission Rate violation ( e.g ., if a violation of the 365-Day Rolling Average Emission Rate for a Unit first occurs on June 1, 2010, occurs again on June 2, 2010, and again on May 31, 2011, the total stipulated penalty assessed for these three violations would equal $174,250). j. Failure to comply with any applicable 365-Day Rolling Average Emission Rate for NOx, where the violation is equal to or greater than 10% in excess of the limits set forth in this Consent Decree. $600 per day of violation for a 365-Day Rolling Average Emission Rate violation, plus $6,000 for each subsequent 365

- Day Rolling Average Emission Rate violation that includes any day in a previously assessed 365

- Day Rolling Average Emission Rate violation ( e.g ., if a violation of the 365-Day Rolling Average Emission Rate for a Unit first occurs on June 1, 2010, occurs again on June 2, 2010, and again on May 31, 2011, the total stipulated penalty assessed for these three violations would equal $231,000). k. Failure to comply with the Annual Tonnage Limits $5,000 per ton for the first 1000 tons, and $10,000 per ton for each - 55 -for SO 2. additional ton above 1000 tons. In addition, NIPSCO shall Surrender, pursuant to the procedures set forth in Paragraph 86, SO 2 Allowances in an amount equal to two times the number of tons by which the limitation was exceeded l. Failure to comply with the Annual Tonnage Limits for NO X . $5,000 per ton for the first 1000 tons, and $10,000 per ton for each additional ton above 1000 tons. In addition, NIPSCO shall Surrender, pursuant to the procedures set forth in Paragraph 71, NO x Allowances in an amount equal to two times the number of tons by which the limitation was exceeded. m. Operation of a Unit required under this Consent Decree to be equipped with any NO X , SO 2 , or PM control device without the operation of such device, to the extent operation of that control device is required under this Consent Decree. $10,000 per day per violation during the first 30 days, $27,500 per day per violation thereafter

n. Failure to install or oper ate CEMS as required in this Consent Decree. $1,000 per day per violation
o. Failure to conduct performance tests of PM emissions, as required in this Consent Decree. $1,000 per day per violation
p. Failure to apply for any permit, or amendment or application therefor, required by Section XIX (Permits and SIP Revisions). $1,000 per day per violation

q. 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 r. Selling or trading NO X Allowances except as permitted by Section IV. D (Use and Surrender of NOx Allowances). The surrender of NO X Allowances in an amount equal to four times the number of NO X Allowances used, sold, or transferred in violation of this Consent Decree s. Selling or trading SO 2 Allowances except as permitted The surrender of SO 2 Allowances

- 56 -by Section V.D (Use and Surrender of SO 2 Allowances). in an amount equal to four times the number of SO 2 Allowances used, sold, or transferred in violation of this Consent Decree t. Failure to Surrender NOx Allowances as required by Paragraph 71. (a) $27,500 per day plus (b) $1,000 per NOx Allowance not surrendered u. Failure to Surrender SO 2 Allowances as required by Paragraph 86. (a) $27,500 per day plus (b) $1,000 per SO 2 Allowance not surrendered v. Failure to demonstrate the third-party Surrender of an NOx Allowance in accordan ce with Paragraphs 72 and 73. $2,500 per day per violation

w. Failure to demonstrate th e third-party surrender of an SO 2 Allowance in accordance with Paragraphs 87 and 88. $2,500 per day per violation

x. Failure to undertake and complete any of the Environmental Mitigation Projects in compliance with Section X (Environmental Miti gation Projects) of this Consent Decree. $1,000 per day per violation during the first 30 days, $5,000 per day per violation thereafter
y. Failure to notify EPA of its decision to adopt any NOx or SO2 Option pursuant to Tables 1 and 5. $1,000 per day per violation
z. Violating an applicable PM Emission Rate based on the results of a stack test re quired pursuant to Paragraph 94 of this Consent Decree, where the violation is less than 5% in excess of the limit set forth in this Consent Decree. $2,500 per day, starting on the day a stack test result demonstrates a violation and continuing each day thereafter until and excluding such day on which a subsequent stack test* demonstrates compliance with the applicable PM Emission Rate aa. Violating an applicable PM Emission Rate based on the results of a stack test re quired pursuant to Paragraph 94 of this Consent Decree, wher e 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, starting on the day a stack test result demonstrates a violation and continuing each day thereafter until and excluding such day on which a subsequent stack test* demonstrates compliance with the applicable PM Emission

- 57 -Rate bb. Violating an applicable PM Emission Rate based on the results of a stack test re quired pursuant to Paragraph 94 of this Consent Decree, wher e the violation is equal to or greater than 10% in excess of the limits set forth in this Consent Decree. $10,000 per day, starting on the day a stack test result demonstrates a violation and continuing each day thereafter until and excluding such day on which a subsequent stack test* demonstrates compliance with the applicable PM Emission Rate cc. Failure to optimize ESP or Baghouse pursuant to Paragraph 91. $2,500 per day
dd. Any other violation of this C onsent Decree $1,000 per day per violation *NIPSCO shall not be required to make any submission, including any notice or test protocol, or to obtain any approval to or from EPA or IDEM in advance of conducting such a subsequent stack test.
135) Violations of any limit based on a 30-Day Rolling Average constitute thirty (30) days of violation, but where such a violation (for the same pollutant and from the same Unit) recurs within periods less th an thirty (30) Operating Days, NIPSCO shall not be obligated to pay a daily stipulated pe nalty for any day of the recurrence for which a stipulated penalty has al ready been paid. 136) Violations of any limit based on a 365-Day Rolling Average constitute 365 days of violation, but where such a violation (for the same pollutant and from the same Unit) recurs within periods le ss than 365 Operating Days, NIPSC O 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. 137) A violation of the Monthly SO 2 Removal Efficiency for a given Calendar Month shall constitute a viol ation on each day within the Month. For clarity, if NIPSCO Surrenders SO 2 allowances pursuant to Paragraph 79 of this Consent Decree as a means to

- 58 -comply with the Monthly SO 2 Removal Efficiency require ment, there is no Monthly SO 2 Removal Efficiency violation. 138) All stipulated penalties shall be gin to accrue on the day after the performance is due or on the day a violati on occurs, whichever is applicable, and shall continue to accrue until performance is sa tisfactorily completed or until the violation ceases, whichever is applicable. Nothing in this Consent Decree shall prevent the simultaneous accrual of separate stipulated penal ties for separate violations of this Consent Decree. 139) NIPSCO shall pay all stipulated penaltie s to the United States within thirty (30) days of receipt of written demand to NIPSCO from the United States, and shall continue to make such payments every thirty (30) days thereafter unt il the violation(s) no longer continues, unless NIPSCO elects within twenty (20) days of receipt of written demand to NIPSCO from the United States to dispute the obligati on to pay or the accrual of stipulated penalties in accordance withthe provisions in Section XVIII (Dispute Resolution) of this Consent Decree. 140) Stipulated penalties shall continue to accrue as provided in accordance with Paragraph 134 during any dispute, with interest on accrued stipulated penalties payable and calculated at the rate established by the Secretar y 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 agreem ent, or by a decision of Plaintiffs pursuant to Section XVIII (Dispute Re solution) of this Consent Decree that is not appealed to the Court, ac crued stipulated penalties agreed or determined to be owing, together wi th accrued interest, shall be paid

- 59 -within thirty (30) days of the effec tive date of the agreement or of the receipt of Plaintiffs’ decision; b. If the dispute is appealed to the Court and Plaintiffs prevail in whole or in part, NIPSCO shall, within sixty (60) days of receipt of the Court’s decision or order, pay all accrued s tipulated penalties determined by the Court to be owing, together with interest accrued on such penalties determined by the Court to be owing, except as provided in subparagraph (c) of this Paragraph; or

c. If the Court’s decision is appealed by any Party, NIPSCO shall, within fifteen (15) days of receipt of the final appellate court decision, pay all accrued stipulated penalties determined to be owing, together with interest accrued on such stipulated penalties determined to be owing by the appellate court. Notwithstanding any other provision of this Consent Decree, the accrued stipulated penalties agreed by Plaintiffs and NIPSCO, or determined by Plaintiffs through Dispute Resolution, to be owing may be less than th e stipulated penalty amounts set forth in Paragraph 134. 141) All stipulated penalties shall be paid in the manner set forth in Section XI (Civil Penalty) of this Consent Decree. 142) Should NIPSCO 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.

