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## Fed er a l Con se n t Dec re esT h i s page i n t en t i o n al l y l ef t b l an k._____________________________________

_____________________________________ IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

UNITED STATES OF AMERICA ) ) Plaintiff, ) ) and ) ) STATE OF NEW YORK, ET AL., ) ) Plaintiff-Intervenors, ) ) v. ) ) ) AMERICAN ELECTRIC POWER SERVICE ) ) CORP., ET AL., ) ) Defendants. ) ) _____________________________________)

UNITED STATES OF AMERICA ) ) Plaintiff, ) ) ) v. ) ) ) AMERICAN ELECTRIC POWER SERVICE ) CORP., ET AL

. , ) ) ) Defendants. ) ) _____________________________________) JUDGE EDMUND A. SARGUS, JR. Magistrate Judge Terence P. Kemp

Civil Action No C2-99-1250 (Consolidated with C2-99-1182)

JUDGE GREGORY L. FROST Magistrate Judge Norah McCann King

Civil Action No C2-05-360_____________________________________ ) OHIO CITIZEN ACTION, ET AL., ) ) Plaintiffs, ) ) v. ) JUDGE GREGORY L. FROST ) Magistrate Judge Norah McCann King ) AMERICAN ELECTRIC POWER SERVICE ) CORP., ET AL., ) Civil Action No. C2-04-1098 ) Defendants. ) )

CONSENT DECREETABLE OF CONTENTS I. JURISDICTION AND VENUE

.................................................................................................. 4 II. APPLICABILITY

...................................................................................................................... 5 III. DEFINITIONS

.......................................................................................................................... 5 IV. NO x EMISSION REDUCTI ONS AND C ONTROLS

........................................................... 19 A. Eastern System-Wide Annual Tonnage Limitations for NO x ................................ 19 B. NO x Emission Limitations and Control Requirements

.......................................... 20 C. General Provisions for Use and Surrender of NO x Allowances

............................ 22 D. Use of Excess NO x Allowances

............................................................................. 23 E. Super-Compliant NO x Allowances

........................................................................ 26 F. Method for Surrender of Excess NO x Allowances

................................................ 26 G. Reporting Requirements for NO x Allowances

....................................................... 28 H. General NO x Provisions

......................................................................................... 28 V. SO 2 EMISSION REDUCTI ONS AND CONTROLS

............................................................. 28 A. Eastern System-Wide Annual Tonnage Limitations for SO 2 ................................ 28 B. SO 2 Emission Limitations and Control Requirements

.......................................... 29 C. Use and Surrender of SO 2 Allowances

.................................................................. 32 D. Method for Surrender of Excess SO 2 Allowances

................................................. 33 E. Super-Compliant SO 2 Allowances.......................................................35 F. Reporting Requirements for SO 2 Allowances.......................................

... 35 G. General SO 2 Provisions ...................................................................35 VI. PM EMISSION REDUCTIONS AND CONTROLS..............................................35 A. Optimization of Existing ESPs

.............................................................................. 35 B. PM Emission Rate and Testing

.............................................................................. 36 C. PM Emissions Monitoring

..................................................................................... 37 D. Installation and Operation of PM CEMS .............................................

.. 38 E. PM Reporting

......................................................................................................... 40 F. General PM Provisions

.......................................................................................... 40 VII. PROHIBITION ON NETTING CREDITS OR OFFSETS FROM REQUIRED CONTROLS

...................................................................................................................... 4 1VIII. ENVIRONMENTAL MITIGATION PROJECTS

.............................................................. 41 A. Requirements for Projects Desc ribed in Appendix A ($36 million)

..................... 42 B. Mitigation Projects to be Conducted by the States ($24 million)

.......................... 43 IX. CIVIL PENALTY

.............................................................................................................. ..... 45 X. RESOLUTION OF CIVIL CLAIMS AGAINST DEFENDANTS

......................................... 46 A. Resolution of the United States’ Civil Claims

....................................................... 46 B. Pursuit by the United States of Civil Claims Otherwise Resolved by Subsection A

.......................................................................................................... 48 C. Resolution of Past Claims of th e States and Citizen Plaintiffs and Reservation of Rights

............................................................................................. 51 XI. PERIODIC REPORTING

.................................................................................................. 52 XII. REVIEW AND A PPROVAL OF SUBMITTALS

............................................................ 54 XIII. STIPULATED PENALTIES

............................................................................................. 55 XIV. FORCE MAJEURE

........................................................................................................... 61 XV. DISPUTE RESOLUTION

................................................................................................. 64 XVI. PERMITS

........................................................................................................................... 66 XVII. INFORMATION COLLECTION AND RETENTION

.................................................... 69 XVIII. NOTICES

.......................................................................................................................... 70 XIX. SALES OR TRANSFERS OF OPERATIONAL OR OWNERSHIP INTERESTS

......... 74 XX. EFFECTIVE DATE

........................................................................................................... 7 6 XXI. RETENTION OF JURISDICTION

................................................................................... 76 XXII. MODIFICATION

............................................................................................................. . 77 XXIII. GENERAL PROVISIONS

................................................................................................. 77 XXIV. SIGNATORIE S AND SERVICE

..................................................................................... 79 XXV. PUBLIC COMMENT

......................................................................................................... 80 XXVI. CONDITIONAL TERMINATION OF ENFORCEMENT UNDER DECREE

............... 80 XXVII. FINAL JUDGMENT

........................................................................................................ 82 Appendix A: Environmental Mitigation Projects Appendix B: Reporting Requirements Appendix C: Monitoring Strategy and Ca lculation of 30-Day Rolling Average Removal Efficiency for Conesville Units 5 and 6WHEREAS, the following complaints have been filed against American Electric Power Service Corporation, Indiana Michigan Power Company, Ohio Power Company, Appalachian Power Company, Cardinal Operating Company, and Columbus Southern Power Company in the above-captioned cases, United States, et al. v. American Electric Power Service Corp ., et al. , Civil Action Nos. C2-99-1182 and C2-99-1250 (“ AEP I ”) and United States, et al. v. American Electric Power Service Corp., et al. , Civil Action Nos. C2-04-1098 and C2-05-360 (“ AEP II ”): (a) the United States of America (“United States”), on behalf of the United States Environmental Protection Agency (“EPA”), filed initial complaints on November 3, 1999 and April 8, 2005, and filed amended complaints on March 3, 2000 and September 17, 2004, pursuant to Sections 113(b), 165, and 167 of the Clean Air Act (the “Act”), 42 U.S.C. §§ 7413, 7475, and 7477; (b) the States of New York, Connectic ut, New Jersey, Vermont, New Hampshire, Maryland, and Rhode Island, and the Commonwealth of Massachusetts, after their motion to intervene was granted, filed initial complaints on December 14, 1999 and November 18, 2004, and filed amended complaints on April 5, 2000, September 24, 2002, and September 17, 2004, pursuant to Section 304 of the Act, 42 U.S.C. § 7604; and (c) Ohio Citizen Action, Citizens Action Coalition of Indiana, Hoosier Environmental Council, Valley Watch, Inc., Ohio Valley Environmental Coalition, West Virginia Environmental Council, Clean Air Council, Izaak Walton League of America, United States Public Interest Research Group, National Wildlife Federation, Indiana Wildlife Federation, League of Ohio Sportsmen, Sierra Club, and Natural Resources Defense Council,Inc. filed an initial complaint on November 19, 1999, and filed amended complaints on January 1, 2000 and September 16, 2004, pursuant to Section 304 of the Act, 42 U.S.C. § 7604; WHEREAS, the complaints filed against Defendants in AEP I and AEP II sought injunctive relief and the assessment of civil penalties for alleged violations of, inter alia , the: (a) Prevention of Significant Deterior ation and Nonattainment New Source Review provisions in Part C and D of S ubchapter I of the Act, 42 U.S.C. §§ 7470

- 7492, 7501-7515; and (b) federally-enforceable state implementation plans developed by Indiana, Ohio, Virginia, and West Virginia; WHEREAS, EPA issued notices of violati on (“NOVs”) to Defendants with respect to such allegations on November 2, 1999, November 22, 1999, and June 18, 2004; WHEREAS, EPA provided Defendants and the States of Indiana, Ohio, and West Virginia, and the Commonwealth of Virginia, with actual notice pertaining to Defendants’ alleged violations, in accordance with Section 113(a)(1) and (b) of the Act, 42 U.S.C. § 7413(a)(1) and (b); WHEREAS, in their complaints, the United States, the States, and Citizen Plaintiffs (collectively, the “Plaintiffs”) alleged, inter alia, that Defendants made major modifications to major emitting facilities, 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 further alleged that such emissions damage human health and the environment;

2WHEREAS, the Plaintiffs’ complaints state claims upon which relief can be granted against Defendants under Sections 113, 165, and 167 of the Act, 42 U.S.C. §§ 7413, 7475, and 7477, and 28 U.S.C. § 1355; WHEREAS, Defendants have denied and conti nue to deny the violations alleged in the complaints and NOVs, maintain that they have been and remain in compliance with the Act and are not liable for civil penalties or injunctive relief, and state that they are agreeing to the obligations imposed by this Consent Decree solely to avoid the costs and uncertainties of litigation and to improve the environment; WHEREAS, Defendants have installed and operated SCR technology on several Units in the AEP Eastern System, as those terms are defined herein, during the five (5) month ozone season to achieve emission reductions in compliance with the NO x SIP Call; WHEREAS, the Plaintiffs and Defendants anticipate that this Consent Decree, including the installation and operation of pollution control technology and other measures adopted pursuant to this Consent Decree, will achieve significant reductions of emissions from the AEP Eastern System and thereby significantly improve air quality; WHEREAS, the liability phase of AEP I was tried on July 6-7, 2005, and July 11-12, 2005, and no decision has been rendered; 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 arm’s length; that this settlement is fair, reasonable, and in the public interest, and consistent with the goals of the Act; and that entry of this Consent Decree without fu rther litigation is the most appropriate means of resolving this matter;

3NOW, THEREFORE, without any admission by De fendants, and without adjudication of the violations alleged in the complaints or the NOVs, 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, Sections 113, 167, and 304 of the Act, 42 U.S.C. §§ 7413, 7477, and 7604. Solely for the purposes of this Consent Decree, 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). Solely for the purposes of this Consent Decree and the underlying complaints, and for no other purpose, Defendants waive all objections and defenses that they may have to the Court’s jurisdiction over this action, to the Court’s jurisdiction over Defendants, and to venue in this District. Defendants shall not challenge the terms of this Consent Decree or this Court’s jurisdiction to ente r and enforce this Consent Decree. Solely for the purposes of the complaints filed by the Plaintiffs in this matter and resolved by the Consent Decree, for the purposes of entry and enforcem ent of this Consent Decree, and for no other purpose, Defendants waive any defense or objec tion based on standing. Except as expressly provided for herein, this Consent Decree shall not create any rights in or obligations of any party other than the Plaintiffs and Defendants. Ex cept as provided in Section XXV (Public Comment) of this Consent Decree, the Parties consent to entry of this Consent Decree without further notice. To facilitate entry of this Consent Decree, upon the Date of Lodging of this Consent Decree the Parties shall file a Joint Motion to Consolidate AEP I and AEP II so that AEP II is consolidated into AEP I

. 4II. APPLICABILITY 2. Upon entry, the provisions of the Consent Decree shall apply to and be binding upon and inure to the benefit of Plaintiffs and Defendants, and their respective successors and assigns, and upon their officers, employees, and agents, solely in their capacities as such. 3. Defendants shall be responsible for providing a copy of this Consent Decree to all vendors, suppliers, consultants, contractors, agents, and any other company or other organization retained to perform any of the work require d by this Consent Decree. Notwithstanding any retention of contractors, subcontractors, or agents to perform any work required under this Consent Decree, Defendants shall be responsible for ensuring that all work is performed in accordance with the requirements of this Consen t Decree. For this reason, in any action to enforce this Consent Decree, Defendants shall not assert as a defense the failure of their officers, directors, employees, servants, agents, or contractors to take actions necessary to comply with this Consent Decree, unless Defendants establish that such failure resulted from a Force Majeure Event, as defined in Paragraph 158 of this Consent Decree. III. DEFINITIONS 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. 4. A “1-hour Average NO x Emission Rate” for a re-powered gas-fired, electric generating unit means, and shall be expressed as, the average concentration in parts per million

5(“ppm”) by dry volume, corrected to 15% O 2 , as averaged over one (1) hour. In determining the 1-Hour Average NO x Emission Rate, Defendants shall use CEMS in accordance with applicable reference methods specified in 40 C.F.R. Part 60 to calculate the emissions for each 15-minute interval within each clock hour, except as provided in this Paragraph. Compliance with the 1

- Hour Average NO x Emission Rate shall be shown by averaging all 15-minute CEMS interval readings within a clock hour, except that any 15-mi nute CEMS interval that contains any part of a startup or shutdown shall not be included in the calculation of that 1-Hour average. A minimum of two 15-minute CEMS interval readings within a clock hour, not including startup or shutdown intervals, is required to determine compliance with the 1-Hour average NO x Emission Rate. All emissions recorded by CEMS shall be reported in 1-Hour averages. 5. A “30-Day Rolling Average Emission Rate” for a Unit means, and shall be expressed as, a 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; 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. A new 30-Day Rolling Average Emission Rate shall be calculated for each new Operating Day. 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 as follows:

a. Emissions and BTU inputs that occur during a period of Malfunction shall be excluded from the calculation of the 30-Day Rolling Average Emission

6Rate if Defendants provide notice of the Malfunction to EPA in accordance with Paragraph 159 in Section XIV (Force Majeure) of this Consent Decree; b. Emissions of NO x and BTU inputs that occur during the fifth and subsequent Cold Start Up Period(s) that occur at a given Unit during any 30-day period shall be excluded from the calculation of the 30-Day Rolling Average Emission Rate if inclusion of such emissions would result in a violation of any applicable 30-Day Rolling Average Emission Rate and Defendants have installed, operated, and maintained the SCR in question in accordance with manufacturers’ specifications and good engineering practices. A “Cold Start Up Period” occurs whenever there has been no fire in the boiler of a Unit (no combustion of any Fossil Fuel) for a period of six (6) hours or more. The NO x emissions to be excluded during the fifth and subsequent Cold Start Up Period(s) shall be the lesser of (i) those NO x emissions emitted during the eight (8) hour period commencing when the Unit is synchronized with a utility electric distribution system and concluding eight (8) hours later, or (ii) those NO x emissions emitted prior to the time that the flue gas has achieved the minimum SCR operational temperature specified by the catalyst manufacturer; and

c. For SO 2 , shall include all emissions and BTUs commencing from the time the Unit is synchronized with a utility electric distribution system through

7the time that the Unit ceases to combust fossil fuel and the fire is out in the boiler. 6. A “30-Day Rolling Average Removal Efficiency” means, for SO 2 , at a Unit other than Conesville Unit 5 and Conesville Unit 6, the percent reduction in the mass of SO 2 achieved by a Unit’s FGD system over a 30-Operating Day period and shall be calculated as follows: step one, sum the total pounds of SO 2 emitted as measured at the outlet of the FGD system for the Unit during the current Operating Day and the previous twenty-nine (29) Operating Days as measured at the outlet of the FGD system for that Unit; step two, sum the total pounds of SO 2 delivered to the inlet of the FGD system for the Unit during the current Operating Day and the previous twenty-nine (29) Operating Days as measured at the inlet to the FGD system for that Unit; step three, subtract the outlet SO 2 emissions calculated in step one from the inlet SO 2 emissions calculated in step two; step four, divide the remainder calculated in step three by the inlet SO 2 emissions calculated in step two; and step five, multiply the quotient calculated in step four by 100 to express as a percentage of re moval efficiency. A new 30-day Rolling Average Removal Efficiency shall be calculated for each new Operating Day, and shall include all emissions that occur during all periods within each Operating Day except that emissions that occur during a period of Malfunction may be excluded from the calculation if Defendants provide Notice of the Malfunction to Plaintiffs in accordance with Section XIV (Force Majeure) and it is determined to be a Force Majeure Event pursuant to that Section. 7. “AEP Eastern System” means, solely for purposes of this Consent Decree, the following coal-fired, electric steam generating Units (with the nominal nameplate net capacity of each Unit):

8a. Amos Unit 1 (800 MW), Amos Unit 2 (800 MW), and Amos Unit 3 (1300 MW) located in St. Albans, West Virginia; b. Big Sandy Unit 1 (260 MW) and Big Sandy Unit 2 (800 MW) located in Louisa, Kentucky;

c. Cardinal Unit 1 (600 MW), Cardinal Unit 2 (600 MW), and Cardinal Unit 3 (630 MW) located in Brilliant, Ohio; d. Clinch River Unit 1 (235 MW), Clinch River Unit 2 (235 MW), and Clinch River Unit 3 (235 MW) located in Carbo, Virginia;

e. Conesville Unit 1 (125 MW), Conesville Unit 2 (125 MW), Conesville Unit 3 (165 MW), Conesville Unit 4 (780 MW), Conesville Unit 5 (375 MW), and Conesville Unit 6 (375 MW) located in Conesville, Ohio; f. Gavin Unit 1 (1300 MW) and Gavin Unit 2 (1300 MW) located in Cheshire, Ohio; g. Glen Lyn Unit 5 (95 MW) and Glen Lyn Unit 6 (240 MW) located in Glen Lyn, Virginia; h. Kammer Unit 1 (210 MW), Kammer Unit 2 (210 MW), and Kammer Unit 3 (210 MW) located in Moundsville, West Virginia; i. Kanawha River Unit 1 (200 MW) and Kanawha River Unit 2 (200 MW) located in Glasgow, West Virginia; j. Mitchell Unit 1 (800 MW) and Mitchell Unit 2 (800 MW) located in Moundsville, West Virginia; k. Mountaineer Unit 1 (1300 MW) located in New Haven, West Virginia;

9l. Muskingum River Unit 1 (205 MW), Muskingum River Unit 2 (205 MW), Muskingum River Unit 3 (215 MW), Muskingum River Unit 4 (215 MW), and Muskingum River Unit 5 (585 MW) located in Beverly, Ohio;

m. Picway Unit 9 (100 MW) located in Lockbourne, Ohio;

n. Rockport Unit 1 (1300 MW) and Rockport Unit 2 (1300 MW) located in Rockport, Indiana;

o. Sporn Unit 1 (150 MW), Sporn Unit 2 (150 MW), Sporn Unit 3 (150 MW), Sporn Unit 4 (150), and Sporn Unit 5 (450 MW) located in New Haven, West Virginia; and p. Tanners Creek Unit 1 (145 MW), Tanners Creek Unit 2 (145 MW), Tanners Creek Unit 3 (205 MW), and Tanners Creek Unit 4 (500 MW) located in Lawrenceburg, Indiana. 8. “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 (firebox, boiler tubes, and walls); and (d) draft system (excluding the stack), all as further described in “Interpretation of Reconstruction,” by John B. Rasnic, U.S. EPA (November 25, 1986) and attachments thereto. 9. “CEMS” or “Continuous Emission Monitoring System” means, for obligations involving NO x and SO 2 under this Consent Decree, the devices defined in 40 C.F.R. § 72.2 and installed and maintained as required by 40 C.F.R. Part 75. 10. “Citizen Plaintiffs” means, collectively, Ohio Citizen Action, Citizens Action Coalition of Indiana, Hoosier Environmental Council, Ohio Valley Environmental Coalition,

10West Virginia Environmental Council, Clean Air Council, Izaak Walton League of America, United States Public Interest Research Group, National Wildlife Federation, Indiana Wildlife Federation, League of Ohio Sportsmen, Sierra Club, and Natural Resources Defense Council, Inc. 11. “Clean Air Act” or “Act” means the federal Clean Air Act, 42 U.S.C. §§ 7401

- 7671q, and its implementing regulations. 12. “Clean Air Interstate Rule” or “CAIR” means the regulations promulgated by EPA on May 12, 2005, at 70 Fed. Reg. 25,161, which are entitled, “Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone (C lean Air Interstate Rule); Revisions to Acid Rain Program; Revisions to NO x SIP Call; Final Rule,” and any subsequent amendments to that regulation, and any applicable, federally-approved state implementation plan or the federal implementation plan to implement CAIR. 13. “Consent Decree” or “Decree” means this Consent Decree and the appendices attached hereto, which are incorporated into this Consent Decree. 14. “Continuously Operate” or “Continuous Operation” means that when an SCR, FGD, ESP, or Other NO x Pollution Controls are used at a Unit, except during a Malfunction, they shall be operated at all times such Unit is in operation, consistent with the technological limitations, manufacturers’ specifications, and good engineering and maintenance practices for such equipment and the Unit so as to minimize emissions to the greatest extent practicable. 15. “Date of Entry” means the date this Consent Decree is approved or signed by the United States District Court Judge; provided, how ever, that if the Parties’ Joint Motion to Consolidate, as specified in Paragraph 1, is denied or not decided, then the “Date of Entry”

11means the date that the last of the two United States District Court Judges hearing these cases approves or signs this Consent Decree. 16. “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 Southern District of Ohio. 17. “Day” means, unless otherwise specified, calendar day. 18. “Defendants” or “AEP” means American Electric Power Service Corporation, Kentucky Power Company d/b/a American Electric Power, Indiana Michigan Power Company d/b/a American Electric Power, Ohio Power Comp any d/b/a American Electric Power, Cardinal Operating Company and its owners (Ohio Power and Buckeye Power, Inc.), Appalachian Power Company d/b/a American Electric Power, a nd Columbus Southern Power Company d/b/a American Electric Power. 19. “Eastern System-Wide Annual Tonnage Limitation” means the limitations, as specified in this Consent Decree, on the number of tons of the air pollutants that may be emitted from the AEP Eastern System during the relevant calendar year ( i.e. , January 1 through December 31), and shall include all emissions of the air pollutants emitted during all periods of startup, shutdown, and Malfunction, except that emissions that occur during a period of Malfunction may be excluded from the calcula tion if Defendants provide Notice of the Malfunction to Plaintiffs in accordance with Section XIV (Force Majeure) and it is determined to be a Force Majeure Event pursuant to that Section. 20. “Emission Rate” means the number of pounds of pollutant emitted per million BTU of heat input (“lb/mmBTU”), measured in accordance with this Consent Decree. 21. “EPA” means the United States Environmental Protection Agency.

