SETTLEMENT AGREEMENT WHEREAS, Plaintiffs Environmental Integrity Project and Sierra Club ("Plaintiffs") filed Civil Action No. 14-1196-CRC (D.D.C.) pursuantto section 304(a)(2) ofthe CleanAirAct ("CAA"), 42 U.S.C. § 7604(a)(2), alleging that Defendant GinaMcCarthy, in her official capacity as Administrator, United States Environmental Protection Agency ("EPA"), failed to perform a non-discretionary duty under CAA § 505(b)(2), 42 U.S.C. 

### § 7661d(b)(2), to grant or deny within 60 days three petitions ("Title V Petitions") submitted by Plaintiffs requesting that EPA objectto operating permits ("Permits") issuedbythe Texas Council on Environmental Quality ("TCEQ") to Luminant Generating Company. See Petition for Objection to Texas Title V PermitNo. 065 for the Operation ofthe Big Brown Steam Electric Station, Freestone County, Texas (Mar. 3, 2014) (Exhibit I) ("Big Brown Petition"); Petition for Objectionto Texas Title V PermitNo. 064 for the Operation ofthe Monticello Steam Electric Station, Titus County, Texas (Mar. 3, 2014) (Exhibit 2) ("Monticello Petition"); and Petition for Objection to Texas Title V PermitNo. 053 for the Operation ofthe Martin Lake Steam Electric Station in Rusk County, Texas (Feb. 24, 2014) (Exhibit 3) ("Martin Lake Petition"). WHEREAS, Plaintiffs and EPA ("the Parties") wishto effect a settlement ofCivil Action No. 14-1 I96-CRC (D.D.C.) without expensive andprotracted litigation; WHEREAS, the Parties considerthis SettlementAgreementto be an adequate and equitable resolution ofthe claims in Civil ActionNo. 14-1196-CRC (D.D.C.); NOW THEREFORE IT IS AGREED that: 1. By no later than January 23, 2015, EPA shall sign a response addressing the following issues from Plaintiffs' Title V Petitions:a. Big Brown Petition, Objection V.A (pp. 7-14); b. Monticello Petition, Objection V.A (pp. 5-11); and

c. Martin Lake Petition, Objection V.A (pp. 5-9). 2. By no later thanMay 15, 2015, EPA shall sign a response addressing the following issues from Plaintiffs' Title V Petitions:

a. Big Brown Petition, Objection V.D (pp. 17-20); b. Monticello Petition, Objection V.B (pp. 11-14); and

c. Martin Lake Petition, Objection V.B (pp. 9-14). 3. EPA shall have no obligationto respond to any issue in Plaintiffs' Title V Petitions except those specifically identified above. Within 60 days after execution ofthis Settlement Agreement by all Parties, Plaintiffs shall send a letter to the EPA Administrator withdrawing the remaining portions oftheir Big Brown Petition, namely:

a. Big Brown Petition, Objection V.B (pp. 14-15); and b. Big Brown Petition, Objection V.C (pp. 15-17). This letter may speciry that this withdrawal is contingent upon EPA'sperformance ofits obligations under Paragraphs 1, 2, and 4. 4. Following signature ofsuch responses to Plaintiffs' Title V Petitions, EPA shall expeditiously deliver notice ofEPA's response to the Office ofthe Federal Register for review and publication. Following such transmission, EPA shall not take any step (otherthan as necessary to correct any typographical error or other errors in form) to delay or otherwise interfere with publication ofsuch notice in the Federal Register. 5. IfEPA'sresponse to Plaintiffs' petition includes the granting ofany portion ofthe petition in whole or in part, EPA shall also promptly transmit the response to TCEQ. 26. EPA agrees to pay Plaintiffs' costs oflitigation, including attorneys' fees, pursuant to 42 U.S.C. § 7604(d). Within 30 days ofsignature ofthis Settlement Agreement by all Parties, Plaintiffs will provide EPA with a written request for costs oflitigation, including attorneys' fees, incurred priorto execution ofthis Settlement Agreement. EPA and Plaintiffs shall use good faith efforts to resolve informally any claim for costs oflitigation, including attorneys' fees. 7. Anyprovision ofthis Settlement Agreement may be modified by written agreement ofthe Parties. 8. The Parties recognize that the possibility exists that circumstances outside the reasonable control ofEPA could delay compliance with the timetables contained inthis SettlementAgreement. Such situations include, but are not limited to, a government shut-down such as occurred in 1995,1996, and 2013, or catastrophic environmental events requiring immediate and/or time-consuming response by EPA. Should a delay occur due to such circumstances, any resulting failure to meet the timetables set forth herein shall not constitute a failure to comply with the terms ofthis SettlementAgreement, and the Parties will meet and confer about the extension ofany deadlines occurring within one hundred twenty (120) days ofthe termination ofthe delay. Such dates shall be extended no less than one day for each day ofthe delay. EPA will provide Plaintiffs with notice as soon as is reasonably possible under the circumstances in the eventthat EPA invokes this term ofthe Settlement Agreement and will provide Plaintiffs with an explanation ofEPA's basis for invoking this term. Plaintiffs may challenge the invocation ofthis term ofthis Settlement Agreement by filing a new complaint pursuant to Paragraph 11 below. EPA shall bearthe burden of justifying its invocation ofthis term. 39. The Parties agree that, within 15 days after all Parties have signedthe Settlement Agreement, Plaintiffs shall file a motion for voluntary dismissal withoutprejudice ofCivil ActionNo. 14-1196 (D.D.C.), in accordance withRule 41(a) ofthe Federal Rules ofCivil Procedure. lOInthe event ofa disagreement betweenthe Parties concerningthe interpretation or performance ofany aspect ofthis Settlement Agreement, the dissatisfied Party shallprovide the other Party with written notice ofthe dispute and a request for negotiations. The Parties shall

meet and confer in orderto attemptto resolve the dispute within 30 days ofthe written notice, Of suchtime thereafter as is mutually agreed. Ifthe Parties are unable to resolvethe dispute within 60 days ofsuchmeeting, Plaintiffs' sole remedy is to file a new lawsuit pursuant to Paragraph II below. EPA does not waive orlimit any defense relating to such litigation. The Parties agree that contempt ofcourt is not anavailable remedy under this Settlement Agreement or in Civil Action No. 14-1196 (D.D.C.). II. IfEPA fails to take action as set forth inParagraphs I, 2, or 4 above, the Plaintiffs' sole remedy under this Settlement Agreement shall be to file a new complaint asserting the claim(s) related to any actionrequired by this SettlementAgreement thatEPA did

notperform by the deadlines established above. EPA does notwaive or limit any defense relating to such litigation. The Parties agree that contempt ofcourt is not an available remedy under this Settlement Agreement 12. Plaintiffs and EPA agree that performance ofthe obligations described in Paragraphs I, 2, 3, 4, and 6 shall constitute a complete and final settlement ofall claims that Plaintiffshave asserted againstthe United States, including EPA, under any provision oflaw in connection with Civil ActionNo. 14-1 I96-CRC (D.D.C.). Plaintiffs therefore discharge and 4covenant not to sue the United States, including EPA, for any such claims except as authorized by Paragraph 11 above. 13. Nothing in this Settlement Agreement shall be construed to limit or modifY any discretion accorded EPA by the CAA orby general principles ofadministrative law in taking the actions which are the subject ofthis SettlementAgreement, including discretion to alter, amend,

or revise any responses or final actions contemplatedby this Settlement Agreement. EPA's obligation 