- 60 -143) The stipulated penalties provided for in this Consent Decree shall be in addition to any other rights, remedies, or sanc tions available to the United States or the State of Indiana by reason of NIPSCO’s failure to comply with any requirement of this Consent Decree or applicable law, except that fo r any violation of this Consent Decree (for which this Consent Decree provides for payment of a stipulated penalty) that is also a violation of the Act, including the implementing Title V operating permit program, regulations EPA has approved and/or promulgated under th e Act, the Indiana SIP, including Indiana regulations under 326 IAC Artic le 2, or of an operable Title V permit, NIPSCO shall be allowed a credit for stipulatedpenalties paid agai nst any statutory or regulatory penalties also imposed for such violation. XVI. FORCE MAJEURE 144) 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 NIPSCO, its contractors, or any entity controlled by NIPSCO that delays compliance with any provision of this Consent Decree or otherwise causes a violation of any provision of this Consent Decree despite NIPSCO’s 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 occurri ng; and (b) after it has occurred, such that the delay and violation are minimized to the greatest extent possible and the emissions during such event are minimized to the greatest extent possible. Specific references to Force Majeure in other parts of this Consent Decree do not restrict the ability of NIPSCO to assert Force Maje ure pursuant to the process de scribed in this section.

.

- 61 -145) 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 NIPSCO intends to assert a claim of Force Majeure, NIPSCO shall notify Plaintiffs in writi ng as soon as practicab le, but in no event later than fourteen (14) business days following the date NIPSCO 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, NIPSCO 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 meas ures taken or to be taken by NIPSCO to prevent or minimize the delay or violation, the schedule by which NIPSCO proposes to implement those measures, and NIPSCO’s rationale for attributing a delay or violation to a Force Majeure Event. A copy of this notice shall be sent el ectronically, as soon as pr acticable, to the U.S. Department of Justice, EPA, and IDEM. NI PSCO shall adopt all reasonable measures to avoid or minimize such delays or violations and any resulting emissions. NIPSCO shall be deemed to know of any circumstance which NIPSCO, its contractors, or any entity controlled by NIPSCO knew or should have known. 146) Failure to Give Notice . If NIPSCO fails to comply with the notice requirements of this Section, EPA may void NI PSCO’s claim for Force Majeure as to the specific event for which NIPSCO has failed to comply with such notice requirement. 147) EPA’s Response . EPA shall notify NIPSCO in writing regarding NIPSCO’s claim of Force Majeure within twenty (20) business days of receipt of the notice provided under Paragraph 144. If EPA agrees th at a delay in performance has been or will be caused by a Force Majeure Event, EPA and NIPSCO shall stipulate to an extension of

- 62 -deadline(s) for performance of the affected compliance requirement(s) by a period equal to the delay actually caused by the event. In such circumstances, an appropriate modification shall be made pursuant to Section XXV (M odification) of this Consent Decree. 148) Disagreement . If EPA does not accept NI PSCO’s claim of Force Majeure, or if EPA and NIPSCO cannot agree on the length of the delay actually caused by the Force Majeure Event, the matter shall be resolvedin accordance with Section XVIII (Dispute Resolution) of this Consent Decree. 149) Burden of Proof . In any dispute regarding Force Majeure, NIPSCO 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. NIPSCO shall also bear the burd en of proving that NIPSCO gave the notice required by this Section and the burden of pr oving the anticipated duration and extent of any delay(s) attributable to a Force Majeure Event. An extension of one compliance date based on a particular event may, but will not necessarily, result in an extension of a subsequent compliance date. 150) Events Excluded . Unanticipated or increased costs or expenses associated with the performance of NIPSCO’s obligati ons under this Consen t Decree shall not constitute a Force Majeure Event. 151) Potential Force Majeure Events . The Parties agree that, depending upon the circumstances related to an event and NI PSCO’s response to such circumstances, the kinds of events listed below are among those that could qualify as Force Majeure Events within the meaning of this S ection: construction, labor, or equipment delays; failure of PureAir to agree to modify any contract regarding the operation of the FGD on Bailly Units

- 63 -7 or 8; Malfunction of a Unit or emission c ontrol device; acts of God; acts of war or terrorism; and orders by a government official, government agency, other regulatory authority, or a regional transmission orga nization, acting under and authorized by applicable law, that directs NIPSCO to suppl y electricity in response to a system-wide (statewide or regional) emergency or to shut down a Unit or Units. Depending upon the circumstances and NIPSCO’s response to such circumstances, failure of a permitting authority to issue a necessary permit in a ti mely fashion may constitute a Force Majeure Event where the failure of the permitting auth ority to act is beyond the control of NIPSCO and NIPSCO 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. 152) As part of the resolution of any matter submitted to this Court under Section XVIII (Dispute Resolution) of this Consent Decree regarding a claim of Force Majeure, Plaintiff and NIPSCO by agreement, orthis Court by order, may in appropriate circumstances extend or modify the schedule for completion of work under this Consent Decree to account for the delay in the work that occurred as a result of any delay agreed to by the United States or approved by the Court. NIPSCO shall be liable for stipulated penalties for its failure thereafter to complete the work in accordance with the extended or modified schedule (provided that NIPSCO sha ll not be precluded from making a further claim of Force Majeure with regard to meeti ng any such extended or modified schedule).

- 64 -XVII. AFFIRMATIVE DEFENSES 153) Affirmative defense as to stipulat ed penalties for excess emissions occurring during Malfunctions . If any of NIPSCO’s Units exceeds a unit-specific 30-Day Rolling Average Emission Rate, 30-Day Rolling Average Removal Efficiency, or Monthly SO2 Removal Efficiency due to a Malfuncti on, NIPSCO, bearing the burden of proof, has an affirmative defense to stipulated pena lties under this Consent Decree if NIPSCO complies with the reporting requ irements of Paragraphs 156, and demonstrates all of the following:

a. the excess emissions were caused by a sudden, unavoidable breakdown of technology, beyond NIPSCO’s control; b. the excess emissions did not stem from any activity or event that could have been foreseen and avoided, or pl anned for, and could not have been avoided by better operation and maintenance practices;

c. to the maximum extent practicable, the air pollution control equipment and processes were maintained and ope rated in a manner consistent with good practice for minimizing emissions; d. repairs were made in an expediti ous fashion when NIPSCO knew or should have known that the applicab le 30-Day Rolling Average Emission Rate, 30-Day Rolling Average Removal Efficiency or Monthly SO2 Removal Efficiency was being or woul d be exceeded. Off-shift labor and overtime must have been utilized, to the greatest extent practicable, to ensure that such repairs were made as expeditiously as practicable;

- 65 -e. the amount and duration of the exces s emissions (including any bypass) were minimized to the maximum extent practicable during periods of such emissions; f. all possible steps were taken to mi nimize the impact of the excess emissions on ambient air quality;
g. all emission monitoring systems were ke pt in operation if at all possible; h. NIPSCO’s actions in response to the excess emissions were documented by properly signed, contemporaneous ope rating logs, or other relevant evidence; i. the excess emissions were not part of a recurring pattern indicative of inadequate design, operation, or maintenance; and j. NIPSCO properly and promptly notified EPA as required by this Consent Decree. 154) Affirmative Defenses as to stipulated penalties for excess emissions occurring during st artup or shutdown . If any of NIPSCO’s Units exceed a unit-specific 30

- Day or 365-Day Rolling Average Emission Rate, 30-Day Rolling Average Removal Efficiency, or Monthly SO2 Removal Efficien cy due to startup or shutdown, NIPSCO, bearing the burden of proof, has an affirmativ e defense to stipulated penalties under this Consent Decree if NIPSCO co mplies with the reporting requ irements of Paragraphs 156, and demonstrates all of the following:

a. The periods of excess emissions th at occurred during startup and shutdown were short and infrequent and could not have been prevented through careful and prudent planning and design;