1222. “ESP” means electrostatic precipitator, a pollution control device for the reduction of PM. 23. “Environmental Mitigation Project” means a project funded or implemented by Defendants as a remedial measure to mitigate alleged damage to human health or the environment, including National Parks or Wilderness Areas, claimed to have been caused by the alleged violations described in the complaints or to compensate Plaintiffs for costs necessitated as a result of the alleged damages. 24. “Existing Unit” means a Unit that commenced operation prior to the Date of Lodging of this Consent Decree. 25. “Flue Gas Desulfurization System,” or “FGD,” means a pollution control device with one or more absorber vessels that employs flue gas desulfurization technology for the reduction of SO 2 . 26. “Fossil Fuel” means any hydrocarbon fuel, including coal, petroleum coke, petroleum oil, or natural gas. 27. An “Improved Unit” for NO x means an AEP Eastern System Unit equipped with an SCR or scheduled under this Consent Decree to be equipped with an SCR, or required to be Retired, Retrofitted, or Re-powered. A Unit may be an Improved Unit for one pollutant without being an Improved Unit for another. Any Other Unit in the AEP Eastern System can become an Improved Unit for NO x if it is equipped with an SCR and the requirement to Continuously Operate such SCR is incorporated into a federally-enforceable non-Title V permit or site-specific amendment to the state implementation plan and the Title V Permit applicable to that Unit.

1328. An “Improved Unit” for SO 2 means an AEP Eastern System Unit equipped with an FGD or scheduled under this Consent Decree to be equipped with an FGD, or required to be Retired, Retrofitted, or Re-powered. A Unit may be an Improved Unit for one pollutant without being an Improved Unit for another. Any Other Unit in the AEP Eastern System can become an Improved Unit for SO 2 if it is equipped with an FGD and the requirement to ContinuouslyOperate such FGD is incorporated into a federally-enforceable non-Title V permit or sitespecific amendment to the state implementation plan and the Title V Permit applicable to that Unit. 29. “KW” means kilowatt or one thousand watts. 30. “lb/mmBTU” means one pound per million British thermal units. 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. “MW” means a megawatt or one million watts. 33. “NSR Permit” means a preconstruction permit issued by the permitting authority pursuant to Parts C or D of Subchapter I of the Clean Air Act. 34. “National Ambient Air Quality Standards” or “NAAQS” means national ambient air quality standards that are promulgated pursuant to Section 109 of the Act, 42 U.S.C. § 7409. 35. “New and Newly Permitted Unit” means a Unit that commenced operation after the Date of Lodging of this Consent Decree, and that has been issued a final NSR Permit for SO 2 and NO x that includes applicable Best Available Control Technology (“BACT”) and/or Lowest

14Achievable Emission Rate (“LAER”) limitations, as those terms are respectively defined at 42 U.S.C. §§ 7479(3), 7501(3). 36. “Nonattainment NSR” means the nonattainment area New Source Review program within the meaning of Part D of Subchapter I of the Act, 42 U.S.C. §§ 7501-7515, and its regulations, 40 C.F.R. Part 51. 37. “NO x ” means oxides of nitrogen, measured in accordance with the provisions of this Consent Decree. 38. “NO x Allowance” means an authorization to emit a specified amount of NO x that is allocated or issued under an emissions trading or marketable permit program of any kind that has been established under the Clean Air Act or a state implementation plan. 39. “NO x CAIR Allocations” means the number of NO x Allowances allocated to the AEP Eastern System Units pursuant to the Clean Air Interstate Rule, excluding any NO x Allowances awarded by Indiana, Kentucky, Ohio, West Virginia, and Virginia to an AEP Eastern System Unit from the “compliance supplement pool,” as that phrase is defined at 40 C.F.R. § 96.143, in a federally-approved state implementation plan, or federal implementation plan to implement CAIR. 40. “Operating Day” means any day on which a Unit fires Fossil Fuel. 41. “Other NO x Pollution Controls” means the measures identified in the table in Paragraph 69 that will achieve reductions in NO x emissions at the Units specified therein. 42. “Other SO 2 Measures” means the measures identified in Paragraph 90 that will achieve reductions in SO 2 emissions at the Units specified therein.

1543. “Other Unit” means any Unit of the AEP Eastern System that is not an Improved Unit for the pollutant in question. 44. “Operational or Ownership Interest” means part or all of Defendants’ legal or equitable operational or ownership interests in any Unit in the AEP Eastern System. 45. “Parties” means the United States, the States, the Citizen Plaintiffs, and Defendants. “Party” means one of the Parties. 46. “Plaintiffs” means the United States, the States, and the Citizen Plaintiffs. 47. “Plant-Wide Annual Rolling Tonnage Limitation for SO 2 at Clinch River” means the sum of the tons of SO 2 emitted during all periods of operation from the Clinch River plant, including, without limitation, all SO 2 emitted during periods of startup, shutdown, and Malfunction, in the most recent month and the previous eleven (11) months. A new Annual Rolling Average Tonnage Limitation for years 2010 through 2014, and for 2015 and continuing thereafter, shall be calculated in accordance with Paragraph 88. 48. “Plant-Wide Annual Tonnage Limitation for SO 2 at Kammer” means the sum of the tons of SO 2 emitted during all periods of operation from the Kammer plant, including, without limitation, all SO 2 emitted during periods of startup, shutdown, and Malfunction, during the relevant calendar year ( i.e ., January 1 through December 31). A new Plant-Wide Annual Tonnage Limitation shall be calculated for each new calendar year. 49. “PM” means particulate matter, as measured in accordance with the provisions of this Consent Decree.

1650. “PM CEMS” or “PM Continuous Emission Monitoring System” means the equipment that samples, analyzes, measures, and provides, by readings taken at frequent intervals, an electronic or paper record of PM emissions. 51. “PM Emission Rate” means the number of pounds of PM emitted per million BTU of heat input (lb/mmBTU), as measured in annual stack tests in accordance with EPA Method 5, 5B, or 17, 40 C.F.R. Part 60, including Appendix A. 52. “Project Dollars” means Defendants’ expenditures and payments incurred or made in carrying out the Environmental Mitigation Projects identified in Section VIII (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 VIII (Environmental Mitigation Projects) and Appendix A of this Consent Decree, and (b) constitute Defendants’ direct payments for such projects, or Defendant s’ external costs for contractors, vendors, and equipment. 53. “PSD” means Prevention of Significant Deterioration within the meaning of Part C of Subchapter I of the Clean Air Act, 42 U.S.C. §§ 7470-7492, and its regulations, 40 C.F.R. Part 52. 54. “Re-power” means either (1) the replacement of an existing pulverized coal boiler through the construction of a new circulating fluidized bed (“CFB”) boiler or other technology of equivalent environmental performance that at a minimum achieves and maintains a 30-Day Rolling Average Emission Rate not greater than 0.100 lb/mmBTU or a 30-Day Rolling Average Removal Efficiency of at least ninety-five percent (95%) for SO 2 and a 30-Day Rolling Average Emission Rate not greater than 0.070 lb/mmBTU for NO x ; or (2) the modification of

17such Unit, or removal and replacement of Unit components, such that the modified or replaced Unit generates electricity through the use of new combined cycle combustion turbine technology fueled by natural gas containing no more than 0.5 gr ains of sulfur per 100 standard cubic feet of natural gas, and at a minimum, achieves a 1-hour Average NO x Emission Rate not greater than 2.0 ppm. 55. “Retire” means that Defendants shall: (a) permanently shut down and cease to operate the Unit; and (b) comply with any state and/or federal requirements applicable to that Unit. Defendants shall amend any applicable permits so as to reflect the permanent shutdown status of such Unit. 56. “Retrofit” means that the Unit must install and Continuously Operate both an SCR and an FGD. For the 600 MW listed in the table in Paragraph 68 and 87, “Retrofit” means that the Unit must meet a federally-enforceable 30-Day Rolling Average Emission Rate of 0.100 lb/mmBTU for NO x and a 30-Day Rolling Average Emission Rate of 0.100 lb/mmBTU for SO 2 , measured in accordance with the requi rements of this Consent Decree. 57. “Selective Catalytic Reduction System” or “SCR” means a pollution control device that employs selective catalytic reduction technology for the reduction of NO x emissions. 58. “Selective Non-Catalytic Reduction” means a pollution control device for the reduction of NO x emissions that utilizes ammonia or urea injection into the boiler. 59. “SO 2 ” means sulfur dioxide, as measured in accordance with the provisions of this Consent Decree.

1860. “SO 2 Allowance” means “allowance” as defined at 42 U.S.C. § 7651a(3): “an authorization, allocated to an affected unit by th e Administrator of EPA under Subchapter IV of the Act, to emit, during or after a specified calendar year, one ton of sulfur dioxide.” 61. “SO 2 Allocations” means the number of SO 2 Allowances allocated to the AEP Eastern System Units. 62. “Super-Compliant NO x Allowance” means an allowance attributable to reductions beyond the requirements of this Consent Decree as determined in accordance with Paragraph 80. 63. “Super-Compliant SO 2 Allowance” means an allowance attributable to reductions beyond the requirements of this Consent Decree as determined in accordance with Paragraph 98. 64. “States” means the States of Connecticut, Maryland, New Hampshire, New Jersey, New York, Rhode Island, and Vermont, and the Commonwealth of Massachusetts. 65. “Title V Permit” means the permit required for Defendants’ major sources under Subchapter V of the Act, 42 U.S.C. §§ 7661-7661e. 66. “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, the equipment necessary to operate the generator, steam turbine, and boiler, and all ancillary equipment, including pollution control equipment. An electric steam generating station may comprise one or more Units. IV. NO x EMISSION REDUCTIONS AND CONTROLS A. Eastern System-Wide Annual Tonnage Limitations for NO x . 67. Notwithstanding any other provisions of th is Consent Decree, except Section XIV (Force Majeure), during each calendar year specified in the table below, all Units in the AEP
19Eastern System, collectively, shall not emit NO x in excess of the following Eastern System-Wide Annual Tonnage Limitations:

Calendar Year Eastern System-Wide Annual Tonnage Limitations for NO x 2009 96,000 tons 2010 92,500 tons 2011 92,500 tons 2012 85,000 tons 2013 85,000 tons 2014 85,000 tons 2015 75,000 tons 2016, and each year thereafter 72,000 tons

B. NO x Emission Limitations and Control Requirements. 68. No later than the dates set forth in the table below, Defendants shall install and Continuously Operate SCR on each Unit identified therein, or, if indicated in the table, Retire, Retrofit, or Re-power such Unit:

Unit NO x Pollution Control Date Amos Unit 1 SCR January 1, 2008 Amos Unit 2 SCR January 1, 2009 Amos Unit 3 SCR January 1, 2008 Big Sandy Unit 2 SCR January 1, 2009 Cardinal Unit 1 SCR January 1, 2009 Cardinal Unit 2 SCR January 1, 2009 20Unit NO x Pollution Control Date Cardinal Unit 3 SCR January 1, 2009 Conesville Unit 1 Retire, Retrofit, or Re-power Date of Entry of this Consent Decree Conesville Unit 2 Retire, Retrofit, or Re-power Date of Entry of this Consent Decree Conesville Unit 3 Retire, Retrofit, or Re-power December 31, 2012 Conesville Unit 4 SCR December 31, 2010 Gavin Unit 1 SCR January 1, 2009 Gavin Unit 2 SCR January 1, 2009 Mitchell Unit 1 SCR January 1, 2009 Mitchell Unit 2 SCR January 1, 2009 Mountaineer Unit 1 SCR January 1, 2008 Muskingum River Units 1-4 Retire, Retrofit, or Re-power December 31, 2015 Muskingum River Unit 5 SCR January 1, 2008 Rockport Unit 1 SCR December 31, 2017 Rockport Unit 2 SCR December 31, 2019 Sporn Unit 5 Retire, Retrofit, or Re-power December 31, 2013 A total of at least 600 MW from the following list of Units: Sporn Units 1-4, Clinch River Units 1-3, Tanners Creek Units 1-3, and/or Kammer Units 1-3 Retire, Retrofit, or Re-power December 31, 2018

2169. Other NO x Pollution Controls. No later than the dates set forth in the table below, Defendants shall Continuously Operate the Other NO x Pollution Controls on the Units identified therein:

Unit Other NO x Pollution Controls Date Big Sandy Unit 1 Low NO x Burners Date of Entry Glen Lyn Units 5 and 6 Low NO x Burners Date of Entry

Clinch River Units 1, 2, and 3 Low NO x Burners, and Selective Non-catalytic Reduction For Low NO x Burners, Date of Entry, and, for Selective Non-Catalytic Reduction, December 31, 2009 Conesville Units 5 and 6 Low NO x Burners Date of Entry Kammer Units 1, 2, and 3 Overfire Air Date of Entry Kanawha River Units 1 and 2 Low NO x Burners Date of Entry Picway Unit 9 Low NO x Burners Date of Entry Tanners Creek Units 1, 2, and 3 Low NO x Burners Date of Entry Tanners Creek Unit 4 Overfire Air Date of Entry
C. General Provisions for Use and Surrender of NO x Allowances. 70. Except as may be necessary to comply with this Section and Section XIII (Stipulated Penalties), Defendants may not use NO x Allowances to comply with any requirement of this Consent Decree, including by claiming compliance with any emission limitation or Eastern System-Wide Annual Tonnage Limitation required by this Decree, by using, tendering,

22or otherwise applying NO x Allowances to achieve compliance or offset any emissions above the limits specified in this Consent Decree. 71. As required by this Section IV of this Consent Decree, Defendants shall surrender NO x Allowances that would otherwise be available for sale, trade, or transfer as a result of actions taken by Defendants to comply with the requirements of this Consent Decree. 72. NO x Allowances allocated to the AEP Eastern System may be used by Defendants to meet their own federal and/or st ate Clean Air Act regulatory requirements for the Units included in the AEP Eastern System. Subject to Paragraph 70, nothing in this Consent Decree shall prevent Defendants from purchasing or otherwise obtaining NO x Allowances from another source for purposes of complying with their own federal and/or state Clean Air Act requirements to the extent otherwise allowed by law. 73. The requirements in this Consent Decree pertaining to Defendants’ use and surrender of NO x Allowances are permanent injunctions not subject to any termination provision of this Consent Decree. These provisions shall survive any termination of this Consent Decree. D. Use of Excess NO x Allowances. 74. Calculation of Unrestricted and Restricted NO x Allowances. On an annual basis, beginning in 2009, Defendants shall calculate the difference between the NO x CAIR Allocations for the Units in the AEP Eastern System for that year and the annual Eastern System-Wide Tonnage Limitations for NO x for that calendar year. This difference represents the total Excess NO x Allowances for that calendar year. For purposes of this Consent Decree, for each year commencing in 2009 and ending in 2015, forty-two percent (42%) of the Excess NO x Allowances shall be Unrestricted Excess NO x Allowances and fifty-eight percent (58%) shall be

23Restricted Excess NO x Allowances. Commencing in 2016, and continuing thereafter, all Excess NO x Allowances shall be Restricted Excess NO x Allowances. 75. Use and Surrender of Unrestricted Excess NO x Allowances. For each calendar year commencing in 2009 and ending in 2015, Defendants may use Unrestricted Excess NO x Allowances in any manner authorized by law. No later than March 1, 2016, Defendants must surrender, or transfer to a non-profit third party selected by Defendants for surrender, all unused Unrestricted Excess NO x Allowances subject to surrender accumulated during the period from 2009 through 2015. 76. Use and Surrender of Restricted Excess NO x Allowances. Beginning in calendar year 2009, and for each calendar year thereafter, Defendants shall calculate the difference between the number of any Restricted Excess NO x Allowances and the number of NO x Allowances that is equal to the amount of actual NO x emissions from: (a) any New and Newly Permitted Unit as defined in this Consent Decree, and (b) the following five natural-gas plants but only up to a cumulative total of 1200 tons of NO x in any single year: Ceredo Generating Station located near Ceredo, West Virginia, with a nominal generating capacity of 505 megawatts; Waterford Energy Center located in southeastern Ohio, with a nominal generating capacity of 821 megawatts; Darby Electric Generating Station located near Columbus, Ohio, with a nominal generating capacity of 480 megawatts; Lawrenceburg Generating Station located in Lawrenceburg, Indiana, with a generating capacity of 1,096 megawatts; and a natural gas-fired power plant under construction near Dresden, Ohio, with a nominal generating capacity of 580 megawatts. This difference shall be the amount of Restricted Excess NO x Allowances

24potentially subject to surrender in 2016. During calendar years 2009 through 2015, Defendants may accumulate Restricted Excess NO x Allowances potentially subject to surrender in 2016. 77. NO x Allowances from Renewable Energy. Beginning in calendar year 2009, and for each calendar year thereafter, Defendants may subtract from the number of Restricted Excess NO x Allowances potentially subject to surrender, a number of allowances calculated in accordance with this Paragraph. To calculate such number, Defendants shall use the following method: multiply 0.0002 by the sum of (a) the actual annual generation in MWH/year generated from solar or wind power projects first owned or operated by Defendants after the Date of Lodging of this Consent Decree, and (b) the actual annual generation in MWH/year purchased by Defendants from solar or wind power projects in any year after the Date of Lodging of this Consent Decree. Such figure so calculated shall be subtracted from the number of Restricted Excess NO x Allowances potentially subject to surrender each year. The remainder shall be the Restricted Excess NO x Allowances subject to surrender. 78. Defendants may, solely at their discretion, use Restricted Excess NO x Allowances at a New and Newly Permitted Unit for which Defendants have received a final NSR Permit from the permitting agency even if the NSR Permit has been appealed but not stayed during the permit appeal process. If Defendants use Restricted Excess NO x Allowances at such New and Newly Permitted Unit, and the emissions from such New and Newly Permitted Unit are greater than what such Unit is permitted to emit after final adjudication of the appeal process, Defendants shall, within thirty (30) days of such final adjudication, retire an amount of NO x Allowances equal to the number of tons of NO x actually emitted that exceeded the finally adjudicated permit limit.

2579. No later than March 1, 2016, the total number of Restricted Excess NO x Allowances subject to surrender accumulated during 2009 through 2015 as calculated in accordance with Paragraphs 74, 76, and 77, shall be surrendered or transferred to a non-profit third party selected by Defendants for surrender, pursuant to Subsection F, below. Beginning in calendar year 2016, and for each calendar year thereafter, the total number of Restricted Excess NO x Allowances subject to surrender for that year calculated in accordance with Paragraph 74, 76 and 77, shall be surrendered, or transferred to a non-profit third party selected by Defendants for surrender, by March 1 of the following calendar year. E. Super-Compliant NO x Allowances. 80. In each calendar year beginning in 2009, and continuing thereafter, Defendants may use in any manner authorized by law any NO x Allowances made available in that year as a result of maintaining actual NO x emissions from the AEP Eastern System below the Eastern System-Wide Annual Tonnage Limitations for NO x under this Consent Decree for each calendar year. Defendants shall timely report the generation of such Super-Compliant NO x Allowances in accordance with Section XI (Periodic Reporting) and Appendix B of this Consent Decree. F. Method for Surrender of Excess NO x Allowances. 81. For purposes of this Consent Decree, the “surrender” of Excess Restricted or Unrestricted Excess NO x Allowances subject to surrender means permanently surrendering to EPA NO x Allowances from the accounts administered by EPA so that such NO x Allowances can never be used thereafter to meet any compliance requirement under the Clean Air Act, a state implementation plan, or this Consent Decree.