### to perform the actions specified in Paragraphs 1 and 2 bythe time specified therein does not constitute a limitation ormodification ofEPA's discretion within the meaning ofthis paragraph. 14. Nothing in this Settlement Agreement shall be construed as an admission ofany issue offact or law nor to waive or limit any claim or defense, on any grounds, the Parties may have related to any final action EPA may take withrespect to these Petitions. 15. Nothing inthis Settlement Agreement shall be construed to conferupon the District Courtjurisdiction to review any issues that are within the exclusivejurisdiction ofthe United States Court ofAppeals pursuant to CAA section 307(b)(l), 42 U.S.c. § 7607(b)(l). Nothing in the terms ofthis Settlement Agreement shall be construed to waive any remedies or defenses the Parties may have under CAA sections 307(b)(1) and 505, 42 U.S.C. §§ 7607(b)(1), 7661d, in any action before the United States Court ofAppeals. 16. The obligations imposed upon EPA under this SettlementAgreement can only be undertaken using appropriated funds. No provision ofthis Settlement Agreement shall be interpreted as orconstitute a commitment or requirement that EPA obligate orpay funds in contravention ofthe Anti-Deficiency Act, 31 U.S.C. § 1341, or any other applicable provision of law. 517. Any notices required orprovided for by this Settlement Agreement shall be made in writing and sent to the following: ForPlaintiffs: Ilan Levin Environmental Integrity Project 1002 West Avenue Suite 305 Austin, TX 78701 Tel: (512) 637-9479 Fax: (512) 584-8019 ilevin@environmentalintegrity.org For Defendants: EileenMcDonough United States Department ofJustice Environmental Defense Section P.O. Box 7611 Washington, D.C. 20044 Tel: (202) 514-3126 Fax: (202) 514-8865 eileen.mcdonough@usdoj.gov Karen Bennett Bianco U.S. Environmental Protection Agency Office ofGeneral Counsel 1200 PennsylvaniaAve., N.W. Washington, D.C. 20460 Tel: (202) 564-3298 bianco.karen@epa.gov Richard Bartley U.S. Environmental ProtectionAgency Office ofRegional Counsel, Region 6 1445 Ross Avenue Suite 1200 Mail Code: 6RC Dallas, TX 75202-2733 Tel: (214) 665-8046 Bartley.richard@Epagov

618. The Parties agree and acknowledge thatbefore this Settlement Agreement becomes fmal and binding upon EPA, EPA mustprovide notice ofthis Settlement Agreement in the Federal Register and an opportunity for commentpursuantto CAA section 113(g), 42 U.S.C. § 7413(g). After the Assistant Attorney General ofthe Environment and Natural Resources Divisionhas authorized publication ofnotice ofthis Settlement Agreement, EPA will expeditiously transmit the appropriate notice to the Office ofthe Federal Register. After this Settlement Agreement has undergone an opportunity for notice and comment, the Administrator and/or the Attorney General, as appropriate, shall promptly consider any such written comments in determining whether to withdraw orwithhold consent to this SettlementAgreement, in accordance with section 113(g) ofthe CAA. Ifthe federal government elects not to withdraw or withhold consentto this SettlementAgreement, EPAwill expeditiously provide written notice of that election to Plaintiffs. 19. It is hereby expressly understood and agreed that this SettlementAgreement was jointly drafted by Plaintiffs and EPA and that any and all rules ofconstruction to the effectthat ambiguity is construed against the drafting party shall be inapplicable in any dispute concerning the terms, meaning, or interpretation ofthis SettlementAgreement.

720. The undersigned representatives ofeach Party certify thatthey are fully authorized by the Partythey represent to bindthat Partyto the terms ofthis Settlement Agreement.

SO AGREED: FOR PLAINTIFFS

FORDEFENDANTS

# dlQb{j.Le~vin~·/V"~--7~i:..:::=---./ Environmental Integrity Project 1002 WestAvenue Suite 305 Austin, TX 78701 Tel: (512) 637-9476 Fax: (512) 584-8019 ilevin@environmentalintegrity.org

Dated:

SAM HIRSH Acting Assistant Attorney General Environment & Natural Resources Division

Eileen T. McDonough United States Department ofJustice Environmental Defense Section P.O. Box 7611 Washington, D.C. 20044 Tel: (202) 514-3126 Fax: (202) 514-8865 eileen.mcdonough@usdoj.gov
Dated:

________ _

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