- 66 -b. The excess emissions were not part of a recurring pattern indicative of inadequate design, operation, or maintenance;

c. If the emissions were caused by a bypass (an intenti onal diversion of control equipment), then the bypass was unavoidable to prevent loss of life, personal injury, or severe property damage; d. At all times, the facility was operate d in a manner consistent with good practice for minimizing emissions;

e. The frequency and duration of operation in startup or shutdown mode was minimized to the maximum extent practicable; f. All possible steps were taken to minimize the impact of the excess emissions on ambient air quality;
g. All emission monitoring systems were keptin operation if at all possible; h. NIPSCO’s actions during the period of excess emissions were documented by properly signed, contemporaneous ope rating logs, or other relevant evidence; and i. NIPSCO properly and promptly notified EPA as required by this Consent Decree. 155) If excess emissions occur due to a Malfunction during startup and/or shutdown, then those instances shall be treate d as other Malfunctions subject to Paragraph 153. 156) NIPSCO shall provide notice to the Un ited States in wr iting of NIPSCO’s intent to assert an affirmative defense as to stipulated penalties fo r Malfunction, startup, or shutdown in NIPSCO’s semi-annual progress re ports as required by Paragraph 127(e).

- 67 -This notice shall be submitted to EPA pursuant to the provisions of Section XXI (Notices). The notice shall contain:

a. The identity of each stack or other emission point where the excess emissions occurred; b. The magnitude of the excess emission s expressed in the units of the applicable emissions limitation and th e operating data and calculations used in determining the magnitude of the excess emissions;

c. The time and duration or expected duration of the excess emissions; d. The identity of the equipment from which the excess emissions emanated;

e. The nature and cause of the emissions; f. The steps taken, if the excess emissions were the result of a Malfunction, to remedy the Malfunction and the step s taken or planned to prevent the recurrence of the Malfunctions;
g. The steps that were or are being ta ken to limit the excess emissions; and h. If NIPSCO’s permit contains pro cedures governing source operation during periods of startup, shutdown, or Malfunction and the excess emissions resulted from startup, s hutdown, or Malfunction, a list of the steps taken to comply with the permit procedures. 157) A Malfunction, startup, or shutdown sh all not constitute a Force Majeure Event unless the Malfunction, startup, or shut down also meets the definition of a Force Majeure Event, as provided in Section XVI (Force Majeure).

- 68 -XVIII. DISPUTE RESOLUTION 158) The dispute resolution procedure pr ovided by this Section shall be available to resolve all disputes arising under this Consent Decree, pr ovided that the Party invoking such procedure has first made a good fa ith attempt to resolve the matter with the other Party. 159) The dispute resolution procedure requir ed herein shall be invoked by one Party giving written notice to th e other Party advising of a dis pute pursuant to this Section. The notice shall describe the nature of the dispute and sh all 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 dis pute shall expeditiously schedule a meeting to discuss the dispute informally not later than fourteen (14) days following receipt of such notice. 160) Disputes submitted to dispute resolution under this Section shall, in the first instance, be the subject of informal ne gotiations among the disputing Parties. Such period of informal negotiations shall not exte nd beyond thirty (30) calendar days from the date of the first meeting among the disputing Parties’ representatives unless they agree in writing to shorten or extend th is period. During the info rmal negotiations period, the disputing Parties may also submit their disp ute to a mutually agreed upon alternative dispute resolution (“ADR”) foru m if the Parties agree thatthe ADR activities can be completed within the 30-day informal negotia tions period (or such longer period as the Parties may agree to in writing). 161) If the disputing Parties are unable to reach agreement during the informal negotiation period, Plaintiffs shall provide NIPSCO with a written summary of their

- 69 -position regarding the dispute. The written position provided by Pl aintiffs shall be considered binding unless, within forty-five (45) calendar days thereafter, NIPSCO seeks judicial resolution of the disput e by filing a petition with this Court. Plaintiffs may respond to the petition within forty-five (45) calendar days of filing. Intheir initial f ilings with the Court under this Paragraph, the di sputing Parties shall state thei r respective positions as to the applicable standard of law for resolving the particular dispute. The Court shall decide all disputes pursuant to applicable princi ples of law for resolving such disputes. 162) The time periods set out in this Sec tion may be shortened or lengthened upon motion to the Court of one of the Parties to the dispute, explai ning the Party’s basis for seeking such a scheduling modification. 163) This Court shall not draw any infere nces nor establish any presumptions adverse to any disputing Party as a result of invocation of this Sec tion or the disputing Parties’ inability to reach agreement. 164) As part of the resoluti on of any dispute under this Section, in appropriate circumstances the disputing Parties may agree, or this Court may order, an extension or modification of the schedule for the comp letion of the activitie s required under this Consent Decree to account for the delay that oc curred as a result of dispute resolution. NIPSCO shall be liable for stipulated penalties for its failure thereafter to complete the work in accordance with the extended or m odified schedule, provi ded that NIPSCO shall not be precluded from asserting that a Fo rce Majeure Event has caused or may cause a delay in complying with the exte nded or modified schedule.

- 70 -XIX. PERMITS AND SIP REVISIONS 165) Unless expressly stated ot herwise in this Consent Decree, in any instance where otherwise applicable law or this Cons ent Decree requires NIPSCO to secure a permit to authorize construction or operation of a ny device contemplated herein, including all preconstruction, construction, and operating permits requi red under state law, NIPSCO shall make such application in a timely manne r. EPA and the State of Indiana shall use their best efforts to review expeditiously all permit applications submitted by NIPSCO to meet the requirements of this Consent Decree. 166) Notwithstanding the previous paragraphs , nothing in this Consent Decree shall be construed to require NIPSCO to apply for, amend or obtain (1) a PSD or Nonattainment NSR permit or permit modifi cation for any physical change in, or any change in the method of operation of, any NI PSCO System Unit that would give rise to claims resolved by Section XII (Resolution of Claims) of this Consen t Decree; or (2) any Title V Permit or other operating permit or pe rmit modification, or application therefore, related to or arising from a ny physical change in, or change in the method of operation of, any NIPSCO System Unit that would give ri se to claims resolved by Section XII (Resolution of Claims) of this Consent Decree. 167) When permits are required as desc ribed in Paragraph 165, NIPSCO shall complete and submit applications for such permits to the appropriate authorities to allow time for all legally required processing and re view of the permit reque st, including requests for additional information by the permitting authorities. Any failure by NIPSCO to submit a timely permit application for NIPSCO Syst em Units shall bar any use by NIPSCO of

- 71 -Section XVI (Force Majeure) of this Consent Decree, wher e a Force Majeure claim is based on permitting delays. 168) 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 Consen t 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 XXI X (Conditional Termination of Enforcement Under Decree) of this Consent Decree. 169) Within one hundred and eighty (180) days after the Date of Entry of this Consent Decree, NIPSCO shall amend any T itle V permit application, or apply for modifications to its Title V permits to incl ude a schedule for implementation of all Annual System Tonnage Limitations, as well as all Unit-specific performance, operational, maintenance, and control technology require ments established by this Consent Decree including, but not limited to, any required 30- or 365-Day Rolling Average Emission Rate or Removal Efficiency and the requirements pertaining to the Surrender of Allowances. Any modifications to the Title V permits or Title V permit applications pursuant to this Paragraph shall include a provi sion that recognizes that any noncompliance with Annual System Tonnage Limitation requirements cons titutes a single violation for the NIPSCO System as a whole and does not create separate violations for each Unit or each facility within the NIPSCO System. 170) Within one (1) year from the Date of Entry of this Consent Decree, NIPSCO shall submit a written request that IDEM amend the Indiana SIP to incorporate all

