Northern Indiana Public 

Service Company Air Act 

Settlement Resources

Press Release (01/13/11) 

Consent Decree (PDF)

104pp, 471KB, About PDF)

"The pollution reductions 

achieved in this settlement 

will ensure that the people 

of Indiana and neighboring 

states have cleaner, 

healthier air to breathe. 

EPA is committed to 

advancing its national 

enforcement initiative to 

reduce air pollution from 

the largest sources of 

emissions." - Cynthia Giles, 

Assistant Administrator of EPA’s 

Office of Enforcement and 

Compliance and Assurance.

Northern Indiana Public Service Company Clean 

Air Act Settlement 

(Washington, DC - January 13, 2011) The U.S. Environmental 

Protection Agency (EPA) and the U.S. Justice Department 

today announced a global Clean Air Act settlement with 

Northern Indiana Public Service Co. (NIPSCO) that will cover 

all of NIPSCO’s coal-fired power plants, located in

Chestertown, Michigan City, Wheatfield and Gary, Ind. 

NIPSCO has agreed to invest approximately $600 

million in pollution control technology that will protect 

public health and resolve violations of the Clean Air 

Act. 

The settlement will require that NIPSCO spend $9.5 

million on environmental mitigation projects and pay a 

civil penalty of $3.5 million. The state of Indiana has 

been involved in the development of this settlement

and is a signatory. 

On this page:

Overview of Company and Location of Facilities 

Violations

Injunctive Relief 

Pollutant Reductions 

Health and Environmental Benefits 

Environmental Mitigation Projects 

Civil Penalty

Comment Period

The Power Plant Enforcement Effort

Contact 

Overview of Company and Location of Facilities

Northern Indiana Public Service Company (NIPSCO) is a corporation headquartered in 

Merrillville, Ind. It is the second largest electric distribution company in the state, with 

approximately 457,000 electric customers across the northern third of the state. 

The combined generating capacity of NIPSCO’s coal-fired facilities totals over 3,300 

megawatts (MW) of capacity. This settlement covers NIPSCO’s four coal-fired power plants: 

Bailly Station- Chestertown, Ind.

Dean H. Mitchell- Gary, Ind.

Michigan City Station- Michigan City, Ind.

R.N. Schahfer Station- Wheatfield, Ind.

Violations 

In September 2004, EPA issued a Notice of Violation to NIPSCO alleging that NIPSCO 

modified a number of its coal-fired power units without first complying with Clean Air Act 

Northern Indiana Public Service Company Clean Air Act Settlement | Compliance and En... Page 1 of 4

http://www.epa.gov/compliance/resources/cases/civil/caa/nipsco.html 9/12/2011
(CAA) pre-construction obligations that include obtaining pre-construction permits and 

installing and operating state-of-the-art pollution control technology (CAA Prevention of 

Significant Deterioration/Nonattainment New Source Review provisions, 42 U.S.C. §§ 7470-

7492, §§7501-7515; and Title V of the CAA).

Injunctive Relief

The consent decree secures injunctive relief from all of NIPSCO’s coal-fired power units. 

Compliance with the settlement will reduce nitrogen oxide (NOx) and sulfur dioxide (SO2) 

emissions by 64,000 tons per year from 2008 levels. It will also significantly reduce 

particulate matter (PM) emissions. NIPSCO estimates that the cost of the injunctive relief will 

be approximately $600 million. 

The settlement includes: 

Permanent retirement of the Dean H. Mitchell Station

Installation of three new flue gas desulfurization systems (FGD) at Schahfer 14, 

Schahfer 15, and Michigan City 12

Upgrades to existing FGD’s at the Bailly Station Units 7 and 8, and Schahfer Units 17 

and 18

Upgrades to the existing selective catalytic reduction systems (SCR’s) at the Bailly 

Station, Michigan City 12, and Schahfer 14 to achieve and maintain separate 

emissions rates, one on a 30-day rolling average basis, and the other on a 365-day 

rolling average basis

Installation and continuous operation of selective non-catalytic reduction (SNCR) at 

Schahfer 15

Optimization of existing PM controls to meet unit-specific emissions limitations

Compliance with annual system tonnage limitations for NOx and SO2

Annual surrender of any excess SO2 and NOx allowances resulting from actions taken 

under the consent decree 

Pollutant Reductions

As compared to NIPSCO’s 2008 emissions, EPA expects the following emission reductions to 

result from this settlement:

SO2 about 46,000 tons per year 

NOxabout 18,000 tons per year

PM emissions are expected to decline by about 4,500 tons per year, compared to NIPSCO’s 

current permitted PM limits. 

Health and Environmental Benefits 

The pollutants reduced under this settlement have numerous adverse environmental and 

health effects. Sulfur dioxides and nitrogen oxides can be converted to fine particulate matter 

once in the air. Fine particulates can be breathed in and lodged deep in the lungs, leading to 

a variety of health problems and even premature death. Other health and environmental 

impacts from the pollutants addressed in this settlement include the following: 

Sulfur Dioxide – High concentrations of SO2 affect breathing and may aggravate 

existing respiratory and cardiovascular disease. Sensitive populations include 

asthmatics, individuals with bronchitis or emphysema, children and the elderly. 

