____________________________________ 

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 DECREE 
TABLE OF CONTENTS
 

I. Jurisdiction and Venue.........................................................................................................3 
 

II. Applicability ........................................................................................................................4 
 

III. Definitions............................................................................................................................5 
 

IV. NOX Emission Reductions and Controls ...........................................................................16 
 

A. NOX Emission Controls .........................................................................................16 
 

B. General NOx Provisions.........................................................................................19 
 

C. Annual System Tonnage Limitation for NOx ........................................................19 
 

D. Use and Surrender of NOx Allowances .................................................................21 
 

V. SO2 Emission Reductions and Controls .............................................................................25 
 

A. SO2 Emission Controls ..........................................................................................25 
 

B. General SO2 Provisions ....................................................................................... .29 
 

C. Annual System Tonnage Limitation for SO2 ....................................................... .29 
 

D. Use and Surrender of SO2 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 or Offsets from Required Controls...................................37 
 

IX. PM and Mercury Continuous Emissions Monitoring Systems (CEMS) ...........................38 
 

X. Environmental Mitigation Projects ....................................................................................41 
 

XI. Civil Penalty.......................................................................................................................43 
 

XII. Resolution of Past and Future Claims................................................................................45 
 

A. Resolution of Plaintiffs’ Civil Claims....................................................................45 
 

B. Pursuit of Plaintiffs’ Civil Claims Otherwise Resolved ........................................47 
 

i 
XIII. 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: Environmental Mitigation Projects 
 

ii 
WHEREAS, Plaintiff, the United States of America (“the United States”), 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 and 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 Administrative Code sections 2-2 and 2-7, alleging that Defendant, 

Northern Indiana Public Service Co. (“NIPSCO”), has undertaken construction 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), alleging violations at the 

Michigan City, Rollin M. Schahfer, and Bailly Generating Stations of: 

(a) the PSD provisions in Part C of Subchapter I of the Act, 42 U.S.C. §§ 7470-92, 

(b) the Nonattainment New Source Review requirements 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; 

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WHEREAS, NIPSCO has been the owner and operator 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 the controls necessary under the Act to reduce sulfur dioxide, 

nitrogen oxides, and/or particulate matter emissions, and that such emissions can damage human 

health and the environment; 

WHEREAS, Plaintiffs’ Complaint states claims upon which, if proven, relief can be 

granted against NIPSCO under Sections 113 and 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 violations 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, injunctive or other relief; 

WHEREAS, the Plaintiffs and the Defendant (collectively “the Parties,” and each, 

individually, a Party) anticipate that the installation and operation of pollution control equipment 

pursuant to this Consent Decree will achieve significant reductions of sulfur dioxide (“SO2”), 

nitrogen oxides (“NOx”), and particulate matter (“PM”) emissions and improve air quality; and 

WHEREAS, the Parties have agreed, and the Court by entering this Consent Decree 

finds, that this Consent Decree has been negotiated in good faith and at arms’ length; that this 

settlement is fair, reasonable, in the best interest of the Parties and the public, 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 appropriate means of resolving this matter; 

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WHEREAS, the Defendant has asserted that its Bailly Generating Station Units 7 and 8, 

Michigan City Generating Station Unit 12, and Schahfer Generating Station Unit 14, are 

cyclone-fired units, with cycling demand for electric generation and inherently high NOx 

baseline emissions, equipped with SCR (as hereinafter defined) systems with ammonia on 

demand (“AOD”) systems. 

NOW, THEREFORE, without any 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 and 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 Complaint states claims upon which, if such claims were 

proven, relief may be granted pursuant to Section 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 objection based on standing. Except as expressly 

provided for herein, this Consent Decree shall not create any rights in any party other than 

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Plaintiffs and Defendant. Except as provided in Section XXVIII (Public Comment) of this 

Consent Decree, the Parties consent to entry of this Consent Decree without further notice. 

4) Notwithstanding the foregoing, should this 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 Environmental Management, and upon NIPSCO, its 

successors and assigns, and its officers, employees and agents, solely in their capacities 

as such. 

6) NIPSCO shall be responsible for providing a copy of this Consent Decree 

to all vendors, suppliers, consultants, contractors, 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. Notwithstanding 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 Consent Decree. In any action to enforce this Consent Decree, 

NIPSCO shall not assert as a defense the failure of its officers, directors, employees, 

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

Decree, unless NIPSCO establishes that such failure resulted from a Force Majeure 

Event, as defined in Section XVI (Force Majeure) of this Consent Decree. 

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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 Operating Day and the previous three hundred and 

sixty-four (364) Operating Days, with such emissions being determined from data 

derived from CEMS installed and operated at the Unit; second, sum the total heat input to 

the Cyclone-fired Unit in mmBTU during the Operating Day and the previous three 

hundred and sixty-four (364) Operating Days; and third, divide the total number of 

pounds of NOx emitted during those three hundred and sixty-five (365) Operating Days 

by the total heat input during those three hundred and sixty-five (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/mmBTU 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 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 365-Day Rolling Average Emission 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 Emission 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-

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Day Rolling Average Emission Rate for a Cyclone-fired Unit on December 31, 2009 is 

0.140 lb/mmBTU and the specified 365-Day Rolling 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 Average 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 during all periods of 

startup, shutdown and Malfunction within an Operating Day, except that emissions 

associated with a Malfunction that is determined 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 Rate” for a 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 the pollutant in question emitted from 

the Unit during an Operating Day and the previous 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 heat 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 

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above in this Paragraph for other Units, except that the total pounds 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 for each new Operating Day. When a 30-Day 

Rolling Average Emission Rate includes Operating 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 the 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 Average 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 during all periods of 

startup, shutdown and Malfunction within an Operating Day, except that emissions 

associated with a Malfunction that is determined 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 

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over a 30-Operating Day period. This percentage shall be calculated by subtracting the 

Unit’s outlet 30-Day Rolling Average Emission 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 inlet and then multiplying that result by 100. A 

new 30-Day Rolling Average Removal Efficiency shall be calculated for each new 

Operating Day. 30-Day Rolling Average Emission Rates used in the calculation of 30-

Day Rolling Average Removal Efficiencies pursuant to this Paragraph shall include all 

emissions that occur during all periods of startup, shutdown and Malfunction within an 

Operating Day, except that emissions associated with a Malfunction that is determined 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. 

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 periods 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 walls); and (d) draft system 

(excluding the stack), as further described in “Interpretation of Reconstruction,” John B. 

Rasnick, U.S. EPA (November 25, 1986), and the attachments thereto. 

12) “Calendar Month” means all of the Operating Days in one calendar month 

period. 

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13) “Capital Expenditures” means all capital 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 installing or upgrading pollution 

control devices. 

14) “CEMS” and “Continuous Emission Monitoring System” mean, for 

obligations involving NOX and SO2 under this Consent Decree, the devices defined in 40 

C.F.R.§ 72.2 and installed and maintained as required by 40 C.F.R. Part 75. 

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 incorporated into this Consent Decree. 

17) “Continuous Operation” and “Continuously Operate” mean, for 

obligations involving NOx, PM, and SO2 under this Consent Decree, the operation of any 

specified NOx, PM or SO2 control technology equipment at all times that the Unit it serves 

is in operation, except during a Malfunction of the control technology equipment, 

consistent with technological limitations, manufacturers’ specifications, and good air 

pollution control practices for minimizing emissions (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 generation and have inherently high NOx baseline 

emissions. The following Units in the NIPSCO System are considered Cyclone-fired 

Units: Bailly Unit 7 and Unit 8, Michigan City Unit 12, and Schahfer Unit 14. 

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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 Indiana 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 imparting 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 desulfurization 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 NOX, a NIPSCO System Unit that 

has an SCR or is scheduled under this Consent Decree to be equipped with an SCR (or an 

equivalent NOx control technology approved pursuant to Paragraph 65) or in the case of 

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SO2, a NIPSCO System Unit that has an FGD or is scheduled under this Consent Decree to 

be equipped with an FGD (or equivalent SO2 control technology approved pursuant to 

Paragraph 80) in accordance with this Consent 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, Improved Units for purposes of this Consent 

Decree: Bailly Units 7 and 8 (NOX and SO2); Michigan City Unit 12 (NOX and SO2); 

Schahfer Unit 14 (NOX and SO2); Schahfer Unit 15 (SO2) and Schahfer Units 17 and 18 

(SO2). 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 Consent Decree. Schahfer Unit 

15 can also become an Improved Unit for NOx if NIPSCO elects NOx Option 2 as 

described in Table 1 and Paragraph 60 and Schahfer Unit 15 becomes, at NIPSCO’s 

discretion, subject to a federally enforceable 0.080 lb/mmBTU NOX 30-Day Rolling 

Average Emission Rate, for which the rate and the requirement to Continuously Operate 

such SNCR is incorporated into a site-specific 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 NOX control technology approved 

pursuant to Paragraph 65) and has become subject to a federally enforceable 0.080 

lb/mmBTU NOX 30-Day Rolling Average Emission Rate, which rate, and the requirement 

to Continuously Operate such SCR, is incorporated into a site-specific amendment to the 

SIP and modification to the Title V permit. 