2682. For all Restricted or Unrestricted Excess NO x Allowances subject to surrender required to be surrendered to EPA in Paragraphs 79 and 75, above, Defendants or the third party recipient(s) (as the case may be) shall first submit a NO x Allowance transfer request form to EPA’s Office of Air and Radiation’s Clean Air Ma rkets Division directing the transfer of such NO x 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, Defendants or the third party recipient(s) shall irrevocably authorize the transfer of these NO x Allowances and identify – by name of account and any applicable serial or other identification numbers or station names – the source and location of the NO x Allowances being surrendered. 83. If any NO x Allowances required to be surrendered under this Consent Decree are transferred directly to a non-profit third party, Defendants shall include a description of such transfer in the next report submitted to EPA as required by Section XI (Periodic Reporting) of this Consent Decree. Such report shall: (a) iden tify the non-profit third party recipient(s) of the NO x Allowances and list the serial numbers of the transferred NO x Allowances; and (b) include a certification by the third party recipient(s) stating that the recipient(s) will not sell, trade, or otherwise exchange any of the NO x Allowances and will not use any of the NO x Allowances to meet any obligation imposed by any environmental law. No later than the second periodic report due after the transfer of any NO x Allowances, Defendants shall include a statement that the third party recipient(s) surrendered the NO x Allowances for permanent surrender to EPA in accordance with the provisions of Paragraph 82 within one (1) year after Defendants transferred the NO x Allowances to them. Defendants shall not have complied with the NO x Allowance

27surrender requirements of this Paragraph until all third party recipient(s) have actually surrendered the transferred NO x Allowances to EPA. G. Reporting Requirements for NO x Allowances. 84. Defendants shall comply with the reporting requirements for NO x Allowances as described in Section XI (Periodic Reporting) and Appendix B. H. General NO x Provisions. 85. To the extent a NO x Emission Rate is required under this Consent Decree, Defendants shall use CEMS in accordance with the reference methods specified in 40 C.F.R. Part 75 to determine such Emission Rate. V. SO 2 EMISSION REDUCTIONS AND CONTROLS A. Eastern System-Wide Annual Tonnage Limitations for SO 2 . 86. Notwithstanding any other provisions of this Consent Decree, except Section XIV (Force Majeure), during each calendar year specified in the table below, all Units in the AEP Eastern System, collectively, shall not emit SO 2 in excess of the following Eastern System-Wide Annual Tonnage Limitations:

Calendar Year Eastern System-Wide Annual Tonnage Limitations for SO 2 2010 450,000 tons 2011 450,000 tons 2012 420,000 tons 2013 350,000 tons 2014 340,000 tons

28Calendar Year Eastern System-Wide Annual Tonnage Limitations for SO 2 2015 275,000 tons 2016 260,000 tons 2017 235,000 tons 2018 184,000 tons 2019, and each year thereafter 174,000 tons

B. SO 2 Emission Limitations and Control Requirements

. 87. No later than the dates set forth in the table below, Defendants shall install and Continuously Operate an FGD on each Unit identified therein, or, if indicated in the table, Retire, Retrofit, or Re-power such Unit:

Unit SO 2 Pollution Control Date Amos Units 1 and 3 FGD December 31, 2009 Amos Unit 2 FGD December 31, 2010 Big Sandy Unit 2 FGD December 31, 2015 Cardinal Units 1 and 2 FGD December 31, 2008 Cardinal Unit 3 FGD December 31, 2012 Conesville Units 1 and 2 Retire, Retrofit, or Re-power Date of Entry Conesville Unit 3 Retire, Retrofit, or Re-power December 31, 2012 Conesville Unit 4 FGD December 31, 2010 Conesville Unit 5 Upgrade existing FGD and meet a 95% 30-day Rolling Average Removal Efficiency December 31, 2009

29Unit SO 2 Pollution Control Date Conesville Unit 6 Upgrade existing FGD and meet a 95% 30-day Rolling Average Removal Efficiency December 31, 2009

Gavin Units 1 and 2 FGD Date of Entry Mitchell Units 1 and 2 FGD December 31, 2007 Mountaineer Unit 1 FGD December 31, 2007 Muskingum River Units 1-4 Retire, Retrofit, or Re-power December 31, 2015 Muskingum River Unit 5 FGD December 31, 2015 Rockport Unit 1 FGD December 31, 2017 Rockport Unit 2 FGD December 31, 2019 Sporn Unit 5 Retire, Retrofit, or Re-power December 31, 2013 A total of at least 600 MW from the following list of Units: Sporn Units 1-4, Clinch River Units 1-3, Tanners Creek Units 1-3, and/or Kammer Units 1-3 Retire, Retrofit, or Re-power December 31, 2018

88. Plant-Wide Annual Rolling Average Tonnage Limitation for SO 2 at Clinch River. Beginning on January 1, 2010, and continuing through December 31, 2014, Defendants shall limit their total annual SO 2 emissions at the Clinch River plant to a Plant-Wide Annual Rolling Average Tonnage Limitation of 21,700 tons. Beginning on January 1, 2015, and continuing thereafter, Defendants shall limit their total annual SO 2 emissions at the Clinch River plant to a Plant-Wide Annual Rolling Average Tonnage Limitation of 16,300 tons. For purposes of calculating the Plant-Wide Annual Rolling Average Tonnage Limitation that begins in 2010, Defendants shall use the period beginning January 1, 2010 through December 31, 2010 to 30establish the initial annual period that is subject to the Plant-Wide Annual Rolling Average Tonnage Limitation for 2010 through 2014. Defendants shall then calculate a new Plant-Wide Annual Rolling Average Tonnage Limitation each month thereafter through December 31, 2014, by averaging the most recent month with the previous eleven (11) months. For purposes of calculating the Plant-Wide Annual Rolling Average Tonnage Limitation that begins in 2015, Defendants shall use the period beginning January 1, 2015 through December 31, 2015 to establish the initial annual period that is subject to the Plant-Wide Annual Average Rolling Tonnage Limitation for 2015. Defendants shall then calculate a new Plant-Wide Annual Rolling Average Tonnage Limitation each month thereafter by averaging the most recent month with the previous eleven (11) months. 89. Plant-Wide Annual Tonnage Limitation for SO 2 at Kammer . Beginning on January 1, 2010, and continuing annually thereafter, Defendants shall limit their total annual SO 2 emissions at the Kammer plant to a Plant-Wide Annual Tonnage Limitation of 35,000 tons. 90. Other SO 2 Measures. No later than the dates set forth in the table below, Defendants shall comply with the limit on coal sulfur content for such Units, at all times that the Units are in operation:

Unit Other SO 2 Measures Date Big Sandy Unit 1 Units can only burn coal with a sulfur content no greater than 1.75 lb/mmBTU on an annual average basis Date of Entry

Glen Lyn Units 5 and 6 Units can only burn coal with a sulfur content no greater than 1.75 lb/mmBTU on an annual average basis. Date of Entry

31Unit Other SO 2 Measures Date Kanawha River Units 1 and 2 Units can only burn coal with a sulfur content no greater than 1.75 lb/mmBTU on an annual average basis Date of Entry

Tanners Creek Units 1, 2, and 3 Units can only burn coal with a sulfur content no greater than 1.2 lb/mmBTU on an annual average basis Date of Entry

Tanners Creek Unit 4 Unit can only burn coal with a sulfur content no greater than 1.2 % on an annual average basis Date of Entry

C. Use and Surrender of SO 2 Allowances. 91. Defendants may use SO 2 Allowances allocated to the AEP Eastern System by the Administrator of EPA under the Act, or by any state under its state implementation plan, to meet their own federal and/or state regulatory require ments for the Units included in the AEP Eastern System. Subject to Paragraph 92, nothing in this Consent Decree shall prevent Defendants from purchasing or otherwise obtaining SO 2 Allowances from another source for purposes of complying with their own federal and/or state Clean Air Act requirements to the extent otherwise allowed by law. 92. Except as may be necessary to comply with this Section and Section XIII (Stipulated Penalties), Defendants may not use any SO 2 Allowances to comply with any requirement of this Consent Decree, including by claiming compliance with any emission limitation, Eastern System-Wide Annual Tonnage Limitations, Plant-Wide Annual Rolling Average Tonnage Limitation for SO 2 at Clinch River, or Plant-Wide Annual Tonnage Limitation 32for SO 2 at Kammer required by this Consent Decree by using, tendering, or otherwise applying SO 2 Allowances to achieve compliance or offset any emissions above the limits specified in this Consent Decree. 93. On an annual basis beginning in 2010, and continuing thereafter, Defendants shall calculate the number of Excess SO 2 Allowances by subtracting the number of SO 2 Allowances equal to the annual Eastern System-Wide Tonnage Limitations for SO 2 for each calendar year times the applicable allowance surrender ratio from the annual SO 2 Allocations for all Units within the AEP Eastern System for the same calendar year. Defendants shall surrender, or transfer to a non-profit third party selected by Defendants for surrender, all Excess SO 2 Allowances that have been allocated to the AEP Eastern System for the specified calendar year by the Administrator of EPA under the Act or by any state under its state implementation plan. Defendants shall make the surrender of SO 2 Allowances required by this Paragraph to EPA by March 1 of the immediately following calendar year. D. Method for Surrender of Excess SO 2 Allowances. 94. For purposes of this Subsection, the “surrender” of Excess SO 2 Allowances means permanently surrendering allowances from the accounts administered by EPA so that such allowances can never be used thereafter to meet any compliance requirement under the Clean Air Act, a state implementation plan, or this Consent Decree. 95. If any SO 2 Allowances required to be surrendered under this Consent Decree are transferred directly to a non-profit third party, Defendants shall include a description of such transfer in the next report submitted to EPA pursuant to Section XI (Periodic Reporting) of this Consent Decree. Such report shall: (i) identify the non-profit third party recipient(s) of the SO 2 33Allowances and list the serial numbers of the transferred SO 2 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 SO 2 Allowances to meet any obligation imposed by any environmental law. No later than the second periodic report due after the transfer of any SO 2 Allowances, Defendants shall include a statement that the third party recipient(s) surrendered the SO 2 Allowances for permanent surrender to EPA in accordance with the provisions of Paragraph 96 within one (1) year after Defendants transferred the SO 2 Allowances to them. Defendants shall not have complied with the SO 2 Allowance surrender requirements of this Paragraph until all third party recipient(s) have actually surrendered the transferred SO 2 Allowances to EPA. 96. For all SO 2 Allowances surrendered to EPA, Defendants or the third party recipient(s) (as the case may be) shall first submit an SO 2 Allowance transfer request form to EPA’s Office of Air and Radiation’s Clean Air Ma rkets Division directing the transfer of such SO 2 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, Defendants or the third party recipient(s) shall irrevocably authorize the transfer of these SO 2 Allowances and identify – by name of account and any applicable serial or other identification numbers or station names – the source and location of the SO 2 Allowances being surrendered. 97. The requirements in this Consent Decree pertaining to Defendants’ surrender of SO 2 Allowances are permanent injunctions not subject to any termination provision of this Decree. These provisions shall survive any termin ation of this Consent Decree in whole or in part.
34E. Super-Compliant SO 2 Allowances. 98. In each calendar year beginning in 2010, and continuing thereafter, Defendants may use in any manner authorized by law any SO 2 Allowances made available in that year as a result of maintaining actual SO 2 emissions from the AEP Eastern System below the Eastern System-Wide Annual Tonnage Limitations for SO 2 under this Consent Decree for each calendar year. Defendants shall timely report the generation of such Super-Compliant SO 2 Allowances in accordance with Section XI (Periodic Reporting) and Appendix B of this Consent Decree. F. Reporting Requirements for SO 2 Allowances

. 99. Defendants shall comply with the reporting requirements for SO 2 Allowances as described in Section XI (Periodic Reporting) and Appendix B. G. General SO 2 Provisions. 100. To the extent an Emission Rate or 30-Day Rolling Average Removal Efficiency for SO 2 is required under this Consent Decree, Defendants shall use CEMS in accordance with the reference methods specified in 40 C.F.R. Part 75 to determine such Emission Rate. 101. Notwithstanding Paragraphs 6 and 100, the 30-Day Rolling Average Removal Efficiency for SO 2 at Conesville Unit 5 and Conesville Unit 6 shall be determined in accordance with Appendix C. VI. PM EMISSION REDUCTIONS AND CONTROLS A. Optimization of Existing ESPs. 102. Beginning thirty (30) days after the Date of Entry, and continuing thereafter, Defendants shall Continuously Operate each ESP on Cardinal Unit 1, Cardinal Unit 2, and Muskingum River Unit 5 to maximize PM emission reductions at all times when the Unit is in

35operation, provided that such operation of the ESP is consistent with the technological limitations, manufacturers’ specifications, and good engineering and maintenance practices for the ESP. Defendants shall, at a minimum, to the extent reasonably practicable: (a) fully energize each section of the ESP for each unit, and repair any failed ESP section at the next planned Unit outage (or unplanned outage of sufficient length); (b) operate automatic control systems on each ESP to maximize PM collection efficiency; (c) maintain power levels delivered to the ESPs, consistent with manufacturers’ specifications, the operational design of the Unit, and good engineering practices; and (d) inspect for and repair during the next planned Unit outage (or unplanned outage of sufficient length) any openi ngs in ESP casings, ductwork, and expansion joints to minimize air leakage. B. PM Emission Rate and Testing. 103. No later than the dates specified in the table below, Defendants shall Continuously Operate each Unit specified therein to achieve and maintain a PM Emission Rate no greater than 0.030 lb/mmBTU:

Unit Date to Achieve and Maintain PM Emission Rate Cardinal Unit 1 December 31, 2009 Cardinal Unit 2 December 31, 2009 Muskingum River Unit 5 December 31, 2012

36104. On or before the date established by this Consent Decree for Defendants to achieve and maintain 0.030 lb/mmBTU at Cardinal Unit 1, Cardinal Unit 2, and Muskingum River Unit 5, Defendants shall conduct a performance test for PM that demonstrates compliance with the PM Emission Rate required by this Consent Decree. Within forty-five (45) days of each such performance test, Defendants shall submit the results of the performance test to Plaintiffs pursuant to Section XVIII (Noti ces) of this Consent Decree. C. PM Emissions Monitoring. 105. Beginning in calendar year 2010 for Cardinal Unit 1 and Cardinal Unit 2, and calendar year 2013 for Muskingum River Unit 5, and continuing in each calendar year thereafter, Defendants shall conduct a stack test for PM on each stack servicing Cardinal Unit 1, Cardinal Unit 2, and Muskingum River Unit 5. The annual stack test requirement imposed by this Paragraph may be satisfied by stack tests conducted by Defendants as required by their permits from the State of Ohio for any year that such stack tests are required under the permits. 106. 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, 5B, or 17, or an alternative method that is promulgated by EPA, requested for use herein by Defendants, and approved for use herein by EPA. Use of any particular method shall conform to the EPA requirements specified in 40 C.F.R. Part 60, A ppendix A and 40 C.F.R. § 60.48Da(b) and (e), or any federally-approved method contained in the Ohio State Implementation Plan. Defendants 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 within forty-five (45) days of completion of each test. 37D. Installation and Operation of PM CEMS. 107. Defendants shall install, calibrate, operate, and maintain PM CEMS, as specified below. Each PM CEMS shall comprise a continuous particle mass monitor measuring particulate matter concentration, directly or indirectly, on an hourly average basis and a diluent monitor used to convert the concentration to units of lb/mmBTU. Defendants shall maintain, in an electronic database, the hourly average emission values produced by all PM CEMS in lb/mmBTU. Defendants shall use reasonable efforts to keep each PM CEMS running and producing data whenever any Unit served by the PM CEMS is operating. 108. No later than December 31, 2011, Defendants shall submit to EPA pursuant to Section XII (Review and Approval of Submittals) of this Consent Decree: (a) a plan for the installation and certification of each PM CEMS, and (b) a proposed Quality Assurance/Quality Control (“QA/QC”) protocol that shall be followed in calibrating such PM CEMS. In developing both the plan for installation and certification of the PM CEMS and the QA/QC protocol, Defendants shall use the criteria set forth in 40 C.F.R. Part 60, Appendix B, Performance Specification 11, and Appendix F, Procedure 3. Following approval by EPA of the protocol, Defendants shall thereafter operate each PM CEMS in accordance with the approved protocol. 109. No later than the dates specified below, Defendants shall install, certify, and operate PM CEMS on the stacks or common stacks for Cardinal Unit 1, Cardinal Unit 2, and a third Unit, as further described in Paragraph 110:

38Stack Date to Commence Operation of PM CEMS Cardinal Unit 1 December 31, 2012 Cardinal Unit 2 December 31, 2012 Unit to be identified pursuant to Paragraph 110 December 31, 2012

110. No later than December 31, 2011, Defendants shall identify, subject to Plaintiffs’ approval, the third Unit required by Paragraph 109. 111. No later than ninety (90) days after Defendants begin operation of the PM CEMS, Defendants shall conduct tests of each PM CEMS to demonstrate compliance with the PM CEMS installation and certification plan submitted to and approved by EPA. 112. Demonstration that PM CEMS are Infeasible. Defendants shall operate the PM CEMS for at least two (2) years on each of the Units specified in Paragraphs 109 and 110. After two (2) years of operation, Defendants may attempt to demonstrate that it is infeasible to continue operating PM CEMS. As part of such demonstration, Defendants shall submit an alternative PM monitoring plan for review and approval by EPA. The plan shall explain the basis for stopping operation of the PM CEMS and propose an alternative PM monitoring plan. If the United States disapproves the alternative PM monitoring plan, or if the United States rejects Defendants’ claim that it is infeasible to continue operating PM CEMS, such disagreement is subject to Section XV (Dispute Resolution). 113. “Infeasible to Continue Operating PM CEMS” Standard. Operation of a PM CEMS shall be considered no longer feasible if: (a) the PM CEMS cannot be kept in proper 39condition for sufficient periods of time to produce reliable, adequate, or useful data consistent with the QA/QC protocol, or (b) Defendants de monstrate that recurring, chronic, or unusual equipment adjustment or servicing needs in relation to other types of continuous emission monitors cannot be resolved through reasonable expenditures of resources. If EPA determines that Defendants have demonstrated pursuant to this Paragraph that operation is no longer feasible, Defendants shall be entitled to discontinue operation of and remove the PM CEMS. 114. PM CEMS Operations Will Continue During Dispute Resolution or Proposals for Alternative Monitoring. Until EPA approves an alternative monitoring plan, or until the conclusion of any proceeding under Section XV (D ispute Resolution), Defendants shall continue to operate the PM CEMS. If EPA has not issued a decision regarding an alternative monitoring plan within 120 days, Defendants may initiate action under Section XV (Dispute Resolution). E. PM Reporting. 115. Defendants shall comply with the reporting requirements for PM as described in Section XI (Periodic Reporting) and Appendix B. F. General PM Provisions. 116. Although stack testing shall be used to determine compliance with the PM Emission Rate established by this Consent Decree, data from the PM CEMS shall be used, at a minimum, to monitor progress in reducing PM emissions.