- 72 -of the following Consent Decree requirements: performance, operational, maintenance, and control technology requirements; emission rates; removal effici encies; system-wide Annual Tonnage Limitations; allowance surrenders ; limits on use of emission credits; and operation, maintenance and optimization requirem ents. Such request shall include not only requirements related to particular Units in th e NIPSCO System but also those related to the NIPSCO System as a whole. 171) As soon as practicable, but in no event later than ninety (90) days after the Indiana SIP is amended to include the re quirements set forth in Paragraph 170 above, NIPSCO shall file a complete application to IDEM to incorporate th e requirements of the Indiana SIP, as amended, into the Title V operating permit for each Facility. In making such an application, NIPSCO shall request that the Title V operating permit for each Facility: (i) refer to the sec tion of the amended Indiana SIP that incorporates the systemwide requirements to comply with the A nnual System Tonnage Limitation for NOx in Table 4, and the Annual System Tonnage Limitation for SO 2 in Table 6; and (ii) include a provision that recognizes thatany noncompliance with any Annual System Tonnage Limitation constitutes a single violation for the NIPSCO System as a whole and does not create separate violations for each Unit or eachfacility within the NIPSCO System. The requirement to comply with the system-wide Annual System Tonnage Limitations for NOx and SO 2 shall continue to apply after the termination of the Consent Decree. 172) NIPSCO shall provide Plaintiffs w ith a copy of its request for SIP amendment (as requir ed in Paragraph 170, above) and its applications for Title V Permit modifications (as required in Paragraph 169 and 171, above), as well as a copy of any

- 73 -permit proposed as a result of such applicati on, to allow for timely participation in any public comment opportunity. 173) If NIPSCO sells or transfers to an entity unrelated to NIPSCO (“Third Party Purchaser”) part or all of its Ownershi p Interest in the NIPSC O System or individual Units, NIPSCO shall comply with the requirement s of Section XXII (Sales or Transfers of Ownership Interests) with regard to such Unit or Units prior to any su ch sale or transfer unless, following any such sale or transfer, NIPSCO remains the holder of the federally enforceable permit for such facility. XX. INFORMATION COLLEC TION AND RETENTION 174) Any authorized representative of the United States, including its attorneys, contractors, and consultants, upon presentation of credentials, shall have a right of entry upon the premises of any facility in the NIPSCO System 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 NIPSCO or its representatives, cont ractors, or consultants; and d. assessing NIPSCO’s compliance with this Consent Decree. 175) NIPSCO shall retain, and instruct its c ontractors and agents to preserve, all non-identical copies of all r ecords and documents (including records and documents in electronic form) now in its or its contractors’ or agents’ possession or control, and that directly relate to NIPSCO’s pe rformance of its obligations u nder this Consent Decree for

- 74 -the following periods: (a) until December 31, 2023, for records concerning physical or operational modifications that ar e subject to reopener provisi ons of Section XII, Subsection B of this Consent Decree; and (b) until Dece mber 31, 2019, for all other records. This record retention requirement shall apply re gardless of any corporate document retention policy to the contrary. 176) All information and documents submitted by NIPSCO pursuant to this Consent Decree shall be subj ect to any requests under appl icable law providing public disclosure of documents unless: (a) the information and documents are subject to legal privileges or protection; or (b) NIPSCO cl aims and substantiates in accordance with 40 C.F.R. Part 2 that the information a nd documents contain confidential business information. 177) Nothing in this Consent Decree shall limit the authority of the EPA to conduct tests and inspections at NIPSCO’s f acilities under secti on 114 of the Act, 42 U.S.C. § 7414, or any other applicable fede ral or state laws, regulations or permits. XXI. NOTICES 178) Unless otherwise provided herein, when ever notifications, submissions, or communications are required by this Consent D ecree, they shall be made in writing and addressed as follows:

As to the United States Department of Justice: Chief, Environmental Enforcement Section Environment and Natura l Resources Division U.S. Department of Justice P.O. Box 7611, Ben Franklin Station Washington, D.C. 20044-7611 DJ# 90-5-2-1-08417 - 75 -As to EPA : 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 George Czerniak Chief, Air Enforcement and Compliance Assurance Branch EPA Region 5 (AE-17J) 77 West Jackson St. Chicago, IL 60604

As to the State of Indiana: Phil Perry Indiana Department of Environmental Management Chief, Air Compliance Branch 100 North Senate Avenue MC-61-53, IGCN 1003 Indianapolis, IN 46204-2251 As to the Northern Indiana Public Service Company : Vice President, Operations NIPSCO 801 East 86 th Ave. Merrillville, IN 46410 and Chief Legal Officer NiSource, Inc. 801 East 86 th Ave. Merrillville, IN 46410

- 76 -179) All notifications, communications or submissions made pursuant to this Section shall be sent either by: (a) overnigh t mail or overnight deli very service; or (b) certified or registered mail, return receipt requested. All notifications, communications and transmissions sent by overnight, certified or registered mail shall be deemed submitted on the date they are postmarked. If sent by overn ight delivery service, they shall be deemed submitted on the date they are delivered to the delivery service. 180) Any Party may change the notice reci pient, the address for providing notices or the means of transmittal to it by serv ing the other Party with a notice setting forth such new notice recipient, such new address orsuch changed means of transmittal (e.g., to electronic format). XXII. SALES OR TRANSFERS OF OWNERSHIP INTERESTS 181) If NIPSCO proposes to sell or transf er any Ownership Interest in any System Unit to an entity unrelated to NIPSCO (“Third Party Purchaser”), it shall advise the Third Party Purchaser in writing of the existence of this Consen t Decree prior to such sale or transfer, and shall send a copy of such wr itten notification to Pl aintiffs pursuant to Section XXI (Notices) of this C onsent Decree at least sixty (60) days before such proposed sale or transfer. 182) No sale or transfer of an Ownership Interest shall take place before the Third Party Purchaser and EPA have executed, and the Court has approved, a modification pursuant to Section XXV (Modification) of th is Consent Decree making the Third Party Purchaser a party to this Consent Decree and jointly and severally liable with NIPSCO for all the requirements of this Decree that may be applicable to the tr ansferred or purchased Ownership Interests.

- 77 -183) This Consent Decree shall not be construed to impede the transfer of any Ownership Interests between NIPSCO and a ny Third Party Purchaser so long as the requirements of this Consent Decree are met. This Consent Decree sh all not be construed to prohibit a contractual allo cation as between NIPSCO and a ny Third Party Purchaser of Ownership Interests of the burdens of complia nce with this Decree, provided that both NIPSCO and such Third Party Purchaser shall remain jointly and severally liable to EPA for the obligations of the Decree applicable to the transferred or purchased Ownership Interests. 184) If EPA agrees, EPA, NIPSCO, and the Third Party Purchaser that has become a party to this Consent Decree, pursuant to Paragraph 182, may execute a modification that relieves NIPSC O of its liability under this Consent Decree for, and makes the Third Party Purchaser liable for, all ob ligations and liabilities applicable to the purchased or transferred Ownership Interests. Notwithstanding the foregoing, however, NIPSCO may not assign, and may not be released from, any ob ligation under this Consent Decree that is not specific to the purchased or transferred Ownership Interests, including the obligations set forth in Sections X (Envi ronmental Mitigation Projects) and XI (Civil Penalty). NIPSCO may propose a nd EPA may agree to restrict the scope of the joint and several liability of any purchaser or transfer ee for any obligations of this Consent Decree that are not specific to the tran sferred or purchased Ownership In terests, to the extent such obligations may be adequately separated in an enforceable manner. 185) Paragraphs 182 and 184 of this Consen t Decree does not apply if an Ownership Interest is sold or transferred solely as collateral security in order to consummate a financing arrangement (not incl uding a sale-leaseback), so long as NIPSCO:

- 78 -(a) remains the operator (as that term is usedand interpreted under the Clean Air Act) of the NIPSCO System Units; (b) remains subj ect to and liable for all obligations and liabilities of this Consent Decree; and (c) supp lies Plaintiffs with the following certification within 30 days of the sale or transfer:

Certification of Change in Ownershi p Interest Solely for Purpose of Consummating Financing . We, the Chief Executive Officer and General Counsel of the Northern Indiana Public Service Co., jointly certify under Title 18 U.S.C. section 1001, on our own behalf and on behalf of Northern Indiana Public Service Co. (“NIPSCO”), that any change in NI PSCO’s Ownership Interest in any Unit that is caused by the sale or transfer as collateral security of such Ownership Interest in such Unit(s) pursuant to the financing agreement consummated on [insert applicable date] between NIPSCO a nd [insert applicable entity]: (a) is made solely for the purpose of providing collateral security in order to consummate a financing arrangement; (b) does not impair NIPSCO’s ability, legally or otherwise, to comply timely with all terms and provisions of the Consent Decree entered in United States of America v. Northern Indiana Public Service Co.. , Civil Action No. ___________; c) does not affect NIPSCO’s operational control of any Unit covered by that Consent Decree in a manner that is inconsistent with NIPS CO’s performance of its ob ligations under the Consent Decree; and d) in no way affects the status of NIPSCO’s obligations or liabilities under that Consent Decree. XXIII. EFFECTIVE DATE 186) The effective date of this Consent D ecree shall be the Date of Entry as defined by Paragraph 19. If this Consent D ecree is not entered by th e Court in the form presented to the Court or the United States or the State of Indiana w ithhold consent to this Consent Decree before filing, its terms shall be null and void and the Parties shall have no obligation or rights hereunder and the terms of this Consent Decree shall not be used as evidence in any litigation be tween or among the parties to the Consent Decree. XXIV. RETENTION OF JURISDICTION 187) The Court shall retain jurisdiction of th is case after entry of this Consent Decree to enforce compliance w ith the terms and conditions of this Consent Decree and to

- 79 -take any action necessary or appropriate fo r 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 C ourt for any relief nece ssary to construe or effectuate this Consent Decree. XXV. MODIFICATION 188) The terms of this Consent Decree may be modified only by a subsequent written agreement signed by the Plaintiffs and NIPSCO. Where the modification constitutes a material change to any term of this Consent D ecree, it shall be effective only upon approval by the Court. XXVI. GENERAL PROVISIONS 189) 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 fo rth herein do not relieve Defendant from any obligation to comply with other state and federal requirements under the Clean Air Act, including Defendant’s obligation to satisfy a ny state modeling requirements set forth in the Indiana State Implementation Plan. 190) This Consent Decree does not apply to any claim(s) of alleged criminal liability. 191) In any subsequent administrative or judicial action initiated by Plaintiffs for injunctive relief or civil penalties relating to the facilities covered by this Consent Decree, Defendant shall not a ssert any defense or claim based upon principles of waiver, res judicata, collateral estoppe l, issue preclusion, claim precl usion, or claim splitting, or any other defense based upon the contention that the claims raised by Plaintiffs in the

- 80 -subsequent proceeding were brought, or shoul d have been brought, in the instant case; provided, however, that nothing in this Paragraph is intended to affect the validity of Section XII (Resolution of Claims). 192) Except as specifically provided by this Consent Decree, nothing in this Consent Decree shall relieve Defendant of its obligation to comply with all applicable federal, state, and local laws and regulations . Subject to the provi sions in Sections XII (Resolution of Claims), nothing contained in this Consent Decree sh all be construed to prevent or limit the rights of Plaintiffs to obtai n penalties or injunctive relief under the Act or other federal, state, or local statutes, regulations, or permits. 193) Every term expressly defined by th is 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 D ecree that is also a term under the Act or the regulations implementing the Ac t shall mean in this Consent Decree what such term means under the Act or those implementing regulations. 194) Nothing in this Consent Decree is inte nded to, or shall, alter or waive any applicable law (including but not limited to any defenses, entitlements, challenges, or clarifications related to the Credible Ev idence Rule, 40 C.F.R. § 52.12(c) (62 Fed. Reg. 8314; Feb. 24, 1997)) concerning the use of data for any purpose under the Act. 195) Each limit and/or other requirement established by or under this Consent Decree is a separate, independent requirement. 196) Performance standards, emissions lim its, and other quant itative standards set by or under this Consent D ecree must be met to the numbe r of significant digits in which the standard or limit is expresse d. For example, an Emission Rate of 0.070

- 81 -lb/mmBTU is not met if the actual Emi ssion Rate is 0.071 lb/mmBTU. NIPSCO shall round the fourth significan t digit to the nearest th ird 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 di gits. For example, if an actual Emission Rate is 0.0704, that shall be reported as 0.070, and shall be in compliance with an Emission Rate of 0.070, and if an actual Emission Rate is 0.0705, that sh all be reported as 0.071, and shall not be in compliance with an Emission Rate of 0.070. NIPSCO shall report data to the number of significant digits in which the standard or limit is expressed. 197) This Consent Decree does not limit, en large or affect the rights of any Party to this Consent Decree as against any third parties. 198) This Consent Decree constitutes the final, complete and exclusive agreement and understanding among the Parties w ith respect to the settlement embodied in this Consent Decree, and supercedes all pr ior agreements and understandings among the Parties related to the subject matter herein. No document, representation, inducement, agreement, understanding, or promise constitute s any part of this Consent Decree or the settlement it represents, nor shall they be used in construing the terms of this Consent Decree. 199) Each Party to this action shall bear its own costs and attorneys’ fees. 200) The Parties expressly recognize that whenever this Consent Decree specifies that a 30- Day Rolling Average Emission Rate or a 30-Day Rolling Average Removal Efficiency shall be achieved and/or maintained commencing or starting by or no later than a certain day or date, then complia nce with such Rate or Removal Efficiency shall commence immediately upon the date spec ified, and that compliance as of such

- 82 -specified date (e.g. December 30) shall be dete rmined based on data from that date and the 29 prior Unit Operating Days (e.g. December 1-29). 201) The Parties expressly recognize that whenever this Consent Decree specifies that a Monthly SO 2 Removal Efficiency shall be achieved and/or maintained at Bailly commencing or starting by or no later than a certain month, then that certain month shall be the first month include d in the specified Monthly SO 2 Removal Efficiency (e.g., where the Decree specifies that a 95% Monthly SO 2 Removal Efficiency is to be achieved and maintained no later than January 2011, then January 2011 shall be the first month included in the first Monthly SO 2 Removal Efficiency period, and no day or month prior to January 2011 shall be subject to the Monthly SO 2 Removal Efficiency requirement or included in any calculation to determine compliance with suchremoval efficiency). 202) The Parties expressly recognize that whenever this Consent Decree specifies that a 365-Day Rolling Average Emission Rate shall be achieved and/or maintained commencing or starting by, on, or no la ter than a certain day or date, then that certain day or date, if it is an Operating Day, or if it is not an Operating Day then the first Operating Day thereafter, shall be the first day subject to that sp ecified 365-Day Rolling Average Emission Rate (e.g., if the specified 365-Day Rolling Average Emission Rate is to be achieved and maintained from January 1, 2014 through December 31, 2014, and January 1, 2014 is an Operating Day, then January 1, 2014 shall be the first day included in the first 365-Day Rolling Average Emission Rate period, and no day prior to January 1, 2014 shall be subject to that specified 365-Day Rolling Average Emission Rate requirement or included in any calculation to determine compliance with such rate).