28) “Indiana SIP” means the Indiana state implementation plan approved and 

enforceable by EPA under Section 110 of the Act. 

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29) “lb/mmBTU” means one pound of a pollutant per million British thermal 

units of heat input. 

30) “Low Sulfur Coal” means coal that will achieve an uncontrolled SO2 

emission rate of less than 1.00 lb/mmBTU. 

31) “Malfunction” means any sudden, infrequent, and not reasonably 

preventable failure of air pollution 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 are not Malfunctions. 

32) “Monthly SO2 Removal Efficiency” means the percent reduction in SO2 

emissions achieved by the FGD at Bailly Units 7 and 8 during a Calendar Month. This 

percentage shall be calculated in accordance with the following procedure: (a) first, sum 

the total pounds of SO2 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 SO2 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 number is 0.10, subtract 

0.10 from 1.0); and, (d) fourth, multiply that result by 100. The pounds of SO2 emitted 

from the Bailly main stack (CS001), inlet to the FGD, and bypass stack shall be determined 

from data derived from SO2 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 excluded from the calculation of a Monthly SO2 Removal 

Efficiency. 

33) “MW” means a megawatt or one million watts. 

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34) “National Ambient Air Quality Standards” and “NAAQS” mean the 

national ambient air quality standards 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 following coal-fired, electric steamgenerating Units owned by NIPSCO and located in the State of Indiana, with estimated net 

demonstrated generating capacities for such 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 Station (“Michigan City”) in LaPorte 

County, IN, comprised of Unit 12 (469 MW); 

c.	 the Rollin M. Schahfer Electric Generating 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 (“NSR”) 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 provisions of the Indiana SIP. 

38) “NOX” means oxides of nitrogen. 

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39) “NOX Allowance” means an authorization or credit to emit a specified 

amount of NOX 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 NOX 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 NOX and 

an Other Unit for SO2, 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 Indiana, including the Indiana Attorney General 

and the Indiana Department of Environmental 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. 

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48) “PM Continuous Emission Monitoring System” and “PM CEMS” mean 

the equipment that samples, analyzes, measures, 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 set forth in Section X 

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

constitute NIPSCO’s direct payments for such projects, NIPSCO’s external costs for 

contractors, vendors, and equipment, or NIPSCO’s internal costs consisting of employee 

time, travel, or out-of-pocket expenses specifically attributable to these particular projects 

and documented in accordance with GAAP. 

51) “PSD” means Prevention of Significant Deterioration program within the 

meaning of Part C of Subchapter I of the 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, and 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 catalytic reduction technology for the reduction of 

NOX emissions. 

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54) “Selective Non-Catalytic Reduction System” and “SNCR” mean a 

pollution control device that employs selective non-catalytic reduction technology for the 

reduction of NOX emissions. 

55) “SO2” means sulfur dioxide. 

56) “SO2 Allowance” means “allowance” as defined at 42 U.S.C. § 7651a(3): 

“an authorization, allocated to an affected unit by the Administrator of EPA under 

Subchapter IV of the Act, to emit, during or after a specified calendar year, one ton of 

sulfur dioxide.” 

57) “Surrender” means permanently surrendering NOx or SO2 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 required 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 produces steam for the steam turbine, the steam 

turbine, the generator, equipment necessary to operate the generator, steam turbine and 

boiler, and all ancillary equipment, including pollution control equipment, at or serving a 

coal-fired steam electric generating unit. An electric steam generating station may 

comprise one or more Units. 

IV. NOX EMISSION REDUCTIONS AND CONTROLS 

A. NOX 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 

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NIPSCO System as stated in Table 1 and achieve 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 Option 2 for Schahfer Unit 15 as described in 

Table 1. 

- 17 -
 
63) Commencing for each Cyclone-fired Unit 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 Emission 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 Operate 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 Plaintiffs 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 Unit, install and operate at that Unit 

equivalent NOx control technology so long as such equivalent NOx control technology has 

been demonstrated to be capable of achieving 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 technology at that Unit by the date specified for 

SCR or SNCR installation in Table 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 maintain a 30-Day Rolling Average Emission Rate 

for NOx of not more than 0.080 lb/mmBTU at that Unit. 

B. General NOX Provision 

66) In determining Emission Rates for NOX, NIPSCO shall use CEMS in 

accordance with the procedures of 40 C.F.R. Part 75. 

C. Annual System Tonnage Limitation for NOX 

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 NOX 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 NOX 

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 NOX Allowances to comply with any requirement of this 

Consent Decree, including by claiming compliance with any emission limitation required 

by this Decree by using, tendering, or otherwise applying NOX Allowances to offset any 

excess emissions (i.e., emissions above the limits specified in Table 1, Table 2 and Table 

4). 

D. Use and Surrender of NOX Allowances 

69) Except as provided in this Consent Decree, NIPSCO shall not sell or trade 

any NOX Allowances allocated to the NIPSCO System that would otherwise be available 

- 21 -
 
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. 

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 Decree, including the requirement to Surrender NOx allowances 

under Paragraph 71 of this Consent Decree, shall preclude NIPSCO from selling or trading 

NOX 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 any 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 NOX 30-Day Rolling Average 

Emission Rate at any non-cyclone NIPSCO System Unit, as determined 

on a unit by unit basis, below the emission 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 Average 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 NOX Allowances that 

occur after the Date of Entry of this Consent Decree in accordance with Section XIII 

(Periodic Reporting) of this Consent Decree. 

- 22 -
 
71) Beginning with calendar year 2011, and continuing each calendar year 

thereafter, NIPSCO shall Surrender to EPA, or transfer 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 own federal and/or state 

Clean Air Act statutory or regulatory requirements. This requirement to Surrender all such 

NOx Allowances allocated to NIPSCO for a given 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 Allowances 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-profit third party, 

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

and the State of Indiana pursuant to Section XIII (Periodic Reporting) of this Consent 

Decree. Such report shall: (i) provide the identity of the non-profit third-party recipient(s) 

of the NOx Allowances and a listing of the serial numbers of the transferred NOx 

Allowances; and (ii) include a certification by the third-party recipient(s) stating that the 

recipient(s) will not sell, trade, or otherwise exchange any of the allowances and will not 

use any of the 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 statement that the third-party recipient(s) Surrendered the NOx 

Allowances for permanent Surrender to EPA in accordance with the provisions of 

- 23 -
 
Paragraph 71 within one (1) year after NIPSCO 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) shall 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 submit a NOx Allowance transfer request form 

to the EPA Office of Air and Radiation’s Clean Air Markets Division (“CAMD”) directing 

the transfer of such NOx Allowances to the EPA Enforcement Surrender Account or to any 

other EPA account that EPA may direct in writing. As part of submitting these transfer 

requests, NIPSCO or the third-party recipient(s) shall irrevocably authorize the transfer of 

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

identification numbers or station names the source and location of the NOx Allowances 

being Surrendered. 

74) Nothing in this Consent Decree shall prevent NIPSCO from purchasing or 

otherwise obtaining NOX Allowances from another source for purposes of complying with 

state or federal Clean Air Act requirements to the extent otherwise allowed by law. Such 

allowances will not be used to demonstrate compliance 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 use or Surrender of NOX Allowances are permanent injunctions 

not subject to any termination provision of this Consent Decree. 

- 24 -
 
V. SO2 EMISSION REDUCTIONS AND CONTROLS 

A. SO2 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 continuously maintain the 30-Day Rolling Average 

Emission Rate or applicable SO2 30-Day Rolling Average Removal Efficiency or Monthly 

SO2 Removal Efficiency as set forth in Table 5. 