40VII. PROHIBITION ON NETTING CREDITS OR OFFSETS FROM REQUIRED CONTROLS 117. Emission reductions that result from actions required to be taken by Defendants 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 credit or offset unde r the Clean Air Act’s Nonattainment NSR and PSD programs. 118. Nothing in this Consent Decree is intended to preclude the emission reductions generated under this Consent Decree from being considered by a State 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, PSD increment, or air quality related values, including visibility, in a Class I area. VIII. ENVIRONMENTAL MITIGATION PROJECTS 119. Defendants shall implement the Environmental Mitigation Projects (“Projects”) described in Appendix A to this Consent Decree and fund the categories of Projects described in Subsection B, below, in compliance with the approved plans and schedules for such Projects and other terms of this Consent Decree. In funding and/or implementing all such Projects in Appendix A and Subsection B, Defendants sha ll expend moneys and/or implement Projects valued at no less than $36 million for the Projects identified in Appendix A and $24 million for the payments to the States to fund Projects within the categories set forth in Subsection B. Defendants shall fund and/or implement such Projects over a period of no later than five (5) years from the Date of Entry. Defendants may propose establishing one or more qualified settlement fund s within the meaning of Treas. Reg. §1.468B-1 in conjunction with one or more 41Mitigation Projects. Any such trust would be established pursuant to a trust agreement in a form to be mutually agreed upon by the affected Parties. Nothing in the foregoing is intended by the United States to be a determination or opinion regarding whether such trust would meet the requirements of Treas. Reg. §1.468B-1 or is otherwise appropriate. A. Requirements for Projects Described in Appendix A ($36 million). 120. Defendants shall maintain, and present to EPA upon request, all documents to substantiate the Project Dollars expended to implement the Projects described in Appendix A, and shall provide these documents to EPA within thirty (30) days of a request for the documents. 121. All plans and reports prepared by Defendants pursuant to the requirements of this Section of the Consent Decree and required to be submitted to EPA shall be publicly available from Defendants without charge. 122. Defendants shall certify, as part of each plan submitted to EPA for any Project, that Defendants are not otherwise required by law to perform the Project described in the plan, that Defendants are unaware of any other person who is required by law to perform the Project, and that Defendants 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. 123. Defendants 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. 124. If Defendants elect (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 Defendants, but not including Defendants’ agents or contractors, that person or instrumentality 42must, in writing: (a) identify its legal authority for accepting such funding; and (b) identify its legal authority to conduct the Project for which Defendants contribute the funds. Regardless of whether Defendants elect (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, Defendants acknowledge that they will receive credit for the expenditure of such funds as Project Dollars only if Defendants demonstrate that the funds have been actually spent by either Defendants or by the person or instrumentality receiving them, and that such expenditures met all requirements of this Consent Decree. 125. Defendants shall comply with the reporting requirements for Appendix A Projects as described in Section XI (Periodic Reporting) and Appendix B. 126. Within sixty (60) days following the completion of each Project required under this Consent Decree (including any applicable pe riods of demonstration or testing), Defendants shall submit to the United States a report that documents the date that the Project was completed, Defendants’ results of implementing the Proj ect, including the emission reductions or other environmental benefits achieved, and the Project Dollars expended by Defendants in implementing the Project. B. Mitigation Projects to be Conducted by the States ($24 million). 127. The States, by and through their respective Attorneys General, shall jointly submit to Defendants Projects within the categories identified in this Subsection B for funding in amounts not to exceed $4.8 million per calendar year for no less than five (5) years following the Date of Entry of this Consent Decree beginning as early as calendar year 2008. The funds for these Projects will be apportioned by and among the States, and Defendants shall not have approval rights for the Projects or the apportionment. Defendants shall pay proceeds as 43designated by the States in accordance with the Projects submitted for funding each year within seventy-five (75) days after being notified in writing by the States. Notwithstanding the $4.8 million and 5-year limitation above, if the total costs of the projects submitted in any one or more years are less than $4.8 million, the difference between that amount and $4.8 million will be available for funding by Defendants of new or previously submitted projects in the following years, except that all amounts not designated by the States within ten (10) years after the Date of Entry of this Consent Decree shall expire. 128. Categories of Projects. The States agree to use money funded by Defendants to implement Projects that pertain to energy effici ency and/or pollution reduction. Such projects may include, but are not limited by, the following:

a. Retrofitting land and marine vehicles (e.g. , automobiles, off-road and onroad construction and other vehicles, trains, ferries) and transportation terminals and ports, with pollution control devices, such as particulate matter traps, computer chip reflashing, and battery hybrid technology; b. Truck-stop and marine port electrification;

c. Purchase and installation of photo-voltaic cells on buildings; d. Projects to conserve energy use in new and existing buildings, including appliance efficiency improvement pr ojects, weatherization projects, and projects intended to meet EPA’s Green Building guidelines (see http://www.epa.gov/greenbuilding/pubs/enviro-issues.htm) and/or the Leadership in Energy and Environmental Design (LEED) Green Building Rating System (see http://www.usgbc.org/DisplayPage.aspx?CategoryID=19), and projects to 44collect information in rental markets to assist in design of efficiency and conservation programs;

e. Construction associated with the production of energy from wind, solar, and biomass; f. “Buy back” programs for dirty old motors ( e.g. , automobile, lawnmowers, landscape equipment); g. Programs to remove and/or replace oil-fired home heating equipment to allow use of ultra-low sulfur oil, and outdoor wood-fired boilers; h. Purchase and retirement of SO 2 and NO x allowances; and i. Funding program to improve modeling of mobile source sector. IX. CIVIL PENALTY 129. Within thirty (30) days after the Date of Entry, Defendants shall pay to the United States a civil penalty in the amount of $15,000,000. The civil penalty shall be paid by Electronic Funds Transfer (“EFT”) to the United States Depa rtment of Justice, in accordance with current EFT procedures, referencing USAO File Nu mber 1999v01542 and DOJ Case Number 90-5-2-1

- 06893 and the civil action case name and consolidated case numbers of this action. The costs of such EFT shall be Defendants’ responsibility. Payment shall be made in accordance with instructions provided to Defendants by the Financial Litigation Unit of the U.S. Attorney’s Office for the Southern District of Ohio. Any funds received after 2:00 p.m. EDT shall be credited on the next business day. At the time of payment, Defendants shall provide notice of payment, referencing the USAO File Number, the DOJ Case Number, and the civil action case name and consolidated case numbers, to the Department of Justice and to EPA in accordance with Section XVIII (Notices) of this Consent Decree. 45130. Failure to timely pay the civil penalty shall subject Defendants 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 Defendants 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. 131. Payment made pursuant to this Section is a penalty within the meaning of Section 162(f) of the Internal Revenue Code, 26 U.S.C. § 162(f), and is not a tax-deductible expenditure for purposes of federal law. X. RESOLUTION OF CIVIL CLAIMS AGAINST DEFENDANTS A. Resolution of the United States’ Civil Claims. 132. Claims Based on Modifications Occurring Before the Date of Lodging of this Consent Decree. Entry of this Decree shall resolve all civil claims of the United States against Defendants that arose from any modifications commenced at any AEP Eastern System Unit prior to the Date of Lodging of this Consent Decree, including but not limited to, those modifications alleged in the Notices of Violation and complaints filed in AEP I and AEP II , under any or all of: (a) Parts C or D of Subchapter I of the Clean Air Act, 42 U.S.C. §§ 7470-7492, 7501-7515; (b)Section 111 of the Clean Air Act, 42 U.S.C. § 7411, and 40 C.F.R. § 60.14; (c) the federallyapproved and enforceable Indiana State Implementation Plan, Kentucky State Implementation Plan, Ohio State Implementation Plan, Virginia State Implementation Plan, and West Virginia State Implementation Plan; or (d) Sections 502(a) and 504(a) of Title V of the Clean Air Act, 42 U.S.C §§ 7611(a) and 7611(c), but only to the extent that such claims are based on Defendants’ failure to obtain an operating permit that reflects applicable requirements imposed under Parts C or D of Subchapter I, or Section 111 of the Clean Air Act.

46133. Claims Based on Modifications after the Date of Lodging of This Consent Decree . Entry of this Consent Decree also shall re solve all civil claims of the United States against Defendants that arise based on a modification commenced before December 31, 2018, or solely for Rockport Unit 2, before December 31, 2019, for all pollutants, except Particulate Matter, regulated under Parts C or D of Subchapter I of the Clean Air Act, and under regulations promulgated thereunder, as of the Date of Lodging of this Consent Decree, and:

a. where such modification is commenced at any AEP Eastern System Unit after the Date of Lodging of this Consent Decree; or b. where such modification is one this Consent Decree expressly directs Defendants to undertake. The term “modification” as used in this Paragraph shall have the meaning that term is given under the Clean Air Act and under the regulations in effect as of the Date of Lodging of this Consent Decree, as alleged in the complaints in AEP I and AEP II

. 134. Reopener. The resolution of the United States’ civil claims against Defendants, as provided by this Subsection A, is subject to the provisions of Subsection B of this Section.

47B. Pursuit by the United States of Civil Claims Otherwise Resolved by Subsection A. 135. Bases for Pursuing Resolved Claims for the AEP Eastern System . If Defendants violate: (a) the Eastern System-Wide Annual Tonnage Limitations for NO x required pursuant to Paragraph 67; (b) the Eastern System-Wide Annual Tonnage Limitations for SO 2 required pursuant to Paragraph 86; or (c) operate a Unit more than ninety (90) days past a date established in this Consent Decree without completing the required installation, upgrade, or commencing Continuous Operation of any emission control device required pursuant to Paragraphs 68, 69, 87, 102, and 103 then the United States may pursue any claim at any AEP Eastern System Unit that is otherwise resolved under Subsection A (Resolution of United States’ Civil Claims), subject to (a) and (b) below.

a. For any claims based on modifications undertaken at any Unit in the AEP Eastern 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 (5) 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: (1) after the Date of Lodging of this Consent Decree and (2) within the five (5) years preceding the violation or failure specified in this Paragraph. 136. Additional Bases for Pursuing Resolved Claims for Modifications at an Improved Unit. Solely with respect to an Improved Unit, the United States may also pursue claims arising 48from a modification (or collection of modifications ) at an Improved Unit that has otherwise been resolved under Subsection A (Resolution of the United States’ Civil Claims) if the modification (or collection of modifications) at the Improved Unit on which such claim is based (a) was commenced after the Date of Lodging of th is Consent Decree and (b) individually (or collectively) increased the maximum hourly emission rate of that Unit for NO x or SO 2 (as measured by 40 C.F.R. § 60.14 (b) and (h)) by more than ten percent (10%). 137. Any Other Unit can become an Improved Unit for NO x if (a) it is equipped with an SCR, and (b) the operation of such SCR is incorporated into a federally-enforceable non-Title V permit or site-specific amendment to the state implementation plan and incorporated into a Title V permit applicable to that Unit. Any Other Unit can become an Improved Unit for SO 2 if (a) it is equipped with an FGD, and (b) the operation of such FGD is incorporated into a federally-enforceable non-Title V permit or site-specific amendment to the state implementation plan and incorporated into a Title V permit applicable to that Unit. 138. Additional Bases for Pursuing Resolved Claims for Modifications at Other Units.

a. Solely with respect to Other Units, i.e. , a Unit that is not an Improved Unit under the terms of this Consent Decree, the United States may also pursue claims arising from a modification (or collection of modifications) at an Other Unit that has otherwise been resolved under Subsection A (Resolution of the United States’ Civil Claims), if the modification (or collection of modifications) at the Other Unit on which the claim is based was commenced within the five (5) years preceding any of the following events: 1. a modification (or collection of modifications) at such Other Unit commenced after the Date of Lodging of this Consent Decree increases the maximum hourly

49emission rate for such Other Unit for the relevant pollutant (NO x or SO 2 ) (as measured by 40 C.F.R. § 60.14(b) and (h)); 2. the aggregate of all Capital Expenditures made at such Other Unit exceed $125/KW on the Unit’s Boiler Island (based on the generating capacities identified in Paragraph 7) during the period from the Date of Entry of this Consent Decree through December 31, 2015. (Capital Expenditures shall be measured in calendar year 2007 constant dollars, as adjusted by the McGraw-Hill Engineering News-Record Construction Cost Index); or 3. a modification (or collection of modifications) at such Other Unit commenced after the Date of Lodging of this Cons ent Decree results in an emissions increase of NO x and/or SO 2 at such Other Unit, and such increase: (i) presents, by itself, or in combination with other emissions or sources, “an imminent and 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 (i v) causes or contributes to any adverse impact on any formally-recognized air quality and related values in any Class I area. The introduction of any new or changed NAAQS shall not, sta nding alone, provide the showing needed under Subparagraphs (3)(ii) or (3)(iii) of this Paragr aph, to pursue any claim for a modification at an Other Unit resolved under Subparagraph A of this Section. b. Solely with respect to Other Units at the plant listed below, the United States may also pursue claims arising from a modification (or collection of modifications) at such Other Units commenced after the Date of Lodging of this Consent Decree if such modification (or collection of modifications) results in an emissions increase of SO 2 at such Other Unit, and such increase causes the emissions at the plant at issue to exceed the Plant-Wide Annual Rolling 50Average Tonnage Limitation for SO 2 at Clinch River listed in the table below for year 2010

- 2014 and/or 2015 and beyond:

Plant Year SO 2 Tons Limit Clinch River 2010 - 2014 21,700 Clinch River 2015 and each year thereafter 16,300

C. Resolution of Past Claims of the States and Citizen Plaintiffs and Reservation of Rights. 139. The States and Citizen Plaintiffs agree that this Consent Decree resolves all civil claims that have been alleged in their respective complaints or could have been alleged against Defendants prior to the Date of Lodging of this Consent Decree for violations of: (a) Parts C or D of Subchapter I of the Clean Air Act, 42 U.S.C. §§ 7470-7492, 7501-7515, and (b) Section 111 of the Act, 42 U.S.C. § 7411, and 40 C.F.R § 60.14, at Units within the AEP Eastern System. 140. The States and Citizen Plaintiffs expressly do not join in giving the Defendants the covenant provided by the United States through Paragraph 133 of this Consent Decree, do not release any claims under the Clean Air Act and its implementing regulations arising after the Date of Lodging of this Consent Decree, and rese rve their rights, if any, to bring any actions against the Defendants pursuant to 42 U.S.C. § 7604 for any claims arising after the Date of Lodging of this Consent Decree. 141. Notwithstanding Paragraph 140, the States and Citizen Plaintiffs release Defendants from any civil claim that may arise under the Clean Air Act for Defendants’ performance of activities that this Consent Decree expressly directs Defendants to undertake, 51except to the extent that such activities would cause a significant increase in the emission of a criteria pollutant other than SO 2 , NO x , or PM. 142. Retention of Authority Regarding NAAQS Exceedences . Nothing in this Consent Decree shall be construed to affect the authority of the United States or any state under applicable federal statutes or regulations and a pplicable state statutes or regulations to impose appropriate requirements or sanctions on any Unit in the AEP Eastern System, including, but not limited to, the Units at the Clinch River plant, if the United States or a state determines that emissions from any Unit in the AEP Eastern System result in violation of, or interfere with the attainment and maintenance of, any ambient air quality standard. XI. PERIODIC REPORTING 143. Beginning on March 31, 2008, and continuing annually thereafter on March 31 until termination of this Consent Decree, and in addition to any other express reporting requirement in this Consent Decree, Defendants shall submit to the Unites States, the States, and the Citizen Plaintiffs a progress report in complia nce with Appendix B of this Consent Decree. 144. In any periodic progress report submitted pursuant to this Section, Defendants may incorporate by reference information previously submitted under their Title V permitting requirements, provided that Defendants attach the Title V permit report, or the relevant portion thereof, and provide a specific reference to the provisions of the Title V permit report that are responsive to the information required in the periodic progress report. 145. In addition to the progress reports required pursuant to this Section, Defendants shall provide a written report to the United States, the States, and the Citizen Plaintiffs of any violation of the requirements of this Consent Decr ee within fifteen (15) days of when Defendants knew or should have known of any such violation. In this report, Defendants shall explain the 52cause or causes of the violation and all measures taken or to be taken by Defendants to prevent such violations in the future. 146. Each report shall be signed by Defendants’ Vice President of Environmental Services 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 direction 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. 147. If any SO 2 or NO x Allowances are surrendered to any third party pursuant to this Consent Decree, the third party’s certification pursuant to Paragraphs 83 and 95 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 understand that there are significant penalties for submitting false, inaccurate, or incomplete information to the United States.

53XII. REVIEW AND APPROVAL OF SUBMITTALS 148. Defendants shall submit each plan, report, or other submission required by this Consent Decree to the Plaintiffs specified, whenever such a document is required to be submitted for review or approval pursuant to this Consent Decree. The Plaintiff(s) to whom the report is submitted, as required, may approve the submittal or decline to approve it and provide written comments explaining the bases for declining such approval as soon as reasonably practicable. Such Plaintiff(s) will endeavor to coordinate their comments into one document when explaining their bases for declining such approval. Within sixty (60) days of receiving written comments from any of the Plaintiff(s), Defendants shall either: (a) revise the submittal consistent with the written comments and provide the revised submittal to the Plaintiff(s); or (b) submit the matter for dispute resolution, including the period of informal negotiations, under Section XV (Dispute Resolution) of this Consent Decree. 149. Upon receipt of Plaintiffs’ or Plaintiff’s (as the case may be) final approval of the submittal, or upon completion of the submittal pursuant to dispute resolution, Defendants shall implement the approved submittal in accordance with the schedule specified therein.

54XIII. STIPULATED PENALTIES 150. For any failure by Defendants to comply with the terms of this Consent Decree, and subject to the provisions of Sections XIV (Force Majeure) and XV (Dispute Resolution), Defendants shall pay, within thirty (30) days after receipt of written demand to Defendants by the United States, the following stipulated penalties to the United States:

Consent Decree Violation Stipulated Penalty (Per Day, Per Violation, Unless Otherwise Specified) a. Failure to pay the civil penalty as specified in Section IX (Civil Penalty) of this Consent Decree $10,000 per day b. Failure to comply with any applicable 30-Day Rolling Average Emission Rate, 30-Day Rolling Average Removal Efficiency, Emission Rate for PM, or Other SO 2 Measures 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, 30-Day Rolling Average Removal Efficiency, Emission Rate for PM, or Other SO 2 Measures 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, 30-Day Rolling Average Removal Efficiency, Emission Rate for PM, or Other SO 2 Measures 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

55Consent Decree Violation Stipulated Penalty (Per Day, Per Violation, Unless Otherwise Specified) e. Failure to comply with the Eastern System-Wide Annual Tonnage Limitation for SO 2 $5,000 per ton for the first 1000 tons, and $10,000 per ton for each additional ton above 1000 tons, plus the surrender, pursuant to the procedures set forth in Paragraphs 82 and 83, of NO x Allowances in an amount equal to two times the number of tons by which the limitation was exceeded f. Failure to comply with the Plant-Wide Annual Rolling Tonnage Limitation for SO 2 at Clinch River $40,000 per ton, plus the surrender, pursuant to the procedures set forth in Paragraphs 95 and 96, of SO 2 Allowances in an amount equal to two times the number of tons by which the limitation was exceeded g. Failure to comply with the Eastern System-Wide Annual Tonnage Limitation for NO x $5,000 per ton for the first 1000 tons, and $10,000 per ton for each additional ton above 1000 tons, plus the surrender, pursuant to the procedures set forth in Paragraphs 82 and 83, of NO x Allowances in an amount equal to two times the number of tons by which the limitation was exceeded h. Failure to install, commence operation, or Continuously Operate a pollution control device required under this Consent Decree $10,000 per day per violation during the first 30 days, $32,500 per day per violation thereafter i. Failure to Retire, Retrofit, or Re-power a Unit by the date specified in this Consent Decree $10,000 per day per violation during the first 30 days, $32,500 per day per violation thereafter 56Consent Decree Violation Stipulated Penalty (Per Day, Per Violation, Unless Otherwise Specified) j. Failure to install or operate CEMS as required in this Consent Decree $1,000 per day per violation k. Failure to conduct performance tests of PM emissions, as required in this Consent Decree $1,000 per day per violation l. Failure to apply for any permit required by Section XVI (Permits) $1,000 per day per violation m. Failure to timely submit, modify, or implement, as approved, the reports, plans, studies, analyses, protocols, or other submittals required in this Consent Decree $750 per day per violation during the first ten days, $1,000 per day per violation thereafter n. Using NO x Allowances except as permitted by Paragraphs 75, 76, and 78 The surrender of NO x Allowances in an amount equal to four times the number of NO x Allowances used in violation of this Consent Decree o. Failure to surrender NO x Allowances as required by Paragraphs 75 and 79 (a) $32,500 per day plus (b) $7,500 per NO x Allowance not surrendered p. Failure to surrender SO 2 Allowances as required by Paragraph 93 (a) $32,500 per day plus (b) $1,000 per SO 2 Allowance not surrendered q. Failure to demonstrate the third party surrender of an SO 2 Allowance or NO x Allowance in accordance with Paragraphs 95-96 and 82-83. $2,500 per day per violation

r. Failure to implement any of the Environmental Mitigation Projects described in Appendix A in compliance with Section VIII (Environmental Mitigation Projects) of this Consent Decree The difference between the cost of the Project, as identified in Appendix A, and the dollars Defendants spent to implement the Project

57Consent Decree Violation Stipulated Penalty (Per Day, Per Violation, Unless Otherwise Specified) s. Failure to fund an Environmental Mitigation Project, as submitted by the States, in compliance with Section VIII (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 t. Failure to Continuously Operate required Other NO x Pollution Controls required in Paragraph 69 $10,000 per day during the first 30 days, and $32,500 each day thereafter u. Failure to comply with the Plant-Wide Annual Tonnage Limitation for SO 2 at Kammer $40,000 per ton, plus the surrender, pursuant to the procedures set forth in Paragraphs 95 and 96 of SO 2 Allowances in an amount equal to two times the number of tons by which the limitation was exceeded v. Any other violation of this Consent Decree $1,000 per day per violation

151. Violation of an Emission Rate or 30-Day Rolling Average Removal Efficiency that is based on a 30-Day Rolling Average is a violation on every day on which the average is based. Where a violation of a 30-Day Rolli ng Average Emission Rate or 30-Day Rolling Average Removal Efficiency (for the same pollutant and from the same source) recurs within periods of less than thirty (30) days, Defendants shall not pay a daily stipulated penalty for any day of the recurrence for which a stipulated penalty has already been paid. 152. 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. 58153. Defendants shall pay all stipulated penalties to the United States within thirty (30) days of receipt of written demand to Defendants from the United States, and shall continue to make such payments every thirty (30) days thereafter until the violation(s) no longer continues, unless Defendants elect within twenty (20) days of receipt of written demand to Defendants from the United States to dispute the accrual of stipulated penalties in accordance with the provisions in Section XV (Dispute Resolution) of this Consent Decree. 154. Stipulated penalties shall continue to accrue as provided in accordance with Paragraph 152 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 XV (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 within thirty (30) days of the effec tive date of the agreement or of the receipt of Plaintiffs’ decision; b. If the dispute is appealed to the Court and Plaintiffs prevail in whole or in part, Defendants 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, below;

59c. If the Court’s decision is appealed by any Party, Defendants 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 the Plaintiffs and Defendants, or determined by the Plaintiffs through Dispute Resolution, to be owing may be less than the stipulated penalty amounts set forth in Paragraph 150. 155. All stipulated penalties shall be paid in the manner set forth in Section IX (Civil Penalty) of this Consent Decree. 156. Should Defendants 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. 157. The stipulated penalties provided for in this Consent Decree shall be in addition to any other rights, remedies, or sanctions availa ble to Plaintiffs by reason of Defendants’ failure to comply with any requirement of this Consent Decree or applicable law, except that for any violation of the Act for which this Consent Decree provides for payment of a stipulated penalty, Defendants shall be allowed a credit for stipulated penalties paid against any statutory penalties also imposed for such violation.