- 83 -XXVII. SIGNATORIES AND SERVICE 203) Each undersigned representative of the Parties certifies that he or she is fully authorized to enter in to the terms and conditions of this Consent Decree and to execute and legally bind to this docume nt the Party he or she represents. 204) This Consent Decree may be signed in counterparts, and such counterpart signature pages shall be gi ven full force and effect. 205) Each Party hereby agrees to accept serv ice 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 includi ng, but not limited to, service of a summons. 206) Unless otherwise ordered by the Court, the Plaintiffs agree that the Defendant will not be required to file any answer or other pleading responsive to the Complaint in this matter until and unless the Cour t expressly declines to enter this Consent Decree, in which case Defendant shall have no le ss than thirty (30) days after receiving notice of such express declina tion to file an answer or ot her pleading in response to the Complaint. XXVIII. PUBLIC COMMENT 207) The Parties agree and acknowledge that final approval by the United States and entry of this Consent Decree is s ubject 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 c onsiderations which indi cate that the Consent Decree is inappropriate, improper or inadequate . Defendant shall not oppose entry of this

- 84 -Consent Decree by this Court orchallenge any provision of th is Consent Decree unless the United States or the State of Indiana has no tified Defendant, in wr iting, that the United States or the State of Indiana no longer supports entry of the Consent Decree. XXIX. CONDITIONAL TERMINATION OF ENFORCEMENT UNDER DECREE 208) Termination as to Completed Tasks . As soon as NIPSCO completes a construction project or any other requirement of this Consent Decree th at is not ongoing or recurring, NIPSCO may, by motion to this Court, seek termination of the provision or provisions of this Consent Decree that imposed the requirement. 209) Conditional Termination of Enfor cement Through the Consent Decree

. After NIPSCO:

a. has successfully completed construction, and has maintained operation, of all pollution controls as requi red by this Consent Decree; b. has obtained final permits and SIP revisions that incorporate the requirements of this Consent Decree, as enforceable permit terms or enforceable SIP terms, of all of the Unit performance and other requirements specified in Section XIX (Permits and SIP Revisions) of this Consent Decree; and

c. certifies that the date is later than December 31, 2018, then NIPSCO may so certify these facts to Plaintiffs and this Court. If Plaintiffs do not object in writing with specific reasons within forty-five (45) da ys of receipt of NIPSCO’s certification, then, for any C onsent Decree violations that occur after the filing of notice, Plaintiffs shall pursue enforcement of the requirements contained in the Indian a SIP and Title V permit through the

- 85 -APPENDIX A: ENVIRONMENTA L MITIGATION PROJECTS In compliance with and in addition to the re quirements in Section XI of this Consent Decree (Environmental Mitigation Projects), NIPS CO shall comply with the requirements of this Appendix to ensure that the benefits of the $9.5 million in federally directed Environmental Mitigation Projects (Projects) are achieved. I. Overall Environmental Projects Schedule A. Within the specified time delineated fo r each Project, as further described below, NIPSCO shall submit proposed Project plan(s) to EPA for review and approval pursuant to Section XIV of the Consent Decree (Review and Approval of Submittals) for expenditure of the Project Dollars specified in this Appendix in accordance with the deadlines established in this Appendix. EPA shall determine, prior to approval , that all Projects are consistent with federal law. B. Beginning one hundred and twenty (120) days from the Date of Entry, and continuing annually thereafter until completion of each Proj ect (including any applicable periods of demonstration or testing), NIPSCO shall provide EPA with written reports detailing the progress of each Project, including an accounting of Project Dollars spent to date. C. All proposed Project plans shall include the following: 1. A plan for implementing the Project; 2. A summary-level budget for the Project; 3. A time-line for implementation of the Project; and 4. A description of the anticipated environmen tal benefits of the Project, including an estimate of emission reductions (e.g., SO 2 , NOx, PM, CO2) expected to be realized. D. Upon approval by EPA of the plan(s) required by this Appendix, NIPSCO shall complete the approved Project(s) according to the approvedplan(s). Nothing in th is Consent Decree shall be interpreted to prohibit NI PSCO from completing the Projec t(s) ahead of schedule. E. In accordance with the requirements of Paragraph 114, within 60 days following the completion of each Project, NIPSCO shall submit to EPA for approval a report that documents: 1. The date the Project was completed; 2. The results of implementation of the Projec t, including the estimated emission reductions or other environmental be nefits achieved; and 3. The Project Dollars incurred by NIPSCO in implementing the Project.

1II. Environmental Mitigation Projects A. Clean Diesel Retrofit Project 1. Within 120 day of the Date of Entry, NIPSCO shall propose to EPA for review and approval a plan, in consultation with IDEM , to retrofit in-service diesel engines with emission control equipment further described in this Section, designed to reduce emissions of particulates and/or ozone precu rsors (the “Clean Diesel Retrofit Project”) and to fund the operation and maintenance of the retrofit equipmen t for the time-period described below. The Project shall in clude, where necessary, techniques and infrastructure needed to support such retrof its. NIPSCO shall ensure, or direct any third party contractor or partner to ensure, that the recipients operate and maintain the retrofit equipment for five years from the date of installation by providing funding for operation and maintenance as described in Section II.A.2.g, below. 2. In addition to the requirements of Secti on I. C. of this Appendix, the plan shall also satisfy the following criteria:

a. Involve vehicles based in and e quipment located in NIPSCO’s service territory in northern Indi ana, bordered by the cities of Gary-Hammond, Michigan City, South Bend-Elkhart , and Fort Wayne. b. Provide for the retrofit of public dies el engines with EPA or California Air Resources Board (“CARB”) verified emissi ons control technologies to achieve the greatest reasonably possible mass reduc tions of particulat es and/or ozone precursors for the fleet(s) that participate( s) in the Clean Diesel Retrofit Project. Depending upon the particular EPA or CARB verified emissions control technology selected, the retrof it diesel engines will be expected to achieve emission reductions of particulates and/or ozone precurs ors by 30%-90%.

c. Describe the process NIPSCO will use to determine the most appropriate emissions control technology for each particular diesel engine that will achieve the greatest reasonably possible mass re duction of particulat es and/or ozone precursors. In making this determinati on, NIPSCO must take into account the particular operating crite ria required for the EPA or CARB verified emissions control technology to ac hieve the verified emissions reductions. d. Provide for the retrofit of diesel engi nes with either: (a) diesel particulate filters (DPF); (b) diesel oxidation catal ysts (DOC); or (c) closed crankcase ventilation systems with either DPF or DOC.

e. Describe the process NIPSCO will use to notify fleet operators and owners within the geographic area spec ified in Section II.A.2.a that their fleet of vehicles may be eligible to participate in the Cl ean Diesel Retrofit Project and to solicit their interest in participating in the Project.

2f. Describe the process and criteria NI PSCO will use to select the particular fleet operator and owner to participate in this Project, consistent with the requirements of this Section.
g. For each of the recipient fleet owne rs and operators, describe the amount of Project Dollars that will cover the co sts associated with: (a) purchasing the verified emissions control technology, (b ) installation of the verified emissions control technology (including datalogging), (c) training costs associated with repair and maintenance of the verifiedemissions control technology (including technology cleaning and proper disposal of waste generated from cleaning), and (d) the incremental costs for repair and maintenance of the retrofit equipment (i.e., DPF, DOC, closed crankcase ventilation sy stem) for five years from the date of installation, including the costs associated with the proper disposal of the waste generated from cleaning the verified emi ssions control technology. This Project shall not include costs for normal repair or operation of the re trofit diesel fleet. Include a mechanism to ensure that recipients of the retrofit equipment will bind themselves to follow the operating criteriarequired for the verified emissions control technology to achiev e the verified emissions reductions and properly maintain the retrofit equipment installed in connection with the Project for the period beginning on the date the installation is complete through December 31, 2015. h. Describe the process NIPSCO will use for determining which diesel engines in a particular fleet will be retrofitted with the verified emissions control technology, consistent with the crite ria specified in Section II.A.2.b. i. Ensure that recipient fleet owners and/or operators, or their funders, do not otherwise have a legal oblig ation to reduce emissions th rough the retrofit of diesel engines. j. For any third party with whom NIPS CO might contract to carry out this Project, establish minimum standards th at include prior e xperience in arranging retrofits, and a record of prior ability to interest and organize fleets, school districts, and community groups to join a clean diesel program. k. Direct the recipient fleet(s) to co mply with local, state, and federal requirements for the disposal of the wast e generated from the verified emissions control technology and follow CARB’s guidanc e for the proper disposal of such waste, provided however, that NIPSCO sha ll not be a guarantor of or responsible for the actions or omissi ons of the recipients. l. Include a schedule and budget for co mpleting each portion of the Project, including funding for operation and mainte nance of the retrofit equipment through December 31, 2015.