Table 5 

Unit Control 

Technology 

30-Day Rolling Average 

Emission Rate (lb/mmBTU) / 

Removal Efficiency & Monthly 

SO2 Removal Efficiency 

Date required to meet 

emission rate/removal 

efficiency 

Bailly Units 7 

and 8 

Upgrade 

existing 

95.0% Monthly SO2 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 

SO2 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 

SO2 

Option 1: 

Retire 

SO2 

Option 2: 

FGD 

SO2 Option 1: N/A 

SO2 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 notify EPA of its decision to 

implement either SO2 Option 1 or SO2 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 SO2 emissions from both 

Bailly Units 7 and 8. During periods of startup, the FGD and the main stack cannot be 

used for the unit(s) experiencing startup. When 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 experiencing 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 other than during periods of startup, 

and then may only use it for the unit(s) experiencing startup. 

b.	 All SO2 emissions associated with periods of startup are included in the 

calculation of the Monthly SO2 Removal Efficiency and 30-Day Rolling 

Average SO2 Removal Efficiency for Bailly Unit 7 and 8 as described in 

Table 5, except that NIPSCO may exclude 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 hours in duration per startup while 

combusting coal. NIPSCO may however, exclude from the relevant 

removal efficiency, startup emissions that occur after the 16th hour up to 

the 24th hour, if NIPSCO Surrenders SO2 Allowances in an amount equal 

to the difference between the actual tons of SO2 emitted from the bypass 

stack between hour 17 and the point in time NIPSCO ceases use of the 

bypass stack for startup emissions (but, in any event, no longer than hour 

24) and the tons of SO2 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 only exclude these limited 

unit startup emissions for the Bailly bypass stack if NIPSCO demonstrates 

to EPA that such emissions otherwise would cause NIPSCO 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 bypass 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 Removal 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 the requirements of this Section V (SO2 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 specified in Table 5. In all cases where the 

applicable Monthly SO2 Removal Efficiency is not achieved for a given Calendar Month 

prior to January 1, 2014, the difference between the actual SO2 emissions emitted and the 

compliance level of SO2 emissions during such Calendar Month shall be rounded up to the 

next highest ton (e.g., if the difference is 750 pounds, then the difference shall be rounded 

up to one ton and SO2 Allowances equal to two tons would be required to be retired). Any 

allowances retired under this Paragraph 79 shall be in addition to any allowances that 

NIPSCO is otherwise required to Surrender to EPA or transfer to a non-profit third party 

pursuant to Paragraph 86 and 87 of this Consent Decree. After January 1, 2014, the 

method described in this Paragraph 79 may not be used to comply with the requirements of 

this Section. 

80) After prior written notice to the Plaintiffs and prior written approval from 

EPA (after consultation by EPA with the State of Indiana), NIPSCO may, in lieu of 

- 28 -
 
installing and operating FGD technology at Schahfer Unit 15, install and operate equivalent 

SO2 control technology, so long as such equivalent SO2 control technology has been 

demonstrated to be capable of achieving and maintaining a 30-Day Rolling Average Rate 

for SO2 of not more than 0.080 lb/mmBTU, and so long as NIPSCO commences operation 

of the equivalent SO2 control technology by the date specified for FGD installation in 

Table 5. If it elects to request equivalent SO2 technology, NIPSCO shall provide the 

written notice referenced above no later than December 31, 2012. Upon installation of 

such equivalent SO2 control technology as a means of complying with Table 5, NIPSCO 

shall achieve and maintain a 30-Day Rolling Average Emission Rate for SO2 of not more 

than 0.080 lb/mmBTU at that Unit. 

B. General SO2 Provisions 

81) In determining Emission Rates for SO2, NIPSCO shall use CEMS in 

accordance with the procedures of 40 C.F.R. Part 75. 

C. Annual System Tonnage Limitation for SO2 

82) In addition to meeting the emission limits set forth in Table 5, all Units in 

the NIPSCO System, collectively, shall not emit SO2 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 SO2 

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 SO2 Option 2 

(Michigan City Unit 12 FGD): 

11,600 tons 

If NIPSCO selects SO2 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 required under Paragraphs 78 and 79, NIPSCO may 

not use SO2 Allowances to comply with any requirement of this Consent Decree, including 

by claiming compliance with any emission limitation required by this Decree by using, 

tendering, or otherwise applying SO2 Allowances to offset any excess emissions (i.e., 

emissions above the limits specified in Table 5 and Table 6). 

D. Use and Surrender of SO2 Allowances 

84) Except as provided in this Consent Decree, NIPSCO shall not sell or trade 

any SO2 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, provided that the NIPSCO System is in 

compliance for that calendar year with all emissions limitations for SO2 set forth in this 

Consent Decree, nothing in this Consent Decree, including the requirement to Surrender 

SO2 Allowances under Paragraph 86 of this Consent Decree, shall preclude NIPSCO from 

selling or trading SO2 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 of any pollution control technology or 

technique that is not otherwise required by this Consent Decree, or the 

installation and operation of any FGD prior to the dates required by 

Section V of this Consent Decree; or 

b. achievement and maintenance of an SO2 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 SO2 30-Day 

Rolling Average Removal Efficiency or Monthly SO2 Removal Efficiency 

specified for such Unit, or below the SO2 30-Day Rolling Average 

Emission Rate specified for such Unit, 

so long as NIPSCO timely reports the generation of such surplus SO2 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, and continuing each calendar year 

thereafter, NIPSCO shall Surrender to EPA, or transfer to a non-profit third party selected 

by NIPSCO for Surrender, all SO2 Allowances allocated to the NIPSCO System Units for 

- 31 -
 
that calendar year that NIPSCO does not need in order to meet its own federal and/or state 

Clean Air Act statutory or regulatory requirements. This requirement to Surrender all such 

SO2 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 SO2 from EPA. Surrender need not include the specific SO2 

Allowances that were allocated to NIPSCO System Units, so long as NIPSCO surrenders 

SO2 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. 

87) If any allowances are transferred directly to a non-profit third party, 

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

and the State of Indiana pursuant to Section XIII (Periodic Reporting) of this Consent 

Decree. Such report shall: (i) provide the identity of the non-profit third-party recipient(s) 

of the SO2 Allowances and a listing of the serial numbers of the transferred SO2 

Allowances; and (ii) include a certification by the third-party recipient(s) stating that the 

recipient(s) will not sell, trade, or otherwise exchange any of the allowances and will not 

use any of the SO2 Allowances to meet any obligation imposed by any environmental law. 

No later than the third periodic report due after the transfer of any SO2 Allowances, 

NIPSCO shall include a statement that the third-party recipient(s) Surrendered the SO2 

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

Paragraph 86 within one (1) year after NIPSCO transferred the SO2 Allowances to them. 

NIPSCO shall not have complied with the SO2 Allowance Surrender requirements of this 

Paragraph until all third-party recipient(s) shall have actually Surrendered the transferred 

SO2 Allowances to EPA. 

- 32 -
 
88) For all SO2 Allowances surrendered to EPA, NIPSCO or the third-party 

recipient(s) (as the case may be) shall first submit an SO2 Allowance transfer request form 

to the EPA Office of Air and Radiation’s Clean Air Markets Division (“CAMD”) directing 

the transfer of such SO2 Allowances to the EPA Enforcement Surrender Account or to any 

other EPA account that EPA may direct in writing. As part of submitting these transfer 

requests, NIPSCO or the third-party recipient(s) shall irrevocably authorize the transfer of 

these SO2 Allowances and identify by name of account and any applicable serial or other 

identification numbers or station names the source and location of the SO2 Allowances 

being surrendered. 

89) Nothing in this Consent Decree shall prevent NIPSCO from purchasing or 

otherwise obtaining SO2 Allowances from another source for purposes of complying with 

state or federal Clean Air Act requirements to the extent otherwise allowed by law. Such 

allowances shall not be used to demonstrate compliance with the annual tonnage caps of 

this Consent Decree. 

90) The requirements in Paragraphs 84 through 89 of this Decree pertaining to 

NIPSCO’s surrender of SO2 Allowances are permanent injunctions 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 Continuously Operate each PM Control Device on 

each Unit within the NIPSCO System, to maximize the PM emission reductions at all times 

when the unit is in operation, provided 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 the 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 practicable (as defined in 40 C.F.R. § 60.11(d)). 

Notwithstanding the foregoing sentences 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) energize each available section 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 action is needed to comply with opacity limits; 

(b) maintain the energy or power levels delivered to the ESPs for each Unit to achieve 

optimal removal of PM, or at each Unit where 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 and expansion joints, and make best efforts to 

expeditiously repair and return to service 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 and discharge electrode 

cleaning systems, to maximize control efficiency; and (e) at each Unit where a baghouse is 

installed and operating, make best efforts to expeditiously repair and return to service any 

failed baghouse compartment. 

- 34 -
 
B. PM Emissions 

92) Beginning for each Unit on the dates specified in Table 7 below, NIPSCO 

shall achieve and maintain a PM Emission Rate 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 Emission 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 performance test on each NIPSCO System Unit 

identified in Table 7. The annual performance test requirement imposed on NIPSCO by 

this Paragraph may be satisfied by stack tests conducted by NIPSCO as may be required by 

its permits from the State of Indiana for any year that such stack tests are required under the 

permits. NIPSCO may perform testing every other year, rather than every year, provided 

- 35 -
 
that two of the most recently completed test results from tests conducted in accordance 

with the methods and procedures specified in this Paragraph demonstrate that the PM 

emissions are equal to or less than 0.015 lb/mmBTU. NIPSCO shall perform testing every 

year, rather than every other year, beginning in the year immediately following any test 

result demonstrating that the PM emissions are greater than 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 promulgated 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 specified in 40 C.F.R. Part 60, Appendix A and 40 

C.F.R. §§ 60.48a (b) and (e), or any federally approved method contained in the Indiana 

SIP. NIPSCO shall calculate the PM Emission 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, NIPSCO 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 described in Tables 4 and 6. 