60XIV. FORCE MAJEURE 158. For purposes of this Consent Decree, including, but not limited to, Paragraphs 67 and 86, a “Force Majeure Event” shall mean an event that has been or will be caused by circumstances beyond the control of Defendants or any entity controlled by Defendants that delays compliance with any provision of this C onsent Decree or otherwise causes a violation of any provision of this Consent Decree despite Defendants’ 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 or violation is minimized to the greatest extent possible. 159. 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 Defendants intend to assert a claim of Force Majeure, Defendants shall notify the Plaintiffs in writing as soon as practicable, but in no event later than twenty-one (21) business days following the date Defendants 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, Defendants 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 Defendants to prevent or minimize the delay or violation, the schedule by which Defendants propose to implement those measures, and Defendants’ rationale for attributing a delay or violation to a Force Majeure Event. Defendants shall adopt all reasonable measures to avoid or minimize such delays or violations. Defendants shall be deemed to know of any circumstance which Defendants or any entity controlled by Defendants knew or should have known. 61160. Failure to Give Notice. If Defendants materially fail to comply with the notice requirements of this Section, the Plaintiffs may void Defendants’ claim for Force Majeure as to the specific event for which Defendants have failed to comply with such notice requirement. 161. Plaintiffs’ Response. The Plaintiffs shall notify Defendants in writing regarding Defendants’ claim of Force Majeure as soon as reasonably practicable. If the Plaintiffs agree that a delay in performance has been or will be caused by a Force Majeure Event, the Parties shall stipulate to an extension of deadline(s) for performance of the affected compliance requirement(s) by a period equal to the delay actually caused by the event, or the extent to which Defendants may be relieved of stipulated penalties or other remedies provided under the terms of this Consent Decree. Such agreement shall be reduced to writing, and signed by all Parties. If the agreement results in a material change to th e terms of this Consent Decree, an appropriate modification shall be made pursuant to Section XXII (Modification). If such change is not material, no modification of this Consent Decree shall be required. 162. Disagreement. If Plaintiffs do not accept Defenda nts’ claim of Force Majeure, or if the Plaintiffs and Defendants cannot agree on the length of the delay actually caused by the Force Majeure Event, or the extent of relief required to address the delay actually caused by the Force Majeure Event, the matter shall be resolved in accordance with Section XV (Dispute Resolution) of this Consent Decree. 163. Burden of Proof. In any dispute regarding Force Majeure, Defendants shall bear the burden of proving that any delay in performan ce or any other violation of any requirement of this Consent Decree was caused by or will be caused by a Force Majeure Event. Defendants shall also bear the burden of proving that Defendants gave the notice required by this Section and the burden of proving the anticipated duration and extent of any delay(s) attributable to a 62Force 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. 164. Events Excluded . Unanticipated or increased costs or expenses associated with the performance of Defendants’ obligations under this Consent Decree shall not constitute a Force Majeure Event. 165. Potential Force Majeure Events. The Parties agree that, depending upon the circumstances related to an event and Defendants’ 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; Malfunction of a Unit or emission control device; unanticipated coal supply or pollution control reagent delivery interruptions; acts of God; acts of war or te rrorism; 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 Defendants to operate an AEP Eastern System Unit in response to a local or system-wide (state-wide or regional) emergency (which could include unanticipated required operation to avoid loss of load or unserved load). Depending upon the circumstances and Defendants’ 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 Defendants and Defendants have 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. 63166. As part of the resolution of any matter submitted to this Court under Section XV (Dispute Resolution) of this Consent Decree regarding a claim of Force Majeure, the Plaintiffs and Defendants 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 Plaintiffs or approved by the Court. Defendants shall be liable for stipulated penalties for their failure thereafter to complete the work in accordance with the extended or modified schedule (provided that Defendants shall not be precluded from making a fu rther claim of Force Majeure with regard to meeting any such extended or modified schedule). XV. DISPUTE RESOLUTION 167. 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 Parties. 168. The dispute resolution procedure required herein shall be invoked by one Party giving written notice to the other Parties 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 Parties 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. 169. 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) days from the date of the first meeting among the disputing Parties’ representatives unless they agree in writing to shorten or extend 64this 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). 170. If the disputing Parties are unable to reach agreement during the informal negotiation period, the Plaintiffs shall provide Defendants with a written summary of their position regarding the dispute. The written position provided by Plaintiffs shall be considered binding unless, within forty-five (45) days thereafter, Defendants seek judicial resolution of the dispute by filing a petition with this Court. The Plaintiffs may respond to the petition within forty-five (45) days of filing. In their initia l 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. 171. 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. 172. 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. 173. 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. Defendants shall be liable for stipulated penalties for their failure thereafter to complete the work in accordance 65with the extended or modified schedule, provided that Defendants 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. 174. The Court shall decide all disputes pursuant to applicable principles of law for resolving such disputes. In their initial filings with the Court under Paragraph 170, the disputing Parties shall state their respective positions as to the applicable standard of law for resolving the particular dispute. XVI. PERMITS 175. Unless expressly stated otherwise in this Consent Decree, in any instance where otherwise applicable law or this Consent Decree requires Defendants 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, Defendants shall make such application in a timely manner. Defendants shall provide Notice to Plaintiffs under Section XVIII (Notices), for each Unit that Defendants submit an application for any permit described in this Paragraph 175. 176. Notwithstanding the previous Paragraph, nothing in this Consent Decree shall be construed to require Defendants to apply for or obtain a PSD or Nonattainment NSR permit for physical changes in, or changes in the method of operation of, any AEP Eastern System Unit that would give rise to claims resolved by Para graph 132 and 133, subject to Paragraphs 134 through 138, or Paragraphs 139 and 141 of this Consent Decree. 177. When permits are required as described in Paragraph 175, Defendants 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 66information by the permitting authorities. Any failure by Defendants to submit a timely permit application for any Unit in the AEP Eastern System shall bar any use by Defendants of Section XIV (Force Majeure) of this Consent Decree, where a Force Majeure claim is based on permitting delays. 178. 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 or limit has or will become part of a Title V permit, subject to the terms of Section XXVI (Conditional Termina tion of Enforcement Under Decree) of this Consent Decree. 179. Within three (3) years from the Date of Entry of this Consent Decree, and in accordance with federal and/or state requirements for modifying or renewing a Title V permit, Defendants shall amend any applicable Title V permit application, or apply for amendments to their Title V permits, to include a schedule for any Unit-specific performance, operational, maintenance, and control technology requirements established by this Consent Decree including, but not limited to, required emission rates or other limitations. For Units subject to a requirement to Retire, Retrofit, or Re-power, Defendants shall apply to modify, renew, or obtain any applicable Title V permit to include a schedule for any Unit-specific performance, operation, maintenance, and control technology requirements established by this Consent Decree including, but not limited to, required emission rates or other limitations, within (12) twelve months of making such election to Retire, Retrofit, or Re-power.

67180. Within one (1) year from commencement of operation of each pollution control device to be installed, upgraded, and/or operated under this Consent Decree, Defendants shall apply to include the requirements and limitations enumerated in this Consent Decree into federally-enforceable non-Title V permits and/or site-specific amendments to the applicable state implementation plans to reflect all new requirements applicable to each Unit in the AEP Eastern System, the Plant-Wide Annual Rolling Average Tonnage Limitation for SO 2 at Clinch River, and the Plant-Wide Annual Tonnage Limitation for SO 2 at Kammer. 181. Defendants shall provide the United States with a copy of each application for a federally-enforceable non-Title V permit or amendment to a state implementation plan, as well as a copy of any permit proposed as a result of such application, to allow for timely participation in any public comment period. 182. Prior to termination of this Consent Decree, Defendants shall obtain enforceableprovisions in their Title V permits for the AEP Eastern System that incorporate (a) any Unitspecific requirements and limitations of this Cons ent Decree, such as performance, operational, maintenance, and control technology requirements, (b) the Plant-Wide Annual Rolling Average Tonnage Limitation for SO 2 at Clinch River and the Plant-Wide Annual Tonnage Limitation for SO 2 at Kammer, and (c) the Eastern System-Wide Annual Tonnage Limitations for SO 2 and NO x . If Defendants do not obtain enforceable pr ovisions for the Eastern System-Wide Annual Tonnage Limitations for SO 2 and NO x in such Title V permits, then the requirements in Paragraphs 86 and 67 shall remain enforceable under this Consent Decree and shall not be subject to termination. 183. If Defendants sell or transfer to an entity unrelated to Defendants (“Third-Party Purchaser”) part or all of Defendants’ Ownership Interest in a Unit in the AEP Eastern System, 68Defendants shall comply with the requirements of Section XIX (Sales or Transfers of Operational or Ownership Interests) with regard to that Unit prior to any such sale or transfer unless, following any such sale or transfer, Defendants remain the holder of the Title V permit for such facility. XVII. INFORMATION COLLECTION AND RETENTION 184. Any authorized representative of the United States, including attorneys, contractors, and consultants, upon presentation of credentials, shall have a right of entry upon the premises of any facility in the AEP Eastern 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 Defendants or their representatives, contractors, or consultants; and d. assessing Defendants’ compliance with this Consent Decree. 185. Defendants shall retain, and instruct their contractors and agents to preserve, all non-identical copies of all records and documents (including records and documents in electronic form) now in their or their contractors’ or ag ents’ possession or control (with the exception of their contractors’ copies of field drawings a nd specifications), and that directly relate to Defendants’ performance of their obligations under this Consent Decree until six (6) years following completion of performance of such obligations. This record retention requirement shall apply regardless of any corporate document retention policy to the contrary. 186. All information and documents submitted by Defendants pursuant to this Consent Decree shall be subject to any requests under applicable law providing public disclosure of 69documents unless (a) the information and documents are subject to legal privileges or protection or (b) Defendants claim and substantiate in accordance with 40 C.F.R. Part 2 that the information and documents contain confidential business information. 187. Nothing in this Consent Decree shall limit the authority of EPA to conduct tests and inspections at Defendants’ facilities under Section 114 of the Act, 42 U.S.C. § 7414, or any other applicable federal or state laws, regulations, or permits. XVIII. NOTICES 188. 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: Chief, Environmental Enforcement Section Environment and Natural Resources Division U.S. Department of Justice P.O. Box 7611, Ben Franklin Station Washington, DC 20044-7611 DJ# 90-5-2-1-06893 and Director, Air Enforcement Division Office of Enforcement and Compliance Assurance U.S. Environmental Protection Agency Ariel Rios Building [Mail Code 2242A] 1200 Pennsylvania Avenue, N.W. Washington, DC 20460 and Air Enforcement & Compliance Assurance Branch U.S. EPA Region V 77 W. Jackson St. Mail Code AE17J Chicago, IL 60604 70and Air Protection Division Director U.S. EPA Region III 1650 Arch Street Philadelphia, PA 19103 As to the State of Connecticut: Office of the Attorney General Environmental Department P.O. Box 120 Hartford, Connecticut 06141-0120 As to the State of Maryland: Frank Courtright Program Manager Air Quality Compliance Program Maryland Department of the Environment 1800 Washington Blvd. Baltimore, Maryland 21230 fcourtright@mde.state.md.us As to the Commonwealth of Massachusetts: Frederick D. Augenstern, Assistant Attorney General Office of the Attorney General 1 Ashburton Place, 18th floor Boston, Massachusetts 02108 fred.augenstern@state.ma.us and Douglas Shallcross, Esquire Department of Environmental Protection Office of General Counsel 1 Winter Street Boston, Massachusetts 02108 Douglas.Shallcross@state.ma.us

71As to the State of New Hampshire: Director, Air Resources Division New Hampshire Department of Environmental Services 29 Hazen Dive Concord, New Hampshire 03302-0095 As to the State of New Jersey: Kevin P. Auerbacher Section Chief Environmental Enforcement Section R.J. Hughes Justice Complex 25 Market Street P.O. Box 093 Trenton, New Jersey 08625-0093 As to the State of New York: Robert Rosenthal Assistant Attorney General New York State Attorney General's Office The Capitol Albany, New York 12224 As to the State of Rhode Island: Tricia K. Jedele Special Assistant Attorney General 150 South Main Street Providence, RI 02903 (401) 274-4400, Ext. 2400 tjedele@riag.ri.gov As to the State of Vermont: Environmental Division Office of the Attorney General 109 State Street Montpelier, Vermont 05609-1001 and

72Director Air Pollution Control Division Department of Environmental Conservation Agency of Natural Resources Building 3 South 103 South Main Street Waterbury, Vermont 05671-0402 As to the Citizen Plaintiffs: Nancy S. Marks Natural Resources Defense Council, Inc. 40 West 20th Street New York, New York 10011 (212) 727-4414 nmarks@nrdc.org and Albert F. Ettinger Environmental Law and Policy Center 35 East Wacker Dr. Suite 1300 Chicago, Illinois 60601-2110 (312) 673-6500 aettinger@elpc.org As to Defendants : Vice President, Environmental Services American Electric Power Service Corporation 1 Riverside Plaza Columbus, OH 43215 jmmcmanus@aep.com and General Counsel American Electric Power 1 Riverside Plaza Columbus, OH 43215 jbkeane@aep.com 189. All notifications, communications, or submissions made pursuant to this Section shall be sent as follows: (a) by overnight mail or overnight delivery service to the United States; 73and (b) by electronic mail to all Plaintiffs, if prac ticable, but if not practicable, then by overnight mail or overnight delivery service to the States and Citizen Plaintiffs. All notifications, communications, and transmissions sent by overnight delivery service shall be deemed submitted on the date they are delivered to the delivery service. 190. Any Party may change either the notice recipient or the address for providing notices to it by serving all other Parties with a notice setting forth such new notice recipient or address. XIX. SALES OR TRANSFERS OF OPERATIONAL OR OWNERSHIP INTERESTS 191. If Defendants propose to sell or transfer an Operational or Ownership Interest to an entity unrelated to Defendants (“Third Party”), they shall advise the Third Party 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 the Plaintiffs pursuant to Section XVIII (Notices) of this Consent Decree at least sixty (60) days before such proposed sale or transfer. 192. No sale or transfer of an Operational or Ownership Interest shall take place before the Third Party and Plaintiffs have executed, and the Court has approved, a modification pursuant to Section XXII (Modification) of this Consent Decree making the Third Party a party to this Consent Decree and jointly and severally liable with Defendants for all the requirements of this Decree that may be applicable to the transferred or purchased Interests. 193. This Consent Decree shall not be construed to impede the transfer of any Interests between Defendants and any Third Party 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 Defendants and any Third Party – of the burdens of compliance with this Decree,

74provided that both Defendants and such Third Party shall remain jointly and severally liable for the obligations of the Consent Decree applicable to the transferred or purchased Interests. 194. If the Plaintiffs agree, the Plaintiffs, Defendants, and the Third Party that has become a party to this Consent Decree pursuant to Paragraph 192, may execute a modification that relieves Defendants of liability under this Consent Decree for, and makes the Third Party liable for, all obligations and liabilities applicable to the purchased or transferred Interests. Notwithstanding the foregoing, however, Defendant s may not assign, and may not be released from, any obligation under this Consent Decree that is not specific to the purchased or transferred Interests, including the obligations set forth in Section VIII (Environmental Mitigation Projects), Paragraphs 86 and 67, and Section IX (Civil Penalty). Defendants may propose and the Plaintiffs may agree to restrict the scope of the joint and several liability of any purchaser or transferee for any obligations of th is Consent Decree that are not specific to the transferred or purchased Interests, to the extent such obligations may be adequately separated in an enforceable manner. 195. Defendants may propose and Plaintiffs may agree to restrict the scope of joint and several liability of any purchaser or transferee for any AEP Eastern System obligations to the extent such obligations may be adequately separated in an enforceable manner using the methods provided by or approved under Section XVI (Permits). 196. Paragraphs 191-195 of this Consent Decree do not apply if an Interest is sold or transferred solely as collateral security in order to consummate a financing arrangement (not including a sale-leaseback), so long as Defendants: (a) remain the operator (as that term is used and interpreted under the Clean Air Act) of the subject AEP Eastern System Unit(s); (b) remain

75subject to and liable for all obligations and liabilities of this Consent Decree; and (c) supply Plaintiffs with the following certification within thirty (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 American Electric Power (“AEP”), hereby jointly certify under Title 18 U.S.C. Section 1001, on our own behalf and on behalf of AEP, that any change in AEP’s Ownership Interest in any AEP Eastern System 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 AEP 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 AEP’s ability, legally or otherwise, to comply timely with all terms and provisions of the Consent Decree entered in United States, et al. v. American Electric Power Service Corp., et al., Civil Action No. C2-99-1250 (“AEP I”) and United States, et al. v. American Electric Power Service Corp., et al. , Civil Action Nos. C2-04-1098 and C2-05-360 (“AEP II”); c) does not affect AEP’s operational control of any Unit covered by that Consent Decree in a manner that is inconsistent with AEP’s performance of its obligations under the Consent Decree; and d) in no way affects the status of AEP’s obligations or liabilities under that Consent Decree.”

XX. EFFECTIVE DATE 197. The effective date of this Consent Decree shall be the Date of Entry. XXI. RETENTION OF JURISDICTION 198. The Court shall retain jurisdiction of this case after the Date of Entry of this Consent Decree to enforce compliance with the te rms and conditions of this Consent Decree and to 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.