Sulfur dioxide is also a primary contributor to acid deposition, or acid rain. 

Northern Indiana Public Service Company Clean Air Act Settlement | Compliance and En... Page 2 of 4

http://www.epa.gov/compliance/resources/cases/civil/caa/nipsco.html 9/12/2011
Particulate Matter – Short term exposure to particulate matter can aggravate lung 

disease, cause asthma attacks and acute bronchitis, may increase susceptibility to 

respiratory infections and has been linked to heart attacks. 

Nitrogen Oxides – Nitrogen oxides can cause ground-level ozone, acid rain, particulate 

matter, global warming, water quality deterioration, and visual impairment. Nitrogen 

oxides play a major role, with volatile organic chemicals, in the atmospheric reactions 

that produce ozone. Children, people with lung diseases such as asthma, and people 

who work or exercise outside are susceptible to adverse effects such as damage to 

lung tissue and reduction in lung function. 

Environmental Mitigation Projects 

This settlement also requires NIPSCO to spend $9.5 million on environmental mitigation 

projects to address the impacts of past emissions. NIPSCO must spend a minimum of $3.5 

million of the total $9.5 million on Clean Diesel Retrofit, Woodstove/Outdoor Boiler 

Changeout, and Land Acquisition and Restoration projects. The remaining money may be 

spent on the Hybrid/Electric Fleet, Electric Infrastructure, and Electric to Natural Gas 

Conversion projects. 

The Clean Diesel Retrofit Project will require NIPSCO to retrofit in-service, public 

diesel engines with emission control equipment designed to reduce emissions of NOx

and volatile organic compounds (VOCs). 

The Woodstove/Outdoor Boiler Changeout Project will require NIPSCO to sponsor a 

wood-burning stove/outdoor boiler changeout and retrofit project. To do this, 

NIPSCO will provide incentives through rebates, discounts, and in some instances, 

actual replacement of old, inefficient, high polluting wood-burning technology for 

newer, low emitting, energy efficient technology, including geothermal heat pumps, 

EPA Phase 2 hydronic heaters, or EPA-certified woodstoves and hearth appliances. 

The Land Acquisition and Restoration Project will require NIPSCO to acquire/donate 

and restore lands adjacent to the Indiana Dunes National Lakeshore. Restoration 

may include, direct reforestation, particularly of tree species that may be affected by 

acidic deposition. NIPSCO may spend no more than $2 million on this project.

The Hybrid/Electric Fleet Project allows NIPSCO to elect to submit a plan for a hybrid 

and/or electric fleet project to reduce emissions from NIPSCO’s fleet of motor 

vehicles. NIPSCO may spend no more than $2 million on this project.

The Electric Infrastructure Project allows NIPSCO to elect to fund creation of one or 

more charging stations for electric vehicles in the Northwest Indiana. NIPSCO may 

spend no more than $2 million on this project. 

The Residential and Commercial Electric to Natural Gas Conversion Project allows 

NIPSCO to elect to fund the removal and replacement of electric resistance furnaces 

and water heaters and replace them with natural gas-fired units. NIPSCO may spend 

no more than $2 million on this project. 

Civil Penalty

NIPSCO will pay a total of $3.5 million in civil penalties. 

Comment Period

The proposed settlement, lodged in the U.S. District Court for the Northern District of 

Indiana, is subject to a 30-day public comment period and final court approval. Information 

on submitting comments is available at the Department of Justice website. 

Northern Indiana Public Service Company Clean Air Act Settlement | Compliance and En... Page 3 of 4

http://www.epa.gov/compliance/resources/cases/civil/caa/nipsco.html 9/12/2011
The Power Plant Enforcement Effort

The United States has filed lawsuits against a number of other utilities for alleged violations 

of the CAA. These cases seek to bring the power plant industry into full compliance with the 

New Source Review and Prevention of Significant Deterioration requirements of the CAA. 

This consent decree with NIPSCO represents the twenty-first judicial settlement under the 

power plant enforcement effort. 

The total combined sulfur dioxide and nitrogen oxides emission reductions secured from 

these settlements will be about 2 million tons each year once all the required pollution 

controls have been installed and implemented. More information about these settlements is 

available at the Coal-Fired Power Plant Enforcement Initiative website.

For more information, contact:

Seema Kakade 

U.S. Environmental Protection Agency (2242A) 

1200 Pennsylvania Ave., N.W. 

Washington, DC 20460-0001 

(202) 564-2416 

kakade.seema@epa.gov

Northern Indiana Public Service Company Clean Air Act Settlement | Compliance and En... Page 4 of 4

http://www.epa.gov/compliance/resources/cases/civil/caa/nipsco.html 9/12/2011