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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 requirements of this Consent 

Decree shall not be considered as a creditable contemporaneous emission decrease for the 

purpose of obtaining a netting or offset credit under the Clean Air 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 not apply 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 example, they result from NIPSCO’s 

compliance with federally enforceable emission limits that are more stringent than those 

limits imposed on the NIPSCO System and individual Units under this Consent Decree and 

under applicable provisions of the Clean Air Act or the Indiana SIP. 

99) Nothing in this Consent Decree is intended to preclude the emission 

reductions generated under this Consent Decree 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 any modeling analyses required pursuant to 40 

C.F.R. Part 52 or the Prevention of Significant Deterioration regulations under the Indiana 

- 37 -
 
SIP for purposes of demonstrating compliance with PSD increments or air quality related 

values, including visibility, in a Class I area. 

IX.	 PM AND MERCURY CONTINUOUS EMISSION 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 period. Except for CEMS breakdowns, repairs, 

calibration checks, and zero and span adjustments, NIPSCO shall continuously operate the 

PM CEMS and mercury CEMS consistent with 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 particulate matter concentration, directly or 

indirectly, on a continuous basis. NIPSCO shall install a diluent monitoring system on 

Michigan City Unit 12 and Schahfer Unit 15 such that the PM mass concentration can be 

converted to units of lb/mmBTU. NIPSCO shall 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 plans and perform testing and reporting in accordance with 

Paragraphs 104 through 106 of this Consent Decree. In the event NIPSCO elects to retire 

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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 Schahfer 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 system 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 installation 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 retire 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 the installation, certification 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 CEMS. In developing both the plan for 

installation and certification of the PM and 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 operate the PM and mercury CEMS in accordance with the 

approved protocols. 

105) No later than ninety days (90) after 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, NIPSCO shall conduct tests on each 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 within forty-five (45) days of completion of 

certification testing 

106) Upon completion of testing in accordance 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 and 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 required 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 magnitude 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 period 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 the PM CEMS shall be used to, at a minimum, 

monitor progress in reducing PM emissions. 

107) Nothing in this Consent Decree is intended to, or shall, alter or waive any 

applicable law (including any defenses, entitlements, challenges, or clarifications 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 Environmental Mitigation Projects 

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

approved plans and schedules for such Projects and other terms of this 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 present 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 NIPSCO pursuant to the requirements of 

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

available from NIPSCO without charge. 

- 41 -
 
110) NIPSCO shall certify, as part of each plan submitted to Plaintiffs for any 

Project, that NIPSCO is not otherwise required by law to perform the Project described in 

the plan, that NIPSCO is unaware of any other 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 applicable requirements of law, including any 

applicable renewable portfolio standards or energy conservation standards. 

111) NIPSCO shall use good faith efforts to secure as much benefit as possible 

for the Project Dollars expended, consistent with the applicable requirements and limits of 

this Consent Decree. 

112) If NIPSCO elects (where such an election is allowed) to undertake a 

Project by contributing funds to another person or entity that will carry out the Project in 

lieu of 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 conduct the Project for which NIPSCO contributes the 

funds. Regardless of whether NIPSCO elected (where such election is allowed) to 

undertake a Project by itself or to do so by contributing funds to another person or 

instrumentality that will carry out the Project, 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 spent 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 all 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 Project (including any applicable periods of 

- 42 -
 
demonstration or testing), NIPSCO shall provide Plaintiffs with semi-annual updates 

concerning the progress of each Project. 

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

under this Consent Decree (including any applicable periods of demonstration 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 Project Dollars expended by 

NIPSCO in implementing the Project (including 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 that NIPSCO violated the Clean Air Act. 

XI. CIVIL PENALTY 

116) Within thirty (30) calendar days after the Date of Entry of this Consent 

Decree, NIPSCO shall pay to the United States and the State of Indiana 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 shall be paid by Electronic Funds Transfer 

(“EFT”) to the United States Department of Justice, in accordance with 

current EFT procedures, referencing 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 credited on the next business day. At 

the time of payment, NIPSCO shall provide notice of payment, referencing 

the USAO File Number, the DOJ Case Number, and the civil action case 

name and case number, to the Department of Justice and to EPA in 

accordance with Section XXI (Notices) of this Consent Decree. 

(b) NIPSCO shall pay a civil penalty 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 Section are penalties within the meaning 

of Section 162(f) of the Internal Revenue Code, 26 U.S.C. § 162(f), and are not taxdeductible expenditures for purposes of federal law. 

- 44 -
 
XII.	 RESOLUTION OF PAST AND FUTURE CLAIMS 

A.	 Resolution of Plaintiffs’ Civil Claims 

119) Claims of the United States Based on Modifications Occurring Before the 

Lodging of Decree. Entry of this Consent Decree shall 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 federal and state rules, including 

the Indiana SIP approved under Section 110 of the Act implementing Parts 

C or D of Subchapter 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 promulgated 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 applicable 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 commenced at any NIPSCO System 

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

claims and modifications alleged in the Complaint filed by the Plaintiffs in this civil action 

and those claims and modifications asserted in the NOV issued by EPA to NIPSCO. 

120) Claims of the State of Indiana Based on Modifications Occurring Before 

the Lodging of Decree. Entry of this Decree shall resolve 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 federal and state rules, including 

all civil claims under Indiana regulations at 326 IAC 2-1 et seq. 

(Construction and Operating Permit 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 that govern minor New Source Review 

and any related Indiana statutes, including any Indiana rule governing 

minor New Source Review that existed 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 commenced at any NIPSCO System 

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

claims and modifications alleged in the Complaint filed by the Plaintiffs in this civil action 

and those claims and modifications asserted in the NOV issued by EPA to NIPSCO. 

121) Plaintiffs’ Claims Based on Modifications After the Lodging of Decree. 

Entry of this Consent Decree also shall resolve all civil claims of the United States and of 

the State of Indiana for pollutants, except sulfuric 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 such claims are based on any modification 

completed before December 31, 2018, and 

a. is commenced at any NIPSCO System Unit after the Date of Lodging; or 

b. that this Consent Decree expressly directs NIPSCO to undertake. 

The term “modification” as used in this Paragraph 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 greenhouse gases (carbon dioxide, nitrous oxide, methane, 

hydroflurorcarbons, perfluorocarbons, and sulfur 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 claims of the United States and the 

State of Indiana provided by this Subsection is subject to the provisions of Subsection B of 

this Section. 

B. Pursuit of Plaintiffs’ Civil 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 or installation and commence operation of any 

emission control device required pursuant to this 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 United States or the State of Indiana may pursue 

any claim at any NIPSCO System Unit that has otherwise been resolved under Subsection 

A of this Section, subject to (a) and (b) below. 

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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 failure specified in this Paragraph. 

b. For any claims based on modifications undertaken at an Improved Unit, 

claims may be pursued only where the modification(s) on which such 

claim is based was commenced: (i) after lodging of the Consent Decree, 

and (ii) within the five years preceding the violation or failure specified in 

this Paragraph. 

124) Additional Bases for Pursuing Resolved Claims for modifications at an 

Improved Unit. Solely with respect to Improved Units, the United States or the State of 

Indiana may also pursue claims arising from a modification (or collection of 

modifications) at an Improved Unit that have otherwise been resolved under 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 emission rate of that Unit for 

NOx or SO2 (as measured by 40 C.F.R. § 60.14 (b) and (h)) by more than ten percent 

(10%). 

125) Additional Bases for Pursuing Resolved Claims 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 modification (or collection of modifications) at an 

Other Unit that have otherwise been resolved under Section XII, Subsection A, if the 

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modification (or collection of modifications) on which the claim is based was commenced 

within the five years preceding any of the following events: 

a.	 a modification (or collection of modifications) 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 NOx or 

SO2) as measured by 40 C.F.R. § 60.14(b) and (h); 

b.	 the aggregate of all Capital Expenditures paid at such Other Unit exceed 

$150/KW on the Unit’s Boiler Island (based 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 Engineering NewsRecord Construction Cost Index); or 

c.	 a modification (or collection of modifications) at such Other Unit 

commenced after the Date of Lodging results in an emissions increase of 

NOx and/or SO2 at such Other Unit, and such increase: 

i.	 presents, by itself, or in combination with other emissions or 

sources, “an imminent and substantial 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 attainment with that NAAQS; 

iii.	 causes or contributes to violation 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. 

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d.	 The introduction of any new or changed NAAQS shall not, standing alone, 

provide the showing needed under subparagraph (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 address specified in Section XXI (Notices) of 

this Consent Decree. 