76XXII. MODIFICATION 199. The terms of this Consent Decree may be modified only by a subsequent written agreement signed by the Plaintiffs and Defendants. Where the modification constitutes a material change to any term of this Decree, it shall be effective only upon approval by the Court. XXIII. GENERAL PROVISIONS 200. 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 limitations and requirements set forth herein do not relieve Defendants from any obligation to comply with other state and federal requirements under the Clean Air Act at any Units covered by this Consent Decree, including the Defendants’ obligation to satisfy any state modeling requirements set forth in a state implementation plan. 201. This Consent Decree does not apply to any claim(s) of alleged criminal liability. 202. In any subsequent administrative or judicial action initiated by any of the Plaintiffs for injunctive relief or civil penalties relating to the facilities covered by this Consent Decree, Defendants 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 any of the Plaintiffs in the subsequent proceeding were brought, or should ha ve been brought, in the instant case; provided, however, that nothing in this Paragraph affects the validity of Paragraphs Paragraph 132 and 133, subject to Paragraphs 134 through 138, or Paragraphs 139 and 141. 203. Except as specifically provided by this Consent Decree, nothing in this Consent Decree shall relieve Defendants of their obligation to comply with all applicable federal, state, and local laws and regulations. Subject to th e provisions in Section X (Resolution of Civil 77Claims Against Defendants), nothing contained in this Consent Decree shall be construed to prevent or limit the rights of the Plaintiffs to obtain penalties or injunctive relief under the Act or other federal, state, or local statutes, regulations, or permits. 204. At any time prior to termination of this Consent Decree, Defendants may request approval from Plaintiffs to implement other control technology for SO 2 or NO x than what is required by this Consent Decree. In seeking such approval, Defendants must demonstrate that such alternative control technology is capable of achieving pollution reductions equivalent to an FGD (for SO 2 ) or SCR (for NO x ) at the Units in the AEP Eastern System at which Defendants seek approval to implement such other control technology for SO 2 or NO x . Approval of such a request is solely at the discretion of the Plaintiffs. 205. 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, 62 Fed. Reg. 8314 (Feb. 24, 1997)) concerning the use of data for any purpose under the Act generated either by the reference methods specified herein or otherwise. 206. Each limit and/or other requirement established by or under this Consent Decree is a separate, independent requirement. 207. 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 0.100 is not met if the actual Emission Rate is 0.101. Defendants 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 78Emission Rate is 0.1004, that shall be reported as 0.100, and shall be in compliance with an Emission Rate of 0.100, and if an actual Emission Rate is 0.1005, that shall be reported as 0.101, and shall not be in compliance with an Emission Rate of 0.100. Defendants shall report data to the number of significant digits in which the standard or limit is expressed. 208. This Consent Decree does not limit, enlarge, or affect the rights of any Party to this Consent Decree as against any third parties. 209. 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 supersedes 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. 210. Except for Citizen Plaintiffs, each Party to this action shall bear its own costs and attorneys’ fees. Defendants shall reimburse the Citizen Plaintiffs’ attorneys’ fees and costs, pursuant to 42 U.S.C. § 7604(d), and the agreement between counsel for Defendants and Citizen Plaintiffs within thirty (30) days of th e Date of Entry of this Consent Decree. XXIV. SIGNATORIES AND SERVICE 211. 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. 212. This Consent Decree may be signed in counterparts, and such counterpart signature pages shall be given full force and effect.

79213. 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. XXV. PUBLIC COMMENT 214. The Parties agree and acknowledge that final approval by the United States and the entry of this Consent Decree is subject to the procedures of 28 C.F.R. § 50.7, which provides for notice of 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. The Defendants shall not oppose entry of this Consent Decree by this Court or challenge any provision of this Consen t Decree unless the United States has notified the Defendants, in writing, that the United States no longer supports entry of the Consent Decree. XXVI. CONDITIONAL TERMINATION OF ENFORCEMENT UNDER DECREE

215. Termination as to Completed Tasks. As soon as Defendants complete a construction project or any other requirement of this Consent Decree that is not ongoing or recurring, Defendants may, by motion to this Court, seek termination of the provision or provisions of this Consent Decree that imposed the requirement. 216. Defendants: Conditional Termination of Enforcement Through the Consent Decree. After

a. have successfully completed construction, and have maintained Continuous Operation, of all pollution controls as required by this Consent Decree; 80b. have obtained final Title V permits (i) as required by the terms of this Consent Decree; (ii) that cover all Units in this Consent Decree; and (iii) that include as enforceable permit terms all of the Unit performance and other requirements specified in this Consent Decree; and

c. certify that the date is later than December 31, 2022; then Defendants may so certify these facts to the Plai ntiffs and this Court. If the Plaintiffs do not object in writing with specific reasons within fort y-five (45) days of receipt of Defendants’ certification, then, for any Consent Decree violati ons that occur after the filing of notice, the Plaintiffs shall pursue enforcement of the requirements contained in the Title V permit through the applicable Title V permit and not through this Consent Decree. 217. Resort to Enforcement under this Consent Decree. Notwithstanding Paragraph 216, if enforcement of a provision in this Consent Decree cannot be pursued by a Party under the applicable Title V permit, or if a Consent Decree requirement was intended to be part of a Title V Permit and did not become or remain part of such permit, then such requirement may be enforced under the terms of this Consent Decree at any time.

81_________________________________________

_________________________________________ XXVII. FINAL JUDGMENT 218. Upon approval and entry of this Consen t Decree by the Court, this Consent Decree shall constitute a final judgment among the Parties. SO ORDERED, THIS _____ DAY OF ________________, 2007.

HONORABLE EDMUND A. SARGUS, JR. UNITED STATES DISTRICT COURT JUDGE

HONORABLE GREGORY L. FROST UNITED STATES DISTRICT COURT JUDGE

82APPENDIX A ENVIRONMENTAL MITIGATION PROJECTS In compliance with and in addition to the re quirements in Section VIII of this Consent Decree (Environmental Mitigation Projects), Defendants shall comply with the requirements of this Appendix to ensure that the benefits of the $36 million in federally directed Environmental Mitigation Projects are achieved. I. National Parks Mitigation A. Within 45 days from the Date of Entry, Defendants shall pay to the National Park Service the sum of $2 million to be used in accordance with the Park System Resource Protection Act, 16 U.S.C. § 19jj, for the restoration of land, watersheds, vegetation, and forests using adaptive management techniques designed to improve ecosystem health and mitigate harmful effects from air pollution. This may include reforestation or restoration of native species and acquisition of equivalent resources and support for collaborative initiatives with state and local agencies and other stakeholders to develop plans to assure resource protection over the long-term. Projects will focus on one or more of the following Class I areas alleged in the underlying action to have been injured by emissions from Defendants facilities: Shenandoah National Park, Mammoth Cave National Park, and Great Smoky Mountains National Park. B. Payment of the amount specified in the preceding paragraph shall be made to the Natural Resource Damage and Assessment Fund managed by the United States Department of the Interior. Instructions for transferring funds will be provided to the Defendants by the National Park Service. Notwithstanding Section I.A of this Appendix, payment of funds by Defendants is not due until ten (10) days after receipt of payment instructions. C. Upon payment of the required funds into the Natural Resource Damage and Assessment Fund, Defendants shall have no further responsibilities regarding the implementation of any project selected by the National Park Service in connection with this provision of the Consent Decree. II. Overall Environmental Mitigation Project Schedule and Budget A. Within 120 days of the Date of Entry, as further described below, Defendants shall submit plans to EPA for review and approval for completing the remaining $34 million in federally directed Environmental Mitigation Projects specified in this Appendix over a period of not more than five (5) years from the Date of Entry. EPA will consult with the Citizen Plaintiffs, through their counsel, prior to approving or commenting on any proposed plan. The Parties agree that Defendants are entitled to spread their payments for Environmental Mitigation Projects evenly over the five-year period commencing upon the Date of Entry. Defendants are not, however, precluded from accelerating payments to better effectuate a proposed mitigation plan, provided however, Defendants shall not be 1entitled to any reduction in the nominal amount of the required payments by virtue of the early expenditures. EPA may, but is not required to, approve a proposed Project budget that results in a back-loading of some expenditures. EPA shall determine prior to approval that all Projects are consistent with federal law. B. Defendants may, at their election, consolidate the plans required by this Appendix into a single plan. C. In addition to the requirements set forth below, Defendants shall submit within 120 days of the Date of Entry, a summary-level budget and Project time-line that covers all of the Projects proposed. D. Beginning March 31, 2008, and continuing on March 31 of each year thereafter until completion of each Project (including any applicable periods of demonstration or testing), Defendants shall provide the United States and Citizen Plaintiffs with written reports detailing the progress of each Project, including Project Dollars. E. Within 60 days following the completion of each Project required under Appendix A, Defendants shall submit to the United States and Citizen Plaintiffs a report that documents the date that the Project was completed, the results of implementing the Project, including the emission reductions or other environmental benefits achieved, and the Project Dollars expended by Defendants in implementing the Project. F. Upon approval of the plans required by this Appendix by EPA, Defendants shall complete the Environmental Mitigation Projects according to the approved plans. Nothing in this Consent Decree shall be interpreted to prohibit Defendants from completing Environmental Mitigation Projects before the deadlines specified in the schedule of an approved plan. III. Acquisition and Restoration of Ecologically Significant Areas in Indiana, Kentucky, North Carolina, Ohio, Pennsylvania, Virginia, and West Virginia A. Within 120 days of the Date of Entry, and on each anniversary of the initial submission for the following four (4) years, Defendants shall submit a plan to EPA for review and approval, in consultation with the Citizen Plaintiffs, for acquisition and/or restoration of ecol ogically significant areas in Indiana, Kentucky, North Carolina, Ohio, Pennsylvania, Virginia, and West Virginia (“Land Acquisition and Restoration”). Defendants shall spend no less than a total of $10 million in Project Dollars on Land Acquisition and Restoration over the five year period provided under this Appendix for completion of federally directed Environmental Mitigation Projects.

2B. Defendants’ proposed plan shall: 1. Describe the proposed Land Acquisition and Restoration projects in sufficient detail to allow the reader to ascertain how each proposed action meets the requirements set out below. For purposes of this Appendix and Section VIII (Environmental Mitigation Projects) of this Consent Decree, land acquisition means purchase 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. 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. Any proposal for acquisition of land must identify fully all owners of the interests in the land. Every proposal for acquisition 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 long-term protection of the ecological or environmental benefits sought to be achieved through the acquisition. 2. Describe generally the ecological significance of the area to be acquired or restored. In particular, identify the environmental/ecological benefits expected as a result of the proposed action. In proposing areas for acquisition and restoration, Defendants shall focus on those areas that are in most need of conservation action or that promise the greatest conservation return on investment. 3. Describe the expected cost of the Land Acquisition and Restoration, including the fair market value of any areas to be acquired. 4. Identify any person or entity other than Defendants that will be involved in the land acquisition or restoration action. Defendants shall describe the third-party’s role in the action and the basis for asserting that such entity is able and suited to perform the intended role. For purposes of this Section of the Appendix, third-parties shall only include non-profits; federal, state, and local agencies; or universities. Any proposed third-party must be legally authorized to perform the proposed action or to receive Project Dollars. 5. Include a schedule for completing and funding each portion of the project. C. Performance - Upon approval of the plan by EPA, after consultation with the Citizen Plaintiffs, Defendants shall complete the Land Acquisition and Restoration project according to the approved plan and schedule.

3IV. Nitrogen Impact Mitigation in the Chesapeake Bay A. Within 120 days of Date of Entry, Defendants shall submit a plan to EPA for review and approval, in consultation with the Citizen Plaintiffs, for the mitigation of adverse impacts on the Chesapeake Bay associated with nitrogen (“Chesapeake Bay Mitigation Project”). Defendants shall spend no less than a total of $3 million in Project Dollars on the Chesapeake Bay Mitigation Project. B. Defendant’s proposed plan shall: 1. Describe proposed Project(s) that reduce nitrogen loading in the Chesapeake Bay or otherwise mitigate the adverse effects of nitrogen in the Chesapeake Bay. Projects that may be approved include, by way of illustration, creation of forested stream buffers on agricultural land or other land cover to establish a “buffer zone” to keep livestock out of the adjoining waterway and to filter runoff before it enters the waterway. 2. Describe generally the expected environmental benefit of the proposed Chesapeake Bay Mitigation Project. The key criteria for selection of components of the Project are the magnitude of the expected ecological/environmental benefit(s) in relation to the cost and the relative permanence of the expected benefit(s). Expected loadings benefits should be quantified to the extent practicable. 3. Describe the expected cost of each element of the Chesapeake Bay Mitigation Project, including the fair market value of any interests in land to be acquired. 4. Identify any person or entity other than Defendants that will be involved in any aspect of the Chesapeake Bay Mitigation Project. Defendants shall describe the third-party’s role in the action and the basis for asserting that such entity is able and suited to perform the intended role. For purposesof this Section of the Appendix, third-parties shall only include nonprofits; federal, state, and local agencies; or universities. Any proposed third-party must be legally authorized to perform the proposed action or to receive Project Dollars. 5. Include a schedule for completing and funding each portion of the Project. C. Performance - Upon approval of the plan for Chesapeake Bay Mitigation by EPA, Defendants shall complete the Project according to the approved plan and schedule.

4V. Mobile Source Emission Reduction Projects A. Within 120 days of the Date of Entry, Defendants shall submit a plan to EPA for review and approval, in consultation with the Citizen Plaintiffs, for the completion of Projects to reduce emissions from Defendants’ fleet of barge tugboats on the Ohio River, diesel trains at or near power plants, Defendants’ fleet of motor vehicles in certain eastern states, and/or truck stops in certain eastern states (“Mobile Source Projects”). Defendants shall spend no less than a total of $21 million in Project Dollars on one or more of the three Mobile Source Projects specified in this Section, in accordance with the plans for such Projects approved by EPA, after consultation with the Citizen Plaintiffs. The key criteria for selection of components of the Mobile Source Projects are the magnitude of the expected environmental benefit(s) in relation to the cost. B. Diesel Tug/Train Project 1. Defendants are among the leading barge operators in the country, with operations on the Ohio River, the Mississippi River, and the Gulf Coast. Barges are propelled by tugboats, which generally use a type of marine diesel fuel known as No. 2 distillate fuel oil. Tugboats that switch to ultra-low sulfur diesel fuel (“ULSD”) reduce emissions of NO X , PM, volatile organic compounds (“VOCs”), and other air pollutants. All marine diesel fuel must be ULSD by June 1, 2012, pursuant to EPA’s Nonroad Diesel Rule ( see “Control of Emissions of Air Pollution from Nonroad Diesel Engines and Fuels; Final Rule,” 69 Fed. Reg. 38,958 (June 29, 2004)). Defendants also receive coal by diesel trains. 2. As part of the plan for Mobile Source Projects, Defendants may elect to achieve accelerated emission reductions from their tugboat fleet on the Ohio River (“Ohio River Tug Fleet”) and/or their diesel powered trains used at or near their power plants, as one of the three possible mobile source Projects under this Consent Decree (“Diesel Tug/Train Project”). 3. The Diesel Tug/Train Project shall require one or more of the following:

a. The accelerated retrofitting or re-powering of Tugs with engines that require the use of ULSD. Selection of this Project is expressly conditioned upon identification of satisfactory technology and an agreement between EPA and Defendants on how to credit Project Dollars towards this project. b. The retrofitting or repowering of the marine engines in the Ohio River Tug Fleet with diesel oxidation catalysts (“DOCs”), diesel particulate filters (“DPFs”), or other equivalent advanced technologies that reduce emissions of PM and VOCs from marine engines in tugboats (collectively “DOC/DPFs”). Defendants shall only install DOCs/DPFs that have received applicable approvals or 5verifications, if any, from the relevant regulatory agencies for reducing emissions from tugboat engines. Defendants must maintain any DOCs/DPFs installed as part of the Tug Project for the useful life of the equipment (as defined in the proposed Plan), even after the completion of the Tug Project. Project Dollars may be spent on DOCs/DPFs within 5 years of the Date of Entry, in accordance with the approved schedule for the mitigation projects in this Appendix.

c. The accelerated use of ULSD for the Ohio River Tug Fleet, from the Date of Entry through January 1, 2012. Notwithstanding any other provision of this Consent Decree, including this Appendix, Defendants shall only receive credit for the incremental cost of ULSD as compared to the cost of the fuel Defendants would otherwise utilize. d. Emission reduction measures for diesel powered trains. Such measures may include retro-fitting with, or conversion to, Multiple Diesel Engine GenSets that are EPA Tier III Off-Road certified; Diesel Electric Hybrid; Anti-idling controls/strategies and Auto Shut-Off capabilities. Selection of this Project is expressly conditioned upon identification of satisfactory technology and an agreement between EPA and Defendants on how to credit Project Dollars towards this project. 4. The proposed plan for the Diesel Tug/Train Project shall:

a. Describe the expected cost of the project, including the costs for any equipment, material, labor costs, and the proposed method for accounting for the cost of each element of the Diesel Tug/Train Project, including the incremental cost of ULSD. b. Describe generally the expected environmental benefit of the project, including any expected fuel efficiency improvements and quantify emission reductions expected.

c. Include a schedule for completing each portion of the Diesel Tug/Train Project. 5. Performance - Upon approval of the Diesel Tug/Train Project plan by EPA, Defendants shall complete the project according to the approved plan and schedule.

6C. Hybrid Vehicle Fleet Project 1. AEP has a fleet of approximately 11,000 motor vehicles in the eleven states where it operates, including vehicles in Indiana, Ohio, Michigan, Virginia, West Virginia, and Kentucky. 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 Defendants’ motor vehicles, such as diesel-electric engines, will improve fuel efficiency and reduce emissions of NO X , PM, VOCs, and other air pollutants. 2. As part of the plan for Mobile Source Projects, Defendants may elect to spend Project Dollars on the replacement of conventional motor vehicles in their fleet with newly manufactured Hybrid Vehicles (“Hybrid Vehicle Fleet Project”). 3. The proposed plan for the Hybrid Vehicle Fleet Project shall:

a. Propose the replacement of conventional gasoline or diesel powered motor vehicles (such as bucket trucks) with Hybrid Vehicles. For purposes of this subsection of this Appendix, “Hybrid Vehicle” means a vehicle that can generate and utilize electric power to reduce the vehicle’s consumption of fossil fuel. Any Hybrid Vehicle proposed for inclusion in the Hybrid Fleet Project shall meet all applicable engine standards, certifications, and/or verifications. b. Provide for Hybrid Vehicles replacement in that portion of Defendants’ fleet in Indiana, Ohio, Michigan, West Virginia, Virginia, and/or Kentucky. Notwithstanding any other provision of this Consent Decree, including this Appendix, Defendants shall only receive credit toward Project Dollars for the incremental cost of Hybrid Vehicles as compared to the cost of a newly manufactured, similar motor vehicle.

c. Prioritize the replacement of diesel-powered vehicles in Defendants’ fleet. d. Provide a method to account for the costs of the Hybrid Vehicles, including the incremental costs of such vehicles as compared to conventional gasoline or diesel motor vehicles.

e. Certify that Defendants will use the Hybrid Vehicles for their useful life (as defined in the proposed plan). f. Include a schedule for completing each portion of the Project.

7g. Describe generally the expected environmental benefits of the Project, including any fuel efficiency improvements, and quantify emission reductions expected. 4. Performance - Upon approval by EPA of the plan for the Hybrid Vehicle Fleet Project, after consultation with the Citizen Plaintiffs, Defendants shall complete the Project according to the approved plan. D. Truck Stop Electrification 1. Long-haul truck drivers typically idle their engines at night at rest areas to supply heat or cooling in their sleeper cab compartments, and to maintain vehicle battery charge while electrical appliances such as televisions, computers, and microwaves are in use. Modifications to rest areas to provide parking spaces with electrical power, heat, and air conditioning will allow truck drivers to turn their engines off. Truck stop electrification reduces idling time and therefore reduces diesel fuel usage, and thus reduces emissions of PM, NO x , and VOCs. 2. As part of the plan for Mobile Source Projects, Defendants may elect to achieve emission reductions by truck stop electrification, which shall include, where necessary, techniques and infrastructure needed to support such a program (“Truck Stop Electrification Project”). 3. The proposed plan for the Truck Stop Electrification Project shall:

a. Identify truck stops in one or more of the following States for Electrification: Ohio, Indiana, Kentucky, North Carolina, Pennsylvania, West Virginia, and Virginia. EPA may give preference to electrification Projects that are co-located, if possible, along the same transportation corridor. b. Describe the level of expected usage of the planned electrification facilities, air quality in the vicinity of the proposed Projects, proximity of the proposed Project to population centers, and whether the owner or some other entity is willing to pay for some portion of the work.

c. Provide for the construction of truck stop electrification stations with established technologies and equipment. d. Account for hardware procurement and installation costs at the recipient truck stops.

e. Include a schedule for completing each portion of the Project.

8f. Describe generally the expected environmental benefits of the Project and quantify emission reductions expected. 4. Performance - Upon approval of the plan for the Truck Stop Electrification Project by EPA, after consultation with the Citizen Plaintiffs, Defendants shall complete the Project according to the approved plan.