33. In addition to the information required to be included in th e report pursuant to Section I.C, NIPSCO shall also describe th e fleet owner/operator; where it implemented this Project; the particular types of verifi ed emissions control technology (and the number of each type) that it in stalled pursuant to this Project; the type, year, and horsepower of each vehicle; an estimate of the number of citi zens affected (if applicable) by this Project, and the basis for this estimate; and an estimate of the emission reductions for Project or engine, as appropriate (using the manufacturer ’s estimated reductions for the particular verified emissions control technology), including particulates, hydrocarbons, carbon monoxide, and nitrogen oxides. B. Wood Stove and Wood Outdoor Boiler Changeout Project 1. Within 120 days of the Date of Entry, NIPSCO shall propose a plan to sponsor a Wood-burning Changeout and Retrofit Project (“Wood Stove/Boiler Changeout and Retrofit Project”) that a state or local government agency (“ air pollution control agency”) or third-party non-profit will agree to implem ent in an area that would benefit from reductions of fine particle pollution and/or hazardous air polluta nts by replacing, or retrofitting or upgrading ine fficient, higher polluting w ood-burning stoves and outdoor boilers with Energy Star qua lified Heat Pumps, EPA Phas e 2 hydronic heaters, natural gas boilers of 90% or higher AFUE, natura l gas furnaces of 92% or higher AFUE or EPA-certified wood-stoves and/or cleaner burning, more energy-efficient hearth appliances (e.g., wood pellet, gas, or propane stove). 2. Any Wood Stove/Boiler Changeout and Retrofit Project th at NIPSCO sponsors shall provide educational information (incl uding, energy efficiency, health and safety benefits, and outreach regarding cleaner-burni ng alternatives and proper operation of the new technology) and incentives through rebates, discounts, or in some instances, actual replacement of the old technology wood-burning stoves or boilers for income-qualified residential homeowners, to encourage resident ial homeowners to replace their old, higher polluting and less energy efficien t wood stoves or outdoor boilers. 3. NIPSCO shall sponsor the implementati on of any Wood Stove/Boiler Changeout and Retrofit Project in NIPSCO’s service ar ea(s) in northern Indi ana, bordered by the cities of Gary-Hammond, Mi chigan City, South Bend-Elkha rt, and Fort Wayne that promise significant environmental benefit from the Wood Stove/Boiler Changeout and Retrofit Project. The Wood Stove/Boiler Ch angeout and Retrofit Project shall also include the counties of LaPorte, Lake, and Port er. In determining the specific areas to implement this Project within the aforemen tioned geographic area, NIPSCO shall give priority to areas with high amounts of air po llution, especially particle pollution and/or hazardous air pollutants, areas located within a geography and topography that makes it susceptible to high levels of particle polluti on, or areas that have a significant number of old and/or higher polluting wood-bur ning stoves or outdoor boilers. 4. The air pollution control agency(ies) a nd/or non-profit(s) that NIPSCO selects shall consult with EPA’s wood smoke t eam and implement any Wood Stove/Boiler Changeout and Retrofit Project consistent w ith the materials available on EPA’s Burn
4Wise website at http://www.epa.gov/burnwise

. 5. In addition to the requirements of Secti on I.C , any plan to implement this Project shall also satisfy the following criteria:

a. Identify the air polluti on control agency(ies) and/ or non-profit(s) selected to implement the Wood Stove/Boiler Changeout and Retrofit Project. b. Describe the schedule and budgetary increments in which NIPSCO shall provide the necessary funding to the air pollution control agency(ies) and/or non

profits(s) to implement any Wood Stove/B oiler Changeout and Retrofit Project.

c. Ensure that the air pollution control agency(ies) and/or non-profit(s) will implement any Wood Stove/Boiler Change out and Retrofit Proj ect in accordance with the requirements of this Appendix, a nd that the Project Dollars will be used to support the actual replacement, upgrade or retrofit of stoves/boilers currently used as the primary or secondary source of residential heat with a cleaner, more energy efficient stove/boiler (i.e., geotherm al heat pump, wood pellet stove, EPAcertified wood stove, gas stove, EPA Phase 2 qualified hydronic heater, natural gas boiler of 90% or higher AFUE, natura l gas furnace of 92% or higher AFUE or propane stove). To enable the project to carry on in the future , funds may be used to support changeout/upgrades through re volving loan programs or other lowinterest loan programs. NIPSCO shall limit the use of Project Dollars for administrative costs associated with implementation of the program to no greater than 10% of the Project Dollars NIPSCO provides to a specific air pollution control agency and/or non-pr ofit. Up to 7% can be used for personnel cost and the remaining 3 % for other (e.g., outreach materi als, training, studies/surveys, travel) project support costs. d. Describe all of the elements of any Wood Stove/Boiler Changeout and Retrofit Project that the ai r pollution control agency(ies ) and/or nonprofit(s) will implement. NIPSCO shall describe and es timate the number of energy efficient appliances it intends to make available, the cost per unit, an d the criteria the air pollution control agency(ies) and/or nonpr ofit(s) will use to determine which residential homeowners should be eligible for actual stove replacement.

e. If applicable, identify any orga nizations with which the air pollution control agency(ies) and/or non-profit(s) will partner to implement the Project, including such organizations as: the Hearth, Patio, and Barbecue Association of America, the Chimney Safety Institute of America, a local chapter of the American Lung Association, individual stov e retailers, propane dealers, facilities that will dispose of old st oves so that they cannot be resold or reused, housing assistance agencies, local fire department s, local health organizations, and local green energy organizations.

5f. Describe how the air pollution control agency(ies) and/or non-profit(s) will ensure that the old and/or higher polluting wood-burningstove/boiler will be properly recycled or disposed. C. Land Acquisition and Restorati on Project in Northwest Indiana 1. Within 45 days from the Date of En try, NIPSCO shall establish a stakeholder process to solicit input into the funding of land acquisition or restoration Project(s) of lands adjacent to, or near, the Indiana Dune s National Lakeshore, and may include other lands in the northwest Indiana area, potentia lly affected by emissions form one or more of the NIPSCO Units. The stakeholder pr ocess will consist of a maximum of five members and, at minimum, shall include a representative from The Indiana Dunes National Lakeshore, a representative from I ndiana Department of Natural Resources, and a representative from an environmental orga nization such as the Nature Conservancy. 2. The goal of this Project will be th e protection through acquisition and/or restoration of ecologically significant land, watersheds, vegetation, and forests within northwest Indiana using adap tive management techniques de signed to improve ecosystem health and mitigate harmful effects from air pollution. For purposes of this Appendix and Section XI of this Consent Decree (Environm ental Mitigation Projec ts), land acquisition means purchase or transfer of interests in land, including fee ownership, easements, or other restrictions that run with the land that provide for perpetual protection of the acquired land. The transfer of property or land interests by NIPSCO to any governmental or nongovernmental organization sh all be credited at fair ma rket value and must provide for perpetual protection of the land. Restoration may in clude, by way of illustration, direct reforestation (particularly of tree spec ies that may be affected by acidic deposition) and soil enhancement. Any restoration action mu st also incorporate the acquisition of an interest in the restored lands sufficient to ensure perpetual protection of the restored land, unless the land restored is already under the ow nership of a governmental entity that has a legal duty to conserve the land in perpetu ity. Any proposal for acquisition of land must identify fully all owners of the interests in the land. Every propos al for acquisition or transfer of land must identify the ultimate holder of the interest s to be acquired andprovide a basis for concluding that the proposed holder of title is appropriate for longterm protection of the ecological and/or en vironmental benefits sought to be achieved through the acquisition. 3. The Project(s) will focus on lands adjacen t to, or near, the Indiana Dunes National Lakeshore, and may include other lands inthe northwest Indiana area, potentially affected by emissions from one or more of the NIPSCO Units. Examples of Projects include:

a. Acquire and Restore Disturbed Land at NIPSCO Michigan City Plant and Crescent Dune Area: Funding this Proj ect would provide for acquisition, cleanup, invasive species control, and restorati on of approximately 246 acres at and around the NIPSCO Michigan City site; and

6b. Acquire, Restore, and Donate Land Adjacent to Indiana Dunes National Lakeshore: Funding for this Project woul d provide for acquisition and restoration of lands adjacent to the Nati onal Lakeshore and would include the transfer of title to such lands, or the granting of an easement over such lands, to the National Park Service

. 4. Within one year of Date of Entry of this Consent Decree, through the stakeholder process described in II.C.1 above, NIPSCO will identify and provide recommendations for specific Projects to EPA for approval