127) Beginning thirty (30) days after the end of the second calendar quarter 

following the Date of Entry of this Consent 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, NIPSCO 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 Consent Decree: Tables 1, 2, 3 and 4 

concerning NOX emissions; Tables 5 and 6 concerning SO2 emissions 

(including information related to burning of low sulfur coal at Bailly Units 

7 and 8); and Table 7 concerning PM emissions; 

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b.	 documentation of any Capital Expenditures at a Unit’s Boiler Island made 

during the period covered by the progress report and cumulative Boiler 

Island Capital Expenditures to date; 

c.	 all information relating to emission allowances and credits that NIPSCO 

claims to have generated in accordance with Paragraphs 70 and 85, 

through compliance beyond the requirements 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 steps taken to minimize the adverse 

effects of such excess emissions; and 

g.	 information verifying compliance with: 

i.	 Continuous Operation of all pollution 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 information previously submitted under its Title V 

permitting requirements, provided that NIPSCO attaches the Title V permit report, or the 

relevant portion thereof, and provides a specific reference to the provisions of the Title V 

permit report that are responsive to the information 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 explain 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 signed by NIPSCO’s Vice President of 

Generation or his or her equivalent or designee of at least the rank of Vice President, and 

shall contain the following certification: 

This information was prepared either by me or under my direction or supervision 
 

in accordance with a system designed to assure that qualified personnel properly
 


gather and evaluate the information submitted. Based on my evaluation, or the 
 

directions and my inquiry of the person(s) who manage the system, or the 
 

person(s) directly responsible for gathering the information, I hereby certify under 
 

penalty of law that, to the best of my knowledge and belief, this information is 
 

true, accurate, and complete. I understand that there are significant penalties for 
 

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 pursuant 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 
 

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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 Decree 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 approval. 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 period 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 specified 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 provisions of Sections XVI (Force Majeure), VXII (Affirmative 

Defenses) and XVIII (Dispute Resolution), NIPSCO shall pay, within thirty (30) days after 

receipt of written demand to NIPSCO by the United States, the following stipulated 

penalties to the United States: 

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Table 8 

Consent Decree Violation Stipulated Penalty 

a. Failure to pay the civil penalty 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 SO2 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 SO2 or 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. 

$5,000 per day per violation 

d. Failure to comply with any applicable 30-Day Rolling 

Average Emission Rate for SO2 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 where 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 SO2 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 where the violation is equal 

to or greater than 0.3% less than 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 

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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 

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for SO2. additional ton above 1000 tons. In 

addition, NIPSCO shall Surrender, 

pursuant to the procedures set 

forth in Paragraph 86, SO2 

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 

NOX. 

$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, NOx 

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 NOX, SO2, 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 operate 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 NOX Allowances except as 

permitted by Section IV. D (Use and Surrender of NOx 

Allowances). 

The surrender of NOX Allowances 

in an amount equal to four times 

the number of NOX Allowances 

used, sold, or transferred in 

violation of this Consent Decree 

s. Selling or trading SO2 Allowances except as permitted The surrender of SO2 Allowances 

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by Section V.D (Use and Surrender of SO2 Allowances). in an amount equal to four times 

the number of SO2 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 SO2 Allowances as required by 

Paragraph 86. 

(a) $27,500 per day plus (b) 

$1,000 per SO2 Allowance not 

surrendered 

v. Failure to demonstrate the third-party Surrender of an 

NOx Allowance in accordance with Paragraphs 72 and 

73. 

$2,500 per day per violation 

w. Failure to demonstrate the third-party surrender of an 

SO2 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 Mitigation 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 required 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 required pursuant to Paragraph 

94 of this Consent Decree, where the violation is equal to 

or greater than 5% but less than 10% in excess of the 

limit set forth in this Consent Decree. 

$5,000 per day, 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 

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Rate 

bb. Violating an applicable PM Emission Rate based on 

the results of a stack test required pursuant to Paragraph 

94 of this Consent Decree, 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, 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 Consent 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 than thirty (30) Operating Days, NIPSCO 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. 

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 less than 365 Operating Days, NIPSCO 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 SO2 Removal Efficiency for a given Calendar 

Month shall constitute a violation on each day within the Month. For clarity, if NIPSCO 

Surrenders SO2 allowances pursuant to Paragraph 79 of this Consent Decree as a means to 

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comply with the Monthly SO2 Removal Efficiency requirement, there is no Monthly SO2 

Removal Efficiency violation. 

138) All stipulated penalties shall begin to accrue on the day after the 

performance is due or on the day a violation occurs, whichever is applicable, and shall 

continue to accrue until performance is satisfactorily completed or until the violation 

ceases, whichever is applicable. Nothing in this Consent Decree shall prevent the 

simultaneous accrual of separate stipulated penalties for separate violations of this Consent 

Decree. 

139) NIPSCO shall pay all stipulated penalties 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 until 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 obligation to pay or the accrual of 

stipulated penalties in accordance with the 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 Secretary of the Treasury, pursuant to 

28 U.S.C. § 1961, but need not be paid until the following: 

a.	 If the dispute is resolved by agreement, or by a decision of Plaintiffs 

pursuant to Section XVIII (Dispute Resolution) of this Consent Decree 

that is not appealed to the Court, accrued stipulated penalties agreed or 

determined to be owing, together with accrued interest, shall be paid 

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within thirty (30) days of the effective 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 stipulated 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 the 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. 

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143) The stipulated penalties provided for in this Consent Decree shall be in 

addition to any other rights, remedies, or sanctions available to the United States 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 for 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 the Act, the Indiana SIP, 

including Indiana regulations under 326 IAC Article 2, or of an operable Title V permit, 

NIPSCO shall be allowed a credit for stipulated penalties paid against 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 occurring; 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 Majeure pursuant to the process described 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 writing as soon as practicable, 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 measures 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 electronically, as soon as practicable, to the U.S. 

Department of Justice, EPA, and IDEM. NIPSCO 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 NIPSCO’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 that a delay in performance has been or will 

be caused by a Force Majeure Event, EPA and NIPSCO shall stipulate to an extension of 

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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 (Modification) of this Consent Decree. 

148) Disagreement. If EPA does not accept NIPSCO’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 resolved in 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 burden of proving that NIPSCO gave the notice 

required by this Section and the burden of proving 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 obligations under this Consent 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 NIPSCO’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 Section: 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 control device; acts of God; acts of war or 

terrorism; and orders by a government official, government agency, other regulatory 

authority, or a regional transmission organization, acting under and authorized by 

applicable law, that directs NIPSCO to supply 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 timely fashion may constitute a Force Majeure 

Event where the failure of the permitting authority 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, or this Court by order, may in appropriate 

circumstances extend or modify the schedule for completion of work under this Consent 

Decree to account for the delay in the work that occurred as a result of any delay agreed to 

by the United States 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 shall not be precluded from making a further 

claim of Force Majeure with regard to meeting any such extended or modified schedule). 

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XVII. AFFIRMATIVE DEFENSES
 


153) Affirmative defense as to stipulated 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 Malfunction, NIPSCO, bearing the burden of proof, has 

an affirmative defense to stipulated penalties under this Consent Decree if NIPSCO 

complies with the reporting requirements 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 planned 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 operated in a manner consistent with 

good practice for minimizing emissions; 

d. repairs were made in an expeditious fashion when NIPSCO knew or 

should have known that the applicable 30-Day Rolling Average Emission 

Rate, 30-Day Rolling Average Removal Efficiency or Monthly SO2 

Removal Efficiency was being or would 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; 

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e. the amount and duration of the excess emissions (including any bypass) 

were minimized to the maximum extent practicable during periods of such 

emissions; 

f. all possible steps were taken to minimize the impact of the excess 

emissions on ambient air quality; 

g. all emission monitoring systems were kept in operation if at all possible; 

h. NIPSCO’s actions in response to the excess emissions were documented 

by properly signed, contemporaneous operating 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 startup 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 Efficiency due to startup or shutdown, NIPSCO, 

bearing the burden of proof, has an affirmative defense to stipulated penalties under this 

Consent Decree if NIPSCO complies with the reporting requirements of Paragraphs 156, 

and demonstrates all of the following: 

a.	 The periods of excess emissions that occurred during startup and 

shutdown were short and infrequent and could not have been prevented 

through careful and prudent planning and design; 

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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 intentional 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 operated 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 kept in operation if at all possible; 

h. NIPSCO’s actions during the period of excess emissions were documented 

by properly signed, contemporaneous operating 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 treated as other Malfunctions subject to Paragraph 

153. 

156) NIPSCO shall provide notice to the United States in writing of NIPSCO’s 

intent to assert an affirmative defense as to stipulated penalties for Malfunction, startup, or 

shutdown in NIPSCO’s semi-annual progress reports as required by Paragraph 127(e). 