9APPENDIX B REPORTING REQUIREMENTS I. Annual Reporting Requirements In accordance with the dates specified belo w, for periods on and after the Date of Entry, Defendants shall submit annual reports to the United States, the States, and the Citizen Plaintiffs, electronically and in hard copy, as required by Paragraph 143 and certified as required by Paragraph 146. In su ch annual reports, Defendants shall include the following information: A. Eastern System-Wide Annual Tonnage Limitations for SO 2 and NO x Beginning on March 31, 2010, for the Eastern System-Wide Annual Tonnage Limitations for NO x , and March 31, 2011, for the Eastern System-Wide Annual Tonnage Limitations for SO 2 , and annually thereafter, Defe ndants shall report the following information: (a) the total actua l annual tons of the pollutant emitted from each Unit (or for Units vented to a common stack, from each combined stack) within the AEP Eastern System, as defined in Paragraph 7, during th e prior calendar year; (b) the total actual annual tons of the pollutant emitted from the AEP Eastern System during the prior calendar year; (c) the differen ce, if any, between the appl icable Eastern System-Wide Annual Tonnage Limitation for the pollutant in that calendar year and the amount reported in subparagraph (b); and (d) the a nnual average emission rate, expressed as a lb/mmBTU for NO x , for each Unit within the AEP Eastern System and for the entire AEP Eastern System during the prior calendar year. Data reported pursuant to this subsection shall be based upon the CEMS data submitted to the Clean Air Markets Division. B. Plant-Wide Annual Rolling Average Tonnage Limitation for SO 2 at Clinch River Beginning on March 31, 2011, and conti nuing annually thereafter, Defendants shall report: (a) the actual tons of SO 2 emitted from all Units at the Clinch River plant on an annual rolling average basis as defined in Paragraphs 47 and 88 for the prior calendar year; and (b) the applicable Plant-Wide Annual Rolling Average Tonnage Limitation for SO 2 at the Clinch River plant for the prior ca lendar year. For cale ndar years other than 2010 and 2015, Defendants shall also report th e 12-month rolling average emissions for each month. C. Plant-Wide Tonnage Limitation for SO 2 at Kammer Beginning on March 31, 2011, and conti nuing annually thereafter, Defendants shall report: (a) the actual tons of SO 2 emitted from all Units at the Kammer plant as specified in Paragraph 48 for the prior cal endar year; and (b) the Plant-Wide Tonnage Limitation for SO 2 at the Kammer plant for that calendar year.

1D. Reporting Requirements for Excess NO x Allowances 1. Reporting Requirements for Unrestricted Excess NO x Allowances Beginning on March 31, 2010, and conti nuing annually throu gh March 31, 2016, Defendants shall report the number of Unrestricted Excess NO x Allowances available each year between 2009 through 2015, and how or whether such allowances were used so that Defendants account for each Unrestricted Excess NO x Allowance for each year during 2009 through 2015. No later than Marc h 31, 2016, Defendants shall report: (a) the cumulative number of unused Unrestricted Excess NO x Allowances subject to surrender pursuant to Paragraph 75 and calculated pur suant to Paragraph 74, and (b) the total number of unused Unrestricted Excess NO x Allowances that they surrendered. 2. Reporting Requirements for Restricted Excess NO x Allowances

a. Beginning on March 31, 2010, and continuing annually through March 31, 2016, Defendants shall report: (a) the numbe r of Restricted Excess NOx Allowances available each year between 2009 through 2015; (b) the actual emissions from any New and Newly Permitted Unit during each year; (c) the actual NOx emissions from the five natural gas plants listed in Paragraph 76 dur ing each year; (d) th e amount, if any, of Restricted Excess NOx Allowances that are not subject to surrender each year because of Defendants’ investment in renewable energy as defined in Paragraph 77 and the data supporting Defendants’ calculation; and (e) th e difference between the cumulative total of Restricted Excess NO x Allowances available from each year and any prior year and the actual emissions reported under (b) and (c), above, for that year and any Restricted Excess NO x Allowances not subject to surrender repor ted under (d), above . No later than March 31, 2016, Defendants shall report: (a) the cumulative numb er of unused Restricted Excess NO x Allowances subject to surrender calculated pursua nt to Paragraphs 76 and 77, and (b) the total number of unused Restricted Excess NO x Allowances that they surrendered. b. No later than March 31, 2017, and c ontinuing annually thereafter, Defendants shall report: (a) the number of Restricted Excess NO x Allowances available in the prior year; (b) the actual emissions from any New and Newly Permitted Unit during such year; (c) the actual emissions from the five natu ral gas plants listed in Paragraph 76 during such year; (d) the amount, if any, of Restricted Excess NO x Allowances that are not subject to surrender for such year because of Defendants’ investment in renewable energy as defined in Paragraph 77 and the data supporting Defendants’ calculation; (e) the number of Restricted Excess NO x Allowances subject to surrender for such year calculated pursuant to Paragraphs 76 a nd 77; and (f) the to tal number of unused Restricted Excess NO x Allowances that they surrendered for such year.

2E. Reporting Requirements for Excess SO 2 Allowances Beginning on March 31, 2011, and conti nuing annually thereafter, Defendants shall report: (a) the number of Excess SO 2 Allowances subject to surrender calculated pursuant to Paragraph 93, and (b ) the total number of Excess SO 2 Allowances that they surrendered. F. Continuous Operation of Pollution Controls required by Paragraphs 68, 69, 87, and 102 On March 31 of the year following De fendants’ obligation pursuant to this Consent Decree to commence Continuous Op eration of an SCR, FGD, ESP, or Additional NO x Pollution Controls, Defendants shall re port the date that they commenced Continuous Operation of each such pollution c ontrol as required by this Consent Decree. Beginning on March 31, 2008, and continuing annually thereafter, Defendants shall report, for any SCR, FGD, ESP, or Additional NO x Pollution Controls required to Continuously Operate during that year, the duration of any period during which that pollution control did not Continuously Operat e, including the specific dates and times that such pollution control did not oper ate, the reason why Defendants did not Continuously Operate such pollu tion control, and the measures taken to reduce emissions of the pollutant controlled by such pollution control. G. Installation of SO 2 and NO x Pollution Controls Beginning on March 31, 2008, and conti nuing annually thereafter, Defendants shall report on the progre ss of construction of NO x and SO 2 pollution controls required by this Consent Decree including: (1) if construction is not underway, any available information concerning the construction sche dule, including the dates of any major contracts executed during the prior calendar year, and any major components delivered during the prior calendar year ; (2) if construction is underw ay, the estimated percent of installation as of the end of the prior cale ndar year, the current estimated construction completion date, and a brief description of completion of significant milestones during the prior calendar year, including a narrative desc ription of the curren t construction status ( e.g . foundations completed, absorber installati on proceeding all material on-site, new stack erection completed, etc.); and (3) on ce construction is complete, the dates the equipment was placed in service and any acceptance testing was performed during the prior calendar year. H. Installation and Operation of PM CEMS Beginning on March 31, 2013, for Cardin al Units 1 and 2 and a third Unit identified pursuant to Paragr aph 110, and continuing annually th ereafter for all periods of operation of PM CEMS as required by this Consent Decree, Defendants shall report the data recorded by the PM CEMS, expresse d in lb/mmBTU on a 3- hour rolling average basis in electronic format for the prior cale ndar year, in accordance with Paragraph 107.

3I. Other SO 2 Measures Commencing in the first annual report Defendants submit pursuant to Paragraph 143, and continuing annually th ereafter, Defendants shall su bmit all data necessary to determine Defendants’ compliance with the annu al average coal content specified in the table in Paragraph 90. J. 1-Hour Average NO x Emission Rate and 30-Da y Rolling Average Emission Rates for SO 2 and NO x 1. Beginning on March 31 of the year fo llowing Defendants’ obligation pursuant to this Consent Decree to first comply with an applicable 1-Hour Average NO x Emission Rate and/or 30-Day Rolling Average Emission Rate for SO 2 and NO x , and continuing annually thereafter, Defendants shall report all 1-Hour Average Emission Rate results and/or 30-Day Rolling Average Em ission Rate results to determine compliance with such emission rate, as defined in Paragraph 4 or 5, as appropriate. Defendants shall also report: (a) the date and time that the Unit in itially combusts any fu el after shutdown; (b) the date and time after startup that the Un it is synchronized with a utility electric distribution system; (c) the date and time that the fire is extinguished in a Unit; and (d) for the fifth and subsequent Cold Start Up Pe riod that occurs with in any 30-Day period, the earlier of the date and time that is eith er (i) eight hours after the unit is synchronized with a utility electric distribution system, or (ii) the flue gas has reached the SCR operational temperature range specif ied by the catalyst manufacturer. 2. Within the first report that identifies a 1-Hour Average NO x Emission Rate or 30-Day Rolling Average Emission Rate for SO 2 or NO x , Defendants shall include at least five (5) example calculations (including hourly CEMS data in electronic format for the calculation) used to determine the 1-Hour Average NO x Emission Rate and the 30-Day Rolling Average Emission Rate for SO 2 or NO x for five (5) randomly selected days. If at any time Defendants change the methodology us ed in determining the 1-Hour Average NO x Emission Rate or the 30-Day Rolling Average Emission Rate for SO 2 or NO x , Defendants shall explain the change a nd the reason for using the new methodology. K. 30-Day Rolling Average Removal Efficiency for SO 2 1. Beginning on March 31 of the year fo llowing Defendants’ obligation pursuant to this Consent Decree to first comply with a 30-Day Rolling Average Removal Efficiency, and continuing annually thereafte r, Defendants shall report all 30-Day Rolling Average Removal Efficiency results to determine compliance with such removal efficiency as defined in Paragraph 6 or, fo r Conesville Units 5 and 6, as specified in Appendix C. 2. Within the first report that identifies a 30-Day Rolling Average Removal Efficiency for SO 2 , Defendants shall include at leas t five (5) example calculations (including hourly CEMS data in electronic format for the calculation) used to determine the 30-Day Rolling Average Removal Efficiency for five (5) randomly selected days. If

4at any time Defendants change the methodol ogy used in determining the 30-Day Rolling Average Removal Efficiency, Defendants sha ll explain the change and the reason for using the new methodology. L. PM Emission Rates Beginning on March 31, 2010, for Cardin al Units 1 and 2, and beginning on March 31, 2013 for Muskingum River Unit 5, and continuing a nnually thereafter, Defendants shall report the PM Emission Rate as defined in Paragraph 51, for Cardinal Unit 1, Cardinal Unit 2, and Muskingum River Unit 5. For all such Units, Defendants shall attach a copy of the executive summary and results of any stack test performed during the calendar year cove red by the annual report. M. Environmental Mitigation Projects 1. Mitigation Projects to be Conducted by the States Defendants shall report the disbursement of funds as required in Paragraph 127 of the Consent Decree in the next annual progress report that Defendants submit pursuant to Paragraph 143 following such disbursement of funds. 2. Appendix A Projects Beginning March 31, 2008, and continuing on March 31 of each year thereafter until completion of each Project (including any applicable periods of demonstration or testing), Defendants shall provide the United St ates and Citizen Plaintiffs with written reports detailing the progress of each Project, including Project Dollars. N. Other Unit becoming an Improved Unit If Defendants decide to make an Othe r Unit an Improved Unit, Defendants shall so state in the next annual progress report they submit pursuant to Paragraph 143 after making such decision, and comply with the re porting requirements specified in Section I.G of this Appendix and any other reporti ng or notice requirements in accordance with the Consent Decree. II. Deviation Reports Beginning March 31, 2008, and continuing an nually thereafter, Defendants shall report a summary of all deviations from th e requirements of the Consent Decree that occurred during the prior calendar year, identifying the date and tim e that the deviation occurred, the date and time the deviation was corrected, the cause and any corrective actions taken for each deviation, if necessary, an d the date that the deviation was initially reported under Paragraph 145. In addition to any express requirements in Section I, above, or in the Consent Decree, such deviat ions required to be re ported include, but are not limited to, the following requirements: the 1-Hour Average NO x Emission Rate, the

530-Day Rolling Average Emission Rates for SO 2 and NO x , the 30-Day Rolling Average Removal Efficiency for SO 2 , and the PM Emission Rate. III. Submissions Pending Review In each annual report Defendants submit pursuant to Paragraph 143, Defendants shall include a list of all plans or submissi ons made pursuant to this Consent Decree during the calendar year covered by the a nnual report, the date (s) such plans or submissions were submitted to one or more Plaintiffs for review and/or approval, and shall identify which, if any, are still pendi ng review and approval by Plaintiffs upon the date of submission of the annual report. IV. Other Information Necessary To Determine Compliance To the extent that information not expressly identified above is necessary to determine Defendants’ compliance with the re quirements of this Consent Decree during a reporting period, and has not otherwise been submitted in accordance with the provisions of the Consent Decree, Defendants shall provide such information as part of the annual report required pursuan t to Section XI of the Consent Decree.

6APPENDIX C MONITORING STRATEGY AND CALCULATION OF THE 30-DAY ROLLING AVERAGE REMOVAL EFFICIENCY FOR CONESVILLE UNITS 5 AND 6 I. Monitoring Strategy 1. The SO 2 monitoring system for Conesville Units 5 & 6 will consist of two separate FGD inlet monitors in each of the two FGD inlet ducts for each Unit, and one FGD outlet monitor in the combin ed flow from the outlets of the FGD modules for each Unit, prior to the common stack. 2. Due to space constraints and potential interferences, monitors are currently located in the inlet duct for one FGD module on each Unit and at the combined outlet from both FGD modules for each Unit prior to entering the stack using best engineering judgment. 3. On or before December 31, 2008, Defendants shall submit a monitoring plan to EPA for approval that will propose wher e to site and install an additional inlet monitor in each of the unmonitored FGD inlet ducts for each Unit, and include a requirement that Defendant s submit a complete certification application for the Conesville Units 5 & 6 monitoring system to EPA and the state permitting authority. 4. The Monitoring Plan will incorporate th e applicable procedures and quality assurance testing found in 40 C.F.R. Part 75, subject to the following:

a. The PS-2 siting criteria will not be applied to these monitoring systems; however, the majority of the procedures in Section 8.1.3.2 of PS-2 will be followed. Sampling of at least nine (9) sampling points selected in accordance with PS-1 will be performed pr ior to the initial RATA. If the resultant SO 2 emission rates for any single sampling point calculated in accordance with Equation 19.7 are all wi thin 10% or 0.02 lb/mmBtu of the mean of all nine (9) sampling points, the alternative traverse point locations (0.4, 1.2, and 2.0 meters from the duct wall) will be representative and may be used for all subsequent RATAs. b. The required relative accur acy test audit will be performed in accordance with the procedures of 40 C.F.R. Pa rt 75, except that th e calculations will be performed on an SO 2 emission rate basis ( i.e. , lb/mmBtu).

c. The criteria for passing the relative a ccuracy test audit will be the same criteria that 40 C.F.R. Part 75 require s for relative accuracy or alternative performance specification as provided for NO x emission rates.

1d. “Diluent capping” ( i.e. , 5% CO 2 ) will be applied to the SO 2 emission rate for any hours where the measured CO 2 concentration rounds to zero.

e. Results of quality assura nce testing, data gathered by the inlet and outlet monitoring systems, and the resultant 30-day Rolling Average Removal Efficiencies for these monitoring syst ems are not required to be reported in the quarterly reports submitted to EPA’s Clean Air Markets Division for purposes of 40 C.F.R. Part 75. Results will be maintained at the facility and available for inspec tion, and the 30-day Rolling Average Removal Efficiency will be reported in accordance with the requirements of the Consent Decree and Appendix B. Equivalent data retention and reporting requirements will be incorporat ed into the applicable permits for these Units. f. Missing Data Substitution of 40 C.F.R Part 75 will not be implemented. g. Initial performance testing will be performed before the effective date of the 30-Day Rolling Average Removal E fficiency requirements, and the results will be reported to Plaintiffs as part of the annual report submitted in accordance with Appendix B. II. Calculation of 30-Day Rolling Average Removal Efficiency 1. Removal efficiency shall be calculated by the equation: [SO 2 emission rate Inlet – SO 2 emission rate Outlet ] / SO 2 emission rate Inlet * 100 2. Inlet and outlet emission rates shal l be calculated using the methodology specified in 40 C.F.R. Part 60 A ppendix B – Method 19. Inlet emission rates will be based on the average of the valid reco rded values calculated for each of the inlet FGD monitors at each Unit. Measurements are made on a wet basis, so Equation 19.7 will be utilized to determine the hourly SO 2 emission rate at each location. To make the conversion between the measured wet SO 2 and CO 2 concentrations and an emission rate in pounds per million BTU, an electronic Data System will perform Equation 19.7 using the SO 2 ppm conversion factor from Table 19-1 of Method 19 and the Fc factor for the applicable fuel (currently bituminous coal) in Table 19-2 of Method 19. The resulting equation will be: Emission rate (lb SO 2 /mmBtu) = 1.660 x 10 -7 * SO 2 (in ppm) * Fc * 100 / CO 2 (in %) 3. The electronic data system w ill calculate the hourly average SO 2 and CO 2 concentration in accordance with 40 C.F.R. Part 75 quality control/quality assurance requirements and will compute and retain these SO 2 emission rates for every operating hour mee ting the minimum data capture requirements in accordance with 40 C.F.R. Part 75. Prior to the

2calculation of the SO 2 emission rate, hourly SO 2 and CO 2 concentrations will be rounded to the nearest tenth ( i.e. , 0.1 ppm or 0.1 % CO 2 ) and the resulting SO 2 emission rate will be rounded to the nearest thousandth ( i.e. , 0.001 lb/mmBtu). 4. From these hourly SO 2 emission rates, SO 2 removal efficiencies will be calculated for each hour when the Unit is firing fossil fuel, and the hourly SO 2 and CO 2 monitors meet the QA/QC requi rements of Part 75. Hourly SO 2 removal efficiencies will be computed by taking the hourly inlet SO 2 emission rate minus the outlet SO 2 emission rate, dividing the result by inlet SO 2 emission rate and multiplying by 100. The resulting removal efficiency will be rounded to the nearest tenth ( i.e. , 95.1%). Daily SO 2 removal efficiencies will be calcula ted by taking the sum of Hourly SO 2 removal efficiencies and dividing by the number of valid monitored hours for each Operating Day. The resulti ng daily removal efficiencies will be rounded to the nearest tenth ( i.e. , 95.1%). 5. The 30-Day Rolling Average Removal Efficiency will be computed by taking the current Operating Day’s daily SO 2 removal efficiency (as described in Paragraph 4 of this Appendix C) plus the previous 29 Operating Days’ daily SO 2 removal efficiency, and dividing the sum by 30. In the event that a daily SO 2 removal efficiency is not available for an Operating Day, Defendants shall excl ude that Operating Day from the calculation of the 30-Day Rolling Av erage Removal Efficiency. The resulting 30-day Rolling Average Rem oval Efficiency will be rounded to the nearest tenth of a percent ( i.e. , a value of 95.04% rounds down to 95.0%, and a value of 95.05% rounds up to 95.1%).

3UNITED S TATES DISTRICT C O URT EASTE R N DISTRICT OF VIR G INIA

_____________________________ ) UNITED S TATES OF AMERICA, ) STATE OF NEW YORK, ) STATE OF NEW JERSEY, ) STATE O F CO N NEC T I CUT , ) COMMON W EALTH OF VIRGINIA) STATE OF W E ST VI R GIN IA ) Plaintiffs,

v. VIRGINIA ELECTRIC AND POWER COMPANY, Defendant. ) ) ) ) ) ) ) ) ) CIVIL ACTION NO.