. D. Funding Obligations for Section II Environmental Projects 1. Within three years of the Date of Entry of this Consent Decree, NIPSCO will have completed the expenditure of a minimum of $3,500,000 to fund and implement the approved Clean Diesel and Wood Stove Changeout Projects as describe d in II.A and II.B. NIPSCO shall retain the discretion to dete rmine how best to allocate the minimum $3,500,000 in Project Dollars between the approved Clean Diesel and Wood Stove Changeout Projects. 2. Within three years of the Date of En try of this Consent Decree, NIPSCO will have completed the expenditure of a minimum of $1,500,000 and a maximum of $2,000,000 to fund and implement the approve d Land Acquisition and Restoration Project as described in II.C. III. Additional Environmental Mitigation Projects A. Within 1 year of the Date of Entry, as further described below, NIPSCO shall submit proposed Project plan(s) to EPA for review and approval pursuant to Section XIV of the Consent Decree (Review and Approval of Submittals) for e xpenditure of the remaining Project Dollars over a period of not more than five years from the Date of Entry, except as provided below. NIPSCO shall not spend more than $2 million of the remaining Project Dollars on a single project in this Section III “Add itional Environmental Mitigation Pr ojects.” The Parties agree, subject to the requirements of this Appendix, thatNIPSCO may in its disc retion decide which of the Projects specified in Sections III.C, and D, of this Appendix to propose for EPA approval. NIPSCO may, at its election, conso lidate the plans required by this Appendix into a single plan. In addition, NIPSCO may propose during the five year period to make amendments or modifications to the plan or plans for EPA review and approval. NIPSCO has no current obligation to undertake any of the Projects described below in Sections III.C, D, and E. B. The Parties agree that NIPSCO is entitled to spread its payments for Projects over the five-year period commencing upon the Date of En try. NIPSCO is not, however, precluded from accelerating payments to better effectuate a pr oposed mitigation plan, provided that NIPSCO shall not be entitled to any reduction in the nominal amount of the required payments by virtue of the early expenditures. EPA shall determine prio r to approval that all Projects are consistent with federal law.

7C. Hybrid Fleet Project 1. NIPSCO may elect to submit a plan for a hybrid and/or electric fleet project to reduce emissions from NIPSCO’s fleet of moto r vehicles. NIPSCO has a substantial fleet of motor vehicles where it operates. Thes e motor vehicles are generally powered by conventional diesel or gasoline engines and in clude vehicles such as diesel “bucket” trucks. The use of hybrid engine technologi es in NIPSCO’s motor vehicles, such as diesel-electric engines, will improve fuel efficiency and reduce emissions of NO X , PM, VOCs, and other air pollutants. 2. As part of any plan for the Hybrid Fl eet Project, assuming that NIPSCO elects to undertake this Project, NIPSCO may elect to spend Project Dollars on the replacement of conventional motor vehicles in its fleet w ith newly manufactured hybrid and/or electric vehicles. 3. In addition to the requirements of Section I .C of this Appendix, any plan for the Hybrid Fleet Project shall:

a. Propose the replacement of convention diesel engi nes in bucket trucks or other mobile sources with hybrid or el ectric engines, and/or propose the replacement of portions of NIPSCO’s fl eet (including cars, vans, and pickup trucks) with hybrid and/or electric vehicles . For purposes of this subsection of this Appendix, “hybrid and/or electric vehicl e” means a vehicle that can generate and/or utilize electric power to reduce the vehicles consump tion of diesel or gasoline fuel. Any such vehicle proposed fo r inclusion in the Hybrid Fleet Project shall meet all applicable engine standards, certifications, and/or verifications. b. Propose a method to account for the am ount of Project Dollars that will be credited for each replacement made under subparagraph (a) above, taking into account the incremental cost of such engines or vehicles as compared to conventional engines or vehicles and potential savings associated with the replacement;

c. Prioritize the replacement of diesel- powered vehicles in NIPSCO’s fleet. Certify that NIPSCO will use the Hybrid Ve hicles for their useful life (as defined in the proposed Plan). 4. Notwithstanding any other provision of this Consent Decree, including this Appendix, NIPSCO shall only receive credit toward Project Dollars for the incremental cost of hybrid and/or electric vehicles as co mpared to the cost of a newly manufactured, similar motor vehicle powered by conven tional diesel or gasoline engines.

8D. Electric Vehicle Infrastructure Enhancement 1. NIPSCO may undertake enhancements to the electric vehicle charging infrastructure by funding creation of one or more charging stati ons for electric vehicles in the Northwest Indiana area bordered by the c ities of Gary-Hammond, Michigan City, South Bend-Elkhart, and Fort Wayne. Batter y powered and some hybrid vehicles need plug-in infrastructure to recharge the batteries . Establishment of electric vehicle charging stations in Northwest Indiana c ould expand the useful driving range of elec tric vehicles in the Chicago metropolitan area as well as encourage Northwest Indiana drivers to purchase electric vehicles for local use as we ll as commutes to Chicago. Locations for such charging stations would be targeted for areas where vehicles could be left for several hours to fully charge the electric vehicle’s battery system. 2. If NIPSCO elects to undertake this Pr oject, it may partner with third party organizations (e.g., NIRPC, SSCC) to handl e funding and selection of locations in Northwest Indiana. Locations would be sought to maximize the number of vehicles that could utilize the chargers while striving to expand into Northwest Indiana the network of electric vehicle charging stations currently in the Illinois portion of the greater Chicago metropolitan area. Potential sites could consis t of locations that provide public access, including parking lots at mass transit terminals/stops (such as South Shore Commuter Rail stations, RDA bus stops), large industrial facilities or similar employers (NIPSCO, Methodist Hospital, steel mills), residences , and and shopping malls in Lake and Porter counties. 3. Emission reductions - overall emi ssions reductions would depend upon the number of vehicles utilizing the facilities and would be base d upon the type of vehicle the electric vehicle replaces in the general geogr aphic area, the emissions characteristics and the annual vehicle miles trav eled (VMT). For the term of this project NIPSCO would commit to effectively supply the vehicle char ging station with zero emission renewable energy sources through the use of renewable en ergy credits (RECs). Therefore the usage would be considered emission free. NIPSCO will report the expected and achieved environmental benefits. 4. NIPSCO may consider and implement a dditional options to enhance electric vehicle usage, such as to:

a. Provide a purchase incentive for ac quisition of plug-in hybrid electric vehicle (PHEV), pure battery electric ve hicle (EV), or lesser incentive to a conventional vehicle converted to a plug-in b. Fund low-interest loans through banks and dealers for plug-in vehicles

c. Provide direct cash incentives to consumers for vehicle purchase.

9E. Residential and Commercial Electr ic to Natural Gas Conversion Project 1. NIPSCO may submit a plan to EPA to implement a Residential and Commercial Electric to Natural Gas Convers ion Project (“Conversion Proj ect”) to reduce life cycle SO 2 , NOx, and PM and other air emissions resulting from residential and commercial space and water heating energy usage. If NIPSCO elects to pe rform this Conversion Project, the Conversion Project will consist of specific measures that wi ll produce long-term, permanent, environmental benefits by the removal and replacement of electric resistance furnaces and water heaters with new high efficiency natural gas fu rnaces (92% or higher AFUE) a nd natural gas water heaters. The reduction in emissions of SO 2 , NOx, PM, and other air emissions would occur based on the more efficient energy delivery by natural gas compared to electricity (approximately 92% delivery efficiency for natural gas versus 32% deliv ery efficiency for electricity) and the use of inherently cleaner burning natura l gas compared to the overall predominance of coal based fuels in this subregion. The Conversion Projectwill be performed in and demonstrate SO 2 , NOx, PM and other air emission benefits to communities in northern Indiana, bordered by the cities of Gary-Hammond, Michigan City, South Bend-Elkhart, and Fort Wayne area and provide benefits beyond what is required of NIPSCO under any In diana Utility Regulat ory Commission state

wide mandate. 2. If NIPSCO elects to undertake this C onversion Project, it may partner with third party organizations to handle funding and selectio n of residences and commercial establishments for the removal of electric resistance furnaces and water heaters and replacement with natural gas-fired units.

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