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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 emissions expressed in the units of the 

applicable emissions limitation and the 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 steps taken or planned to prevent the 

recurrence of the Malfunctions; 

g. The steps that were or are being taken to limit the excess emissions; and 

h. If NIPSCO’s permit contains procedures governing source operation 

during periods of startup, shutdown, or Malfunction and the excess 

emissions resulted from startup, shutdown, or Malfunction, a list of the 

steps taken to comply with the permit procedures. 

157) A Malfunction, startup, or shutdown shall not constitute a Force Majeure 

Event unless the Malfunction, startup, or shutdown also meets the definition of a Force 

Majeure Event, as provided in Section XVI (Force Majeure). 

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XVIII. DISPUTE RESOLUTION
 


158) The dispute resolution procedure provided by this Section shall be 

available to resolve all disputes arising under this Consent Decree, provided that the Party 

invoking such procedure has first made a good faith attempt to resolve the matter with the 

other Party. 

159) The dispute resolution procedure required herein shall be invoked by one 

Party giving written notice to the other Party advising of a dispute pursuant to this Section. 

The notice shall describe the nature of the dispute and shall state the noticing Party’s 

position with regard to such dispute. The Party receiving such a notice shall acknowledge 

receipt of the notice, and the Parties in dispute shall expeditiously schedule a meeting to 

discuss the dispute informally not later than 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 negotiations among the disputing Parties. Such 

period of informal negotiations shall not extend 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 this period. During the informal negotiations period, the 

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

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

completed within the 30-day informal negotiations 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 Plaintiffs shall be 

considered binding unless, within forty-five (45) calendar days thereafter, NIPSCO seeks 

judicial resolution of the dispute by filing a petition with this Court. Plaintiffs may respond 

to the petition within forty-five (45) calendar days of filing. In their initial filings with the 

Court under this Paragraph, the disputing Parties shall state their respective positions as to 

the applicable standard of law for resolving the particular dispute. The Court shall decide 

all disputes pursuant to applicable principles of law for resolving such disputes. 

162) The time periods set out in this Section may be shortened or lengthened 

upon motion to the Court of one of the Parties to the dispute, explaining the Party’s basis 

for seeking such a scheduling modification. 

163) This Court shall not draw any inferences nor establish any presumptions 

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

Parties’ inability to reach agreement. 

164) As part of the resolution 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 completion of the activities required under this 

Consent Decree to account for the delay that occurred 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 modified schedule, provided that NIPSCO shall 

not be precluded from asserting that a Force Majeure Event has caused or may cause a 

delay in complying with the extended or modified schedule. 

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XIX. PERMITS AND SIP REVISIONS 

165) Unless expressly stated otherwise in this Consent Decree, in any instance 

where otherwise applicable law or this Consent Decree requires NIPSCO to secure a permit 

to authorize construction or operation of any device contemplated herein, including all 

preconstruction, construction, and operating permits required under state law, NIPSCO 

shall make such application in a timely manner. 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 modification for any physical change in, or any 

change in the method of operation of, any NIPSCO System Unit that would give rise to 

claims resolved by Section XII (Resolution of Claims) of this Consent Decree; or (2) any 

Title V Permit or other operating permit or permit modification, or application therefore, 

related to or arising from any physical change in, or change in the method of operation of, 

any NIPSCO System Unit that would give rise to claims resolved by Section XII 

(Resolution of Claims) of this Consent Decree. 

167) When permits are required as described 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 review of the permit request, including requests 

for additional information by the permitting authorities. Any failure by NIPSCO to submit 

a timely permit application for NIPSCO System Units shall bar any use by NIPSCO of 

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Section XVI (Force Majeure) of this Consent Decree, where 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 Consent Decree shall be enforceable under this 

Consent Decree regardless of whether such term has or will become part of a Title V 

permit, subject to the terms of Section XXIX (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 Title V permit application, or apply for 

modifications to its Title V permits to include a schedule for implementation of all Annual 

System Tonnage Limitations, as well as all Unit-specific performance, operational, 

maintenance, and control technology requirements 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 provision that recognizes that any noncompliance with Annual 

System Tonnage Limitation requirements constitutes 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 efficiencies; system-wide Annual 

Tonnage Limitations; allowance surrenders; limits on use of emission credits; and 

operation, maintenance and optimization requirements. Such request shall include not only 

requirements related to particular Units in the 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 requirements set forth in Paragraph 170 above, 

NIPSCO shall file a complete application to IDEM to incorporate the 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 section of the amended Indiana SIP that incorporates the systemwide requirements to comply with the Annual System Tonnage Limitation for NOx in 

Table 4, and the Annual System Tonnage Limitation for SO2 in Table 6; and (ii) include a 

provision that recognizes that any 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 each facility within the NIPSCO System. The 

requirement to comply with the system-wide Annual System Tonnage Limitations for NOx 

and SO2 shall continue to apply after the termination of the Consent Decree. 

172) NIPSCO shall provide Plaintiffs with a copy of its request for SIP 

amendment (as required 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 

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permit proposed as a result of such application, 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 Ownership Interest in the NIPSCO System or individual 

Units, NIPSCO shall comply with the requirements of Section XXII (Sales or Transfers of 

Ownership Interests) with regard to such Unit or Units prior to any such sale or transfer 

unless, following any such sale or transfer, NIPSCO remains the holder of the federally 

enforceable permit for such facility. 

XX.	 INFORMATION COLLECTION 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, contractors, or consultants; and 

d.	 assessing NIPSCO’s compliance with this Consent Decree. 

175) NIPSCO shall retain, and instruct its contractors and agents to preserve, all 

non-identical copies of all records 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 performance of its obligations under this Consent Decree for 

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the following periods: (a) until December 31, 2023, for records concerning physical or 

operational modifications that are subject to reopener provisions of Section XII, Subsection 

B of this Consent Decree; and (b) until December 31, 2019, for all other records. This 

record retention requirement shall apply regardless of any corporate document retention 

policy to the contrary. 

176) All information and documents submitted by NIPSCO pursuant to this 

Consent Decree shall be subject to any requests under applicable law providing public 

disclosure of documents unless: (a) the information and documents are subject to legal 

privileges or protection; or (b) NIPSCO claims and substantiates in accordance with 40 

C.F.R. Part 2 that the information and 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 facilities under section 114 of the Act, 42 

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

XXI. NOTICES 

178) Unless otherwise provided herein, whenever notifications, submissions, or 

communications are required by this Consent Decree, they shall be made in writing and 

addressed as follows: 

As to the United States Department of Justice: 

Chief, Environmental Enforcement Section 

Environment and Natural Resources Division 

U.S. Department of Justice 

P.O. Box 7611, Ben Franklin Station 

Washington, D.C. 20044-7611 

DJ# 90-5-2-1-08417 

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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 86th Ave. 

Merrillville, IN 46410 

and 

Chief Legal Officer 

NiSource, Inc. 

801 East 86th Ave. 

Merrillville, IN 46410 

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179) All notifications, communications or submissions made pursuant to this 

Section shall be sent either by: (a) overnight mail or overnight delivery service; or (b) 

certified or registered mail, return receipt requested. All notifications, communications and 

transmissions sent by overnight, certified or registered mail shall be deemed submitted on 

the date they are postmarked. If sent by overnight delivery service, they shall be deemed 

submitted on the date they are delivered to the delivery service. 

180) Any Party may change the notice recipient, the address for providing 

notices or the means of transmittal to it by serving the other Party with a notice setting forth 

such new notice recipient, such new address or such changed means of transmittal (e.g., to 

electronic format). 

XXII. SALES OR TRANSFERS OF OWNERSHIP INTERESTS 

181) If NIPSCO proposes to sell or transfer 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 Consent Decree prior to such sale 

or transfer, and shall send a copy of such written notification to Plaintiffs pursuant to 

Section XXI (Notices) of this Consent 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 this 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 transferred or purchased 

Ownership Interests. 

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183) This Consent Decree shall not be construed to impede the transfer of any 

Ownership Interests between NIPSCO and any Third Party Purchaser so long as the 

requirements of this Consent Decree are met. This Consent Decree shall not be construed 

to prohibit a contractual allocation as between NIPSCO and any Third Party Purchaser of 

Ownership Interests of the burdens of compliance 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 NIPSCO of its liability under this Consent Decree for, and makes 

the Third Party Purchaser liable for, all obligations and liabilities applicable to the 

purchased or transferred Ownership Interests. Notwithstanding the foregoing, however, 

NIPSCO may not assign, and may not be released from, any obligation under this Consent 

Decree that is not specific to the purchased or transferred Ownership Interests, including 

the obligations set forth in Sections X (Environmental Mitigation Projects) and XI (Civil 

Penalty). NIPSCO may propose and EPA may agree to restrict the scope of the joint and 

several liability of any purchaser or transferee for any obligations of this Consent Decree 

that are not specific to the transferred or purchased Ownership Interests, to the extent such 

obligations may be adequately separated in an enforceable manner. 

185) Paragraphs 182 and 184 of this Consent Decree does not apply if an 

Ownership Interest is sold or transferred solely as collateral security in order to 

consummate a financing arrangement (not including a sale-leaseback), so long as NIPSCO: 

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(a) remains the operator (as that term is used and interpreted under the Clean Air Act) of 

the NIPSCO System Units; (b) remains subject to and liable for all obligations and 

liabilities of this Consent Decree; and (c) supplies Plaintiffs with the following certification 

within 30 days of the sale or transfer: 

Certification of Change in Ownership 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 NIPSCO’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 and [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 NIPSCO’s performance of its obligations 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 Decree shall be the Date of Entry as 

defined by Paragraph 19. If this Consent Decree is not entered by the Court in the form 

presented to the Court or the United States or the State of Indiana withhold 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 between or among the parties to the Consent Decree. 

XXIV. RETENTION OF JURISDICTION 

187) The Court shall retain jurisdiction of this case after entry of this Consent 

Decree to enforce compliance with the terms and conditions of this Consent Decree and to 

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take any action necessary or appropriate for its interpretation, construction, execution, 

modification, or adjudication of disputes. During the term of this Consent Decree, any 

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

effectuate this Consent Decree. 

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 Decree, 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 forth 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 any 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 assert any defense or claim based upon principles of waiver, 

res judicata, collateral estoppel, issue preclusion, claim preclusion, or claim splitting, or 

any other defense based upon the contention that the claims raised by Plaintiffs in the 

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subsequent proceeding were brought, or should have been brought, in the instant case; 

provided, however, that nothing in this Paragraph is intended to affect the validity of 

Section 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 provisions in Sections XII 

(Resolution of Claims), nothing contained in this Consent Decree shall be construed to 

prevent or limit the rights of Plaintiffs to obtain penalties or injunctive relief under the Act 

or other federal, state, or local statutes, regulations, or permits. 

193) Every term expressly defined by this Consent Decree shall have the 

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

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

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

such term means under the Act or those implementing regulations. 

194) Nothing in this Consent Decree is intended to, or shall, alter or waive any 

applicable law (including but not limited to any defenses, entitlements, challenges, or 

clarifications related to the Credible Evidence Rule, 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 limits, and other quantitative standards 

set by or under this Consent Decree must be met to the number of significant digits in 

which the standard or limit is expressed. For example, an Emission Rate of 0.070 

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lb/mmBTU is not met if the actual Emission Rate is 0.071 lb/mmBTU. NIPSCO shall 

round the fourth significant digit to the nearest third significant digit, or the third significant 

digit to the nearest second significant digit, depending upon whether the limit is expressed 

to three or two significant digits. For example, if an actual Emission Rate is 0.0704, 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 shall 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, enlarge 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 with respect to the settlement embodied in 

this Consent Decree, and supercedes all prior agreements and understandings among the 

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

agreement, understanding, or promise constitutes any part of this 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 compliance with such Rate or Removal Efficiency 

shall commence immediately upon the date specified, and that compliance as of such 

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specified date (e.g. December 30) shall be determined 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 SO2 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 included in the specified Monthly SO2 Removal Efficiency (e.g., 

where the Decree specifies that a 95% Monthly SO2 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 SO2 Removal Efficiency period, and no day or month prior to 

January 2011 shall be subject to the Monthly SO2 Removal Efficiency requirement or 

included in any calculation to determine compliance with such removal 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 later 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 specified 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). 

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XXVII. SIGNATORIES AND SERVICE 

203) Each undersigned representative of the Parties certifies that he or she is 

fully authorized to enter into the terms and conditions of this Consent Decree and to 

execute and legally bind to this document the Party he or she represents. 

204) This Consent Decree may be signed in counterparts, and such counterpart 

signature pages shall be given full force and effect. 

205) Each Party hereby agrees to accept service of process by mail with respect 

to all matters arising under or relating to this Consent Decree and to waive the formal 

service requirements set forth in Rule 4 of the Federal Rules of Civil Procedure and any 

applicable Local Rules of this Court including, but not limited to, service of a summons. 

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 Court expressly declines to enter this Consent 

Decree, in which case Defendant shall have no less than thirty (30) days after receiving 

notice of such express declination to file an answer or other 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 subject to the procedures of 28 C.F.R. § 50.7, 

which provides for notice of the lodging of this Consent Decree in the Federal Register, an 

opportunity for public comment, and the right of the United States to withdraw or withhold 

consent if the comments disclose facts or considerations which indicate that the Consent 

Decree is inappropriate, improper or inadequate. Defendant shall not oppose entry of this 

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Consent Decree by this Court or challenge any provision of this Consent Decree unless the 

United States or the State of Indiana has notified Defendant, in writing, 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 that 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 Enforcement Through the Consent Decree. 

After NIPSCO: 

a. has successfully completed construction, and has maintained operation, of 

all pollution controls as required 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) days of receipt of 

NIPSCO’s certification, then, for any Consent Decree violations that occur 

after the filing of notice, Plaintiffs shall pursue enforcement of the 

requirements contained in the Indiana SIP and Title V permit through the 

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APPENDIX A: ENVIRONMENTAL MITIGATION PROJECTS 

In compliance with and in addition to the requirements in Section XI of this Consent 

Decree (Environmental Mitigation Projects), NIPSCO 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 for 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 Project (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 environmental benefits of the Project, including an 

estimate of emission reductions (e.g., SO2 , 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 approved plan(s). Nothing in this Consent Decree shall 

be interpreted to prohibit NIPSCO from completing the Project(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 Project, including the estimated emission reductions 

or other environmental benefits achieved; and 

3.	 The Project Dollars incurred by NIPSCO in implementing the Project. 

1 
 
II. 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 precursors (the “Clean Diesel Retrofit Project”) 

and to fund the operation and maintenance of the retrofit equipment for the time-period 

described below. The Project shall include, where necessary, techniques and 

infrastructure needed to support such retrofits. 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 Section I. C. of this Appendix, the plan shall 

also satisfy the following criteria: 

a. Involve vehicles based in and equipment located in NIPSCO’s service 

territory in northern Indiana, bordered by the cities of Gary-Hammond, Michigan 

City, South Bend-Elkhart, and Fort Wayne. 

b. Provide for the retrofit of public diesel engines with EPA or California Air 

Resources Board (“CARB”) verified emissions control technologies to achieve 

the greatest reasonably possible mass reductions of particulates 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 retrofit diesel engines will be expected to achieve 

emission reductions of particulates and/or ozone precursors 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 reduction of particulates and/or ozone 

precursors. In making this determination, NIPSCO must take into account the 

particular operating criteria required for the EPA or CARB verified emissions 

control technology to achieve the verified emissions reductions. 

d. Provide for the retrofit of diesel engines with either: (a) diesel particulate 

filters (DPF); (b) diesel oxidation catalysts (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 specified in Section II.A.2.a that their fleet of vehicles 

may be eligible to participate in the Clean Diesel Retrofit Project and to solicit 

their interest in participating in the Project. 

2 
 
f. Describe the process and criteria NIPSCO 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 owners and operators, describe the amount 

of Project Dollars that will cover the costs 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 verified emissions 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 system) for five years from the date of 

installation, including the costs associated with the proper disposal of the waste 

generated from cleaning the verified emissions control technology. This Project 

shall not include costs for normal repair or operation of the retrofit diesel fleet. 

Include a mechanism to ensure that recipients of the retrofit equipment will bind 

themselves to follow the operating criteria required for the verified emissions 

control technology to achieve 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 criteria 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 obligation to reduce emissions through the retrofit of diesel 

engines. 

j. For any third party with whom NIPSCO might contract to carry out this 

Project, establish minimum standards that include prior experience 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 comply with local, state, and federal 

requirements for the disposal of the waste generated from the verified emissions 

control technology and follow CARB’s guidance for the proper disposal of such 

waste, provided however, that NIPSCO shall not be a guarantor of or responsible 

for the actions or omissions of the recipients. 

l. Include a schedule and budget for completing each portion of the Project, 

including funding for operation and maintenance of the retrofit equipment through 

December 31, 2015. 

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3. In addition to the information required to be included in the report pursuant to 

Section I.C, NIPSCO shall also describe the fleet owner/operator; where it implemented 

this Project; the particular types of verified emissions control technology (and the number 

of each type) that it installed pursuant to this Project; the type, year, and horsepower of 

each vehicle; an estimate of the number of citizens 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 implement in an area that would benefit from 

reductions of fine particle pollution and/or hazardous air pollutants by replacing, or 

retrofitting or upgrading inefficient, higher polluting wood-burning stoves and outdoor 

boilers with Energy Star qualified Heat Pumps, EPA Phase 2 hydronic heaters, natural 

gas boilers of 90% or higher AFUE, natural 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 that NIPSCO sponsors 

shall provide educational information (including, energy efficiency, health and safety 

benefits, and outreach regarding cleaner-burning 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 residential homeowners to replace their old, higher 

polluting and less energy efficient wood stoves or outdoor boilers. 

3. NIPSCO shall sponsor the implementation of any Wood Stove/Boiler Changeout 

and Retrofit Project in NIPSCO’s service area(s) in northern Indiana, bordered by the 

cities of Gary-Hammond, Michigan City, South Bend-Elkhart, and Fort Wayne that 

promise significant environmental benefit from the Wood Stove/Boiler Changeout and 

Retrofit Project. The Wood Stove/Boiler Changeout and Retrofit Project shall also 

include the counties of LaPorte, Lake, and Porter. In determining the specific areas to 

implement this Project within the aforementioned geographic area, NIPSCO shall give 

priority to areas with high amounts of air pollution, especially particle pollution and/or 

hazardous air pollutants, areas located within a geography and topography that makes it 

susceptible to high levels of particle pollution, or areas that have a significant number of 

old and/or higher polluting wood-burning stoves or outdoor boilers. 

4. The air pollution control agency(ies) and/or non-profit(s) that NIPSCO selects 

shall consult with EPA’s wood smoke team and implement any Wood Stove/Boiler 

Changeout and Retrofit Project consistent with the materials available on EPA’s Burn 

4 
 
Wise website at http://www.epa.gov/burnwise. 

5. In addition to the requirements of Section I.C , any plan to implement this Project 

shall also satisfy the following criteria: 

a. Identify the air pollution 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 nonprofits(s) to implement any Wood Stove/Boiler Changeout and Retrofit Project. 

c. Ensure that the air pollution control agency(ies) and/or non-profit(s) will 

implement any Wood Stove/Boiler Changeout and Retrofit Project in accordance 

with the requirements of this Appendix, and 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., geothermal heat pump, wood pellet stove, EPAcertified wood stove, gas stove, EPA Phase 2 qualified hydronic heater, natural 

gas boiler of 90% or higher AFUE, natural 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 revolving 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-profit. Up to 7% can be used for personnel cost and the 

remaining 3 % for other (e.g., outreach materials, training, studies/surveys, travel) 

project support costs. 

d. Describe all of the elements of any Wood Stove/Boiler Changeout and 

Retrofit Project that the air pollution control agency(ies) and/or nonprofit(s) will 

implement. NIPSCO shall describe and estimate the number of energy efficient 

appliances it intends to make available, the cost per unit, and the criteria the air 

pollution control agency(ies) and/or nonprofit(s) will use to determine which 

residential homeowners should be eligible for actual stove replacement. 

e. If applicable, identify any organizations 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 stove retailers, propane dealers, facilities 

that will dispose of old stoves so that they cannot be resold or reused, housing 

assistance agencies, local fire departments, local health organizations, and local 

green energy organizations. 

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f. 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 Restoration Project in Northwest Indiana 

1. Within 45 days from the Date of Entry, 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 Dunes National Lakeshore, and may include other 

lands in the northwest Indiana area, potentially affected by emissions form one or more 

of the NIPSCO Units. The stakeholder process will consist of a maximum of five 

members and, at minimum, shall include a representative from The Indiana Dunes 

National Lakeshore, a representative from Indiana Department of Natural Resources, and 

a representative from an environmental organization such as the Nature Conservancy. 

2. The goal of this Project will be the protection through acquisition and/or 

restoration of ecologically significant land, watersheds, vegetation, and forests within 

northwest Indiana using adaptive management techniques designed to improve ecosystem 

health and mitigate harmful effects from air pollution. For purposes of this Appendix and 

Section XI of this Consent Decree (Environmental Mitigation Projects), 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 shall be credited at fair market value and must provide 

for perpetual protection of the land. Restoration may include, by way of illustration, 

direct reforestation (particularly of tree species that may be affected by acidic deposition) 

and soil enhancement. Any restoration action must 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 ownership of a governmental entity that has 

a legal duty to conserve the land in perpetuity. Any proposal for acquisition of land must 

identify fully all owners of the interests in the land. Every proposal for acquisition or 

transfer of land must identify the ultimate holder of the interests to be acquired and 

provide a basis for concluding that the proposed holder of title is appropriate for longterm protection of the ecological and/or environmental benefits sought to be achieved 

through the acquisition. 

3. The Project(s) will focus on lands adjacent to, or near, the Indiana Dunes National 

Lakeshore, and may include other lands in the 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 Project would provide for acquisition, cleanup, 

invasive species control, and restoration of approximately 246 acres at and around 

the NIPSCO Michigan City site; and 

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b. Acquire, Restore, and Donate Land Adjacent to Indiana Dunes National 

Lakeshore: Funding for this Project would provide for acquisition and restoration 

of lands adjacent to the National 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 described in II.A and II.B. 

NIPSCO shall retain the discretion to determine 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 Entry 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 approved 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 expenditure 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 “Additional Environmental Mitigation Projects.” The Parties agree, 

subject to the requirements of this Appendix, that NIPSCO may in its discretion 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, consolidate 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 Entry. NIPSCO is not, however, precluded from 

accelerating payments to better effectuate a proposed 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 prior to approval that all Projects are consistent 

with federal law. 

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C. 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 motor vehicles. NIPSCO has a substantial fleet 

of motor vehicles where it operates. These motor vehicles are generally powered by 

conventional diesel or gasoline engines and include vehicles such as diesel “bucket” 

trucks. The use of hybrid engine technologies in NIPSCO’s motor vehicles, such as 

diesel-electric engines, will improve fuel efficiency and reduce emissions of NOX, PM, 

VOCs, and other air pollutants. 

2. As part of any plan for the Hybrid Fleet 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 with 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 engines in bucket trucks or 

other mobile sources with hybrid or electric engines, and/or propose the 

replacement of portions of NIPSCO’s fleet (including cars, vans, and pickup 

trucks) with hybrid and/or electric vehicles. For purposes of this subsection of this 

Appendix, “hybrid and/or electric vehicle” means a vehicle that can generate 

and/or utilize electric power to reduce the vehicles consumption of diesel or 

gasoline fuel. Any such vehicle proposed for inclusion in the Hybrid Fleet Project 

shall meet all applicable engine standards, certifications, and/or verifications. 

b. Propose a method to account for the amount 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 Vehicles 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 compared to the cost of a newly manufactured, 

similar motor vehicle powered by conventional diesel or gasoline engines. 

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D. Electric Vehicle Infrastructure Enhancement 

1. NIPSCO may undertake enhancements to the electric vehicle charging 

infrastructure by funding creation of one or more charging stations for electric vehicles in 

the Northwest Indiana area bordered by the cities of Gary-Hammond, Michigan City, 

South Bend-Elkhart, and Fort Wayne. Battery powered and some hybrid vehicles need 

plug-in infrastructure to recharge the batteries. Establishment of electric vehicle charging 

stations in Northwest Indiana could expand the useful driving range of electric vehicles in 

the Chicago metropolitan area as well as encourage Northwest Indiana drivers to 

purchase electric vehicles for local use as well 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 Project, it may partner with third party 

organizations (e.g., NIRPC, SSCC) to handle 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 consist 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 emissions reductions would depend upon the 

number of vehicles utilizing the facilities and would be based upon the type of vehicle the 

electric vehicle replaces in the general geographic area, the emissions characteristics and 

the annual vehicle miles traveled (VMT). For the term of this project NIPSCO would 

commit to effectively supply the vehicle charging station with zero emission renewable 

energy sources through the use of renewable energy 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 additional options to enhance electric 

vehicle usage, such as to: 

a. Provide a purchase incentive for acquisition of plug-in hybrid electric 

vehicle (PHEV), pure battery electric vehicle (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. 

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E. Residential and Commercial Electric to Natural Gas Conversion Project 

1. NIPSCO may submit a plan to EPA to implement a Residential and Commercial 

Electric to Natural Gas Conversion Project (“Conversion Project”) to reduce life cycle SO2, 

NOx, and PM and other air emissions resulting from residential and commercial space and water 

heating energy usage. If NIPSCO elects to perform this Conversion Project, the Conversion 

Project will consist of specific measures that will produce long-term, permanent, environmental 

benefits by the removal and replacement of electric resistance furnaces and water heaters with 

new high efficiency natural gas furnaces (92% or higher AFUE) and natural gas water heaters. 

The reduction in emissions of SO2 , 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% delivery efficiency for electricity) and the use of 

inherently cleaner burning natural gas compared to the overall predominance of coal based fuels 

in this subregion. The Conversion Project will be performed in and demonstrate SO2 , 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 Indiana Utility Regulatory Commission statewide mandate. 

2. If NIPSCO elects to undertake this Conversion Project, it may partner with third 

party organizations to handle funding and selection 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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