______________________________) CONSENT DECREE WHEREAS Plaintiff, the United States of Am er ica (“the United States”), on behalf of the United States Environm ental Protection Agency (“EPA”), has f iled a Complain t alleging that Defendant, Virginia Electric and Power Com p a ny (“VEPCO”), comm e nced construction of

m ajor m odifications of m ajor em itting f acilities in violation of the Preve n tion of Sig n if icant Deterioration (“PSD”) requirem e nt s at Part C of the Clean Air Act (“Act”), 42 U.S.C. §§ 7470- 7492; WHE R EAS on April 24, 2000, EPA issued a Notice of Violation (“NOV”) to VEPCO with respe ct to cer tain a lleged violations of PSD; WHE R EAS Plaintiff, the Stat e of New York, f iled a com p laint again st V E PCO on July

120, 2000, alleging violations of the Act at VEPC O’s Mount Storm Power Station located in northeas te rn W est Virginia; WHE R EAS Plaintiff, the Stat e of Connecticut, has issued VE PCO a notice of intent to sue, alleging violations of the Act an d also has filed a com p laint alleging violations of the Act at certain VEPCO electric generating u n its; WHEREAS Plaintiff, the State of New Jersey, has issued to VEPCO a notice of in te nt to sue, alleging violations of the Act an d also f iled a com p laint alleg i ng vio l at ions of the Act at certain VEPCO electric generating u n its; WHEREAS Plaintiff the Commonw ealth of Virginia is f i ling a Motion f or

Leave to Intervene and Com plaint in Intervention alleging that VEPCO m a y have violated Virginia’s air pollution regulations found at 9 VAC 50-80-1700, et seq. , “P erm its f o r Major Station a ry Sources and Major Modifications Locating in Prevention of Significant Dete rioration Areas,” at one or more of its coal-fired generating units located in Virginia and that such violations m a y recur or other sim ilar violations m a y occur in the future;; W H EREAS the Par ties c onsent to interv ention by the Commonwealth of Virginia; WHEREAS Plaintiff the Commonwe a lth of Virginia has a s i g n if icant inte rest in th is litigation by reason of its aforesaid C o m p laint as well as by reason of: (1) the fact th at a significant portion of the relief provided by this Decree will involve fac ilities located within Virginia and regulated by the Commonwealth and no ot her S t ate, and (2) the f act th at such relief will directly im pact the is suance to th e affected faci lities of perm its under the Comm onwealth’s program approved pursuant to Title V of the Clean Air Act;

2WHEREAS, Section 10.1-1186.4 of the Code of Virginia specifically authorizes the Attorney Ge neral of Vir g inia to seek to interv ene in pending f e deral enforcem ent actions such as this one brought by the United States th rough the Environmental P r otection Agency. WHEREAS Plaintiff the State of W e st Virgin ia is filing a Motion for Leave to Intervene and Com p laint in Inte rv ention a lleg i ng that VE PCO m a y have violated West Virginia’s air pollution regulations found at 45CAR14, “Perm i ts for Construction and Major Modification of Major Stationary Sources of Air Pollution for the Prevention of Si gnificant Deterioration,” at one

or m ore of its coal-fired genera ting u n its lo cated in W est Virginia and that such violations m a y

recur o r othe r sim ilar vio l ati ons m ay occur in the f u ture; W H EREAS the Par ties c onsent to intervention by the Sta t e of W est Virgin ia; WHEREAS Plaintiff the State of W e s t Virginia has a significant interes t in this litigatio n by reason of its aforesaid Com plaint as well as by reason of: (1) the fact that a significant portion of

the relief provided by this Decr ee will invo lv e f acilities loc ated with in W est Virgin ia and regulated by the State of West Virginia and no othe r State, an d (2) the fact that such relief will directly im pact the issu ance to the affected facilities of pe rm its under the West Virginia program approved pursuant to Title V of the Clean Air Act; WHEREAS, Section 22-1-6 (d)(3) of the W e st Virginia Code specifically authorizes the Secretary of the W e st Virginia De partm ent of Environm en ta l Protec tion to enforce th e statutes o r rules which the Department is charged with enforcing. WHEREAS VEPCO, a large electric util ity, responded in a c onstructive way to Plaintiffs’ notices of intent to sue and the NOV and expended significant tim e and effo rt to develop and agree to the term s of settle m ent em bodied in this Decree;

3W H EREAS VEPCO asserts that installa ti on and operation of the pollution controls required by this Decree will result in em ission reductions b e y ond curren t regulatory requirem ents; WHEREAS the steam electric generating units at VEPCO’s Mount Storm Power Station qualified for alternative em ission lim itations under 40 CFR Section 76.10 because V E PCO dem onstrated under the applicable standard that they were not capable of m eeting the em issions lim itations otherwise applicable under the Clean Air Act’s A c id Rain Nitrogen Oxides Em ission Reduction P r ogram ; WHEREAS Plaintiffs and VE PCO disagree fundam e ntally over the nature and scope of modifications that m a y be m a de to steam elect ric genera ting u n its witho u t im plicating the New Source Review requirements (including PSD) under the Act a nd its regulations; WHEREAS nothing in this Decree resolves or is intended to resolve those disagreem e nts; WHEREAS VEPCO has advised the United Sta t e s and the Pla i ntif f States that VEPCO has ente red into this Con sent Decr ee in re lianc e o n the expec t ation that E P A will continue to enforce the modification provisions of the Act’ s New Source Review program in substantially the sam e m a nner as se t f o rth in the c o m p laints f i led here in; WHEREAS VEPCO has been advised that the Un ited States reta ins a ll of its discr etio n concerning whether and how to enforce the Clea n Air Act against any person, nothing in this Consent Decree is in ten d ed to pred ict or im pos e enforcem ent activities o n EPA or the United States, and that the obligations of VEPCO under this Consent Decree are not conditional on subsequent enforcem ent activit ies of the Federal governm ent;

4WHEREAS the Plaintiffs alle ge that their Com pl a ints st ate claim s upon which the relief can be granted against VEPCO under Sections 113, 167, or 304 of the Act, 42 U.S.C. §§ 7413, 7477, or 7604; WHEREAS VEPCO has not answered any of th e Com p laints in ligh t of th e settlem ent

m e morializ e d in this De c r ee; WHEREAS VEPCO has denied and continues to deny the violations alleged in the N OV and the Complain ts; m aintains that it has been an d rem a ins in com p liance wit h the Act and is not liab l e f o r civ il pena lties o r injun ctiv e relief ; a nd states that it is agre eing to the obligations im p osed by this Decr ee solely to avo i d the co st s and uncer tainties of litig ation and to im prove the environ m ent; W H EREAS VEPCO intends to com p ly with any applic able F e dera l or Sta t e Im plem entation Plans th at resu lt f r o m the NO x SIP Call (63 Fed. Reg. 57356 (1998)) separate and apart from the obligations im posed by this De cree, and su ch Federa l o r State Im plem entation Pla ns that may ultim a tely result from the NO x SIP Call are not intended to be enforceable under this Decree, and instead are enforceable in accordance with their own term s and the laws pertaining to them ; W H EREAS the Pla i ntif f

s and V EPCO agree tha t settlem e nt of these actio ns is fair, reasonable, and in the best inte r est of the Pa rties and th e public, and that entry of this Consent Decree without further liti gation is the most appropriate m eans of resolving this m atter; WHEREAS the Plaintiffs and VEPCO have consented to entr y of this Decree without the trial or o t her litigation of any allegation in the co mplaints ; NOW THEREFORE, without any adm i ssion of fact or law, and without any adm i ssion of

5the violations alleged in the Co m plaints or NOV, it is hereby OR DE RED, ADJUDGE D, AND DECREED as f o llows:

I. JURISDICTION AND VENUE 1. Solely for purposes of entry and enf orcem en t of this Decr ee, the par tie s a g ree th at th is Court has jurisdiction over the subject m a tter herein and over the Parties consenting hereto pursuant to 28 U.S.C. §§ 1331, 1345, 1355, and 1367 and pursuant to Sections 113 and 167 of the Act, 42 U.S.C. §§ 7413 and 7477, and also pursua nt to 42 U.S.C. §7604(a). 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). VEPCO consents to and shall no t cha llenge entr y of this Consent Decr ee or this Court’s jurisd ic tion to enter and enf o rce this Consent D ecree. Except as expressly provided for herein, this Consen t Decree shall not create any rights in any party other th an the Plaintiffs and VEPCO. VEPCO consents to entry of this Decree without further notice.

II. APPLICABILITY 2. Scope . The provisions of this Consent Decr ee shall apply to and be binding upon –

c onsistent w ith Sec tion XXVIII (“Sale or T r ansfer s of Ownership In teres t s”) – th e Plaintiffs and VEPCO, including VEPCO’s officers, em ployees, and ag ents solely in th eir c a pacitie s as such. Unless otherwise specified, each req u irem ent on VEPCO under th is Consent Decree s h all becom e effective thirty d ays after en try of this Decree. 3. Notice to th ose Perf orming Decree-Mandated Work

. VEPCO shall provide a copy of this

6Decree to all vendors, suppliers , consultants, or contractors perform i ng any of the work described in Sections IV through IX. Notw ithstanding any retention of contractors, subcontractors or agents to perform any work required under this Consent Decree, VEPCO shall be responsib le for ensuring that all w ork is pe rform e d in accordance with the re qu irem ents of this Consen t Decree. In any action to enforce th is Consent Decree, VEP C O shall not assert as a defense the failure of its em ployees, servants, agen ts, or contractors to take actions necessary to

com ply with this Decree, unless VEPCO establishes that such failu re is delayed or excused under Section XXVI (“Force Majeure”)

.

III. DEFINITIONS 4. Every term expressly defined by this Sec tion shall have the mean ing given that term herein. Every other term used in this Decree th at is also a term us ed under the Act or the regula tions implem enting the Act sh all m ean in th is Decree what such term s m ean under the Act or those regulations. 5. “30-Day Rolling Average Em ission Rate” for a Unit m eans and is calculated by (A) summing the total poun ds of the pollutan t in que stion em itted from the Unit during an Operatin g Day and the previous twenty-nine (2 9) Operating Days; (B) s u mm ing the tota l heat in put to th e Unit in mmBTU during the Operating Day and duri ng the previous twenty-nine (29) Operating Days; and (C) dividing the total number of pounds of pollutan t s em itted d u ring th e thirty (30 ) Operating D a ys by the total heat inpu t during the thir ty (30 ) Op erating Days, and converting the resulting value to lbs/mmBTU. A new 30-Day Rolling Average Em ission Rate shall be calcu lated f o r each new Operating D a y. In ca lcu l ating all 30-Day Rolling Average E m ission

7Rates VEPC O : A. shall include all em issions and B T Us co mm e n cing from t h e tim e the Unit i s synchronized with a utility electric distribution system through the tim e that the Unit ceases to com bust fossil f u el and the f i re is ou t in the boiler, except as provided by Subparagraph B, C, or D ; B. shall use the m e thodologies and proce dures set forth in 40 C.F.R. Par t 75; C. m a y exclude em issions of NOx a nd BTUs oc curring during the fifth and subsequent Cold Start Up Per i od(s) tha t o ccur in any 30-Day period if inclusion of such em issions would result in a violation of any applicable 30-Day Rolling Average Em issions Rate, and if VEPCO has insta lled, op erated and m a intained the SCR in question in accordance with m a nu fact urers’ specifications and good engineering practices. A “C old Start Up Period” o ccurs whenever there has been no fire in the boiler of a Unit (no com b ustion of any foss il fuel) for a period of six hours

or m o re. The em issions to be excluded during th e fifth and subsequent C old Start Up Period(s) shall b e the less of (1) th ose NOx emissions em itted during th e eight hou r period com m encing when the Unit is synchro n ized with a utility e l ectric distribution system an d concluding eight hours later o r (2) those em itted prior to the tim e that the flue gas has ach ieved the SC R operational tem p erature as specified by the catalyst m a nufacturer; and D. m a y exclude NOx e m issions and BTUs occurring during any period of m a lfunction (as defined at 40 C.F.R. 60.2) of the SCR. 6. “30-Day Rolling Average Rem oval Effici ency” m eans the percen t reduction in the S O 2 Em issions Rate achieved by a Unit’s FGD over a 30 Operating Day period, as further described by the te rm s of this Decr ee. 7. “Air Quality Control Region” m eans a geographic area designated under Section 107(c)

8of the Act, 42 U.S.C. § 7407(c). 8. “Boiler Island” m eans a Unit’s (A) f u el com bustion system (including bunker, coal pulverizers, crusher, stoker, a nd fuel burners); (B ) com bustion air system ; (C) steam generating system (firebox, boiler tubes, a nd walls); and (D) draft system (excluding the stack), all as further described in “Interpretation of Reconstr uction,” by John B. Rasnic U.S. EPA ( N ove m ber 25, 1986) and attachm e nts thereto. 9. “Capita l Expenditu res” m eans all ca pita l expenditures, as def i ned by Generally Accepted Accounting Principles (GAAP), as VEPC O applied GAAP to its Boiler Island expenditures for the calendar years 1995-2000. Excluded from “Capita l Expenditure” is the cost of installing or upgrading pollution control devices and the cost of altering or replacing any portion of the Boiler Island if such alteration or repl acem ent is required in acco rd ance with go od engineering practices
to accom p lis h the ins t allation or upg rading of a po llution control dev i ce t o m eet the requirem ents of this Decree. 10. “CEMS” or “Continuous Em ission Monito ring System ,” for obligations involving NO x and SO 2 under this Decree, shall m e a n “CEMS” as defined in 40 C.F.R. Section 72.2 and installed and m a intained as required by 40 C.F.R. Part 75. 11. “Clean Air Act” or “Act” m eans the Clean Air Act, 42 U.S.C. §§7401-7671q, and its im ple m enting reg ulations. 12. “Com pleted,” when used in connection with Sections XI thro ugh XVII (Resolution of Certain Civil Claim s) and with respect to a ch ange or m odification, m eans the tim e when the Unit subject to the change or m odification has been retu rned to service an d is capab le of generating electricity.

913. “Connecticut” m eans the State of Connecticut. 14. “Consent Decree” or “D ecree” m eans this Consent Decree and its A ppendices A through C, which are incorporated by reference ( Append ix A -- “Coal-Fired Stea m - Electric Generating Units Constituting the V E PCO Syste m ”; Append ix B -- “Consent Decree Reporting F orm ”; and Appendix C -- “Mitigation Projec ts th at Shall be Com p lete d Under this VEPCO Consent Decree”). 15. “Defendant” m eans Virginia El ectric and Power Com pany or VEPCO. 16. “Em i ssion Rate” m eans the num ber of pounds of pollutant em itted per m illion BTU of heat input (“lb/mmBTU” ) , m easured as required by this Consent Decree. 17. “EPA” m eans the United States Environm ental Protection A g ency. 18. “ESP” m eans electrostatic precipitator, a pollution cont rol device for the reduction of PM. 19. “FGD” m e a ns a pollution c ontrol device that em ploys flue gas desulfurization technology
to rem ove SO 2 from flue gas. 20. “Im proved Unit” m eans, in the case of NOx, a VEPCO Syste m Unit scheduled under this Decree to be equipped with SCR and, in the case of SO2, m eans a VEPCO System Unit scheduled u nder th is Decree to be eq uipped with an FGD, or Possum Point Units 3 and 4 becaus e of their conversion to natural ga s, as listed in Appendix A of this Decree and any am endm ent thereto. A Unit m a y be an Im proved Unit for one pollutant without bein g an Im proved Unit for the other. 21. “KW ” m eans a kilowatt, which is one t housand Watts or one thousandth of a m e gawatt (MW )

.
1022. “lb/mm BTU” m eans the num b er of pounds of pollutan t em itted per m illio n British Therm a l Units of heat input. 23. “MW ” m ea n s m egawatt or one m illion W atts. 24. “National Ambient Air Quality Stan da rds” m eans nation a l air quality s t andards prom ulgated pursuant to Section 109 of the Act, 42 U.S.C. § 7409. 25. “New York” m eans the S t ate of New York. 26. “New Jersey” m eans the State of New Jersey. 27. “NOV” m e a ns the Notice of Violation issued by EPA to VEPCO, dated April 24, 2000. 28. “NO x ” m eans oxides of nitrogen, as further described by the term s of this Decree. 29. “NSR” m e a ns New Source Review and refers generally to the Prevention of Significant Deterioration and Non-Attainm e nt provisions of Parts C and D of Subc hapter I of the Act. 30. “Operating Day” for a coal-fired Unit m eans any calendar day on which such a Unit burns fossil fuel. 31. “Other Unit” m eans any Unit of the VE PCO System that is not an Improved Unit for the pollutant in question. A Unit m a y be an Im prove d Unit for NOx and an Other Unit for SO2 and vice versa. 32. “Ozone Season” m eans the five-m onth pe riod from May 1 through Septem ber 30 of any year after 2004. For the year 2004, “Ozone Season” m eans the period from May 31, 2004, through Septem ber 30, 2004. 33. “Paragraph” m eans a provision of th is Decree preceded by an Arabic number. 34. “Parties” m eans VEPCO, the United Stat es, Virginia, W e st Virginia, New York, New Jersey, and Connecticut.

1135. “Plaintiffs” m eans the United States, New York, New Jersey, Connecticut, Virginia, and W e st Virgin ia. 36. “PM” m eans total particul ate m a tter as further described by the term s of this Decree. 37. “PM CEM” or “PM Continuous Em ission Monitor” m eans equipm ent t hat sam p les, analyses, m easures, and provides P M em issions data -- by readings taken at frequent intervals -- and m a kes an electronic or paper reco rd of the PM em issions m easured. 38. “Pollution Control Upgrade Analysis” m eans the technical study, analysis, review, and selection of control technology recommendations (including an em ission rate or rem oval efficiency) perform e d in connection with an appl ication f o r a f ederal PSD per m it, takin g into account the characteristics of the existing facility. Except as othe rwise provided in this Consent Decree, such study, analysis, review, and selectio n of recommendations shall be carried out in accordan ce with applicable federa l and state regu lations and g u idance des c ri b i ng the p r ocess and analysis for determ ining Best Av ailable Control Technol ogy (BACT), as that term is defined in 40 C.F.R. §52.21(b)(12 ) , includ ing, wit hout lim itation, the D ecem ber 1, 1987 EPA Mem o randum from J. Craig Potter, A ssistant Ad m i nistrator f o r Air and R adiation, regarding Im proving New Source Review (NSR) Im ple m enta tion. Nothing in this Decree shall be construed either to: (A) alter the force and effect of statem ents known as or characterized as “guidance” or (B) perm it the process or result of a “Pollution Control U pgrade Analysis” to be considered BACT for any purpose under the A c t. 39. “ppm ” m eans parts p er m illion by dry volum e, corrected to 1 5 percen t O 2 . 40. “Project Dollars” m eans VEPCO’s prope rly docum ented internal and external costs incurr ed in c arrying ou t the dolla r- lim ited pr ojec ts iden tif ied in Section XXI (“Mitiga t ion

12Projects”) and Appendix C, as determ ined in accordance with Generally Accepted A ccounting Princip l es (GAAP) (subject to re view by the Plaintiffs), and pr ovided that such costs com ply with the Project Dollars and othe r requirem e nts for such expenditures and paym ents set forth in Section XXI (“Mitiga tio n Pr ojects”) and Appendix C. 41. “PSD” m e a ns Prevention of Significant De terioration, as that term is understood under Part C of Subchapter I of the Clean A i r Ac t, 42 U.S.C. §§ 7470 - 7492 and 40 C.F.R. Part 52. 42. “PSD Increm ent” m eans the m axi mum allo wable increase in a pollu tant’s concentration over the baseline concentration w ithin the m eaning of Section 163 of the Act, 42 U.S.C. § 7473 and 40 C.F.R. § 51.166(c). 43. “SCR” m e a ns a pollution c ontrol device that em ploys sel ective catalytic reduction to

rem ove NO x from flue gas. 44. “Seasonal S y stem

- W ide Em ission Rate” for a pollutant m eans the total pounds of the pollutant em itted by the VEPCO Sys t em during the period from May 1 through Septem ber 30 of each calend ar year, divided by the total heat in p u t (in mm BTU) to the VEPCO System during the period from May 1 through Septem ber 30 of the sa m e calendar year. VEPCO shall calculate the Seasonal System

- W ide Em ission Rates from hourl y CEMS data collected and analyzed in

com pliance with the 40 C.F.R. Part 75. 45. “Section” means paragraphs of this Decr ee collected under a capital ized heading that is preceded by a Rom an Num eral. 46. “SO 2 " m eans sulfur dioxide, as described furthe r by the te rm s of this Decree. 47. “SO 2 Allowance” m eans the sam e as the definitio n of “allowance” found at 42 U.S.C. Section 7651a(3): “an authorizati on, allocated to an affected un it, by the Adm i nistrator [of EPA]

13under [Subchapter IV of the Act] to em it, during or after a specified cale ndar year, one ton of sulfur dioxide.” 48. “Subparagraph” m eans any subdivision of a Pa ragraph identified by any num ber or letter. 49. “System

- W i de Annual Em ission Rate” for a pol lutant shall m ean the total pounds of the pollutant em itted by the VEPCO Sys t em during a cal endar year, divided by the to tal h eat inpu t (in mmBTU) to the VEPCO Syste m during the sam e calendar year. VEPCO shall calculate and analyze the System

- W ide Annual Em ission Rates fr om hour ly CEM data colle cted in com pliance with 40 C.F.R. Part 75. 50. “Title V Perm it” m eans each perm it required und er Subchapter V of the Clean Air Act, 42 U.S.C. § 7661, et seq . , for each electric generating p l ant th at includes one or m o re Units that are part of the VEPCO System

. 51. “VEPCO System ” m eans all the Units listed here and desc ribed further in Appendix A: Brem o Power Station U nits 3 and 4 (in Fluvanna County, Virginia); Chesapea ke Energy Center Units 1, 2, 3, and 4 (near Chesapeake, Virginia); Chesterf ie ld Power St ation Units 3, 4, 5, and 6 (in Chesterfield County, Virginia); C l over Po wer Station Units 1 and 2 (in Halifax County, Virginia); Mount Storm Power St ation Units 1, 2, and 3 (in northeas tern W e st Virginia); North Branch Power Station U nits 1A and 1B (in nor th easte rn W est Virgin ia) ; Possum Point Power Station Units 3 and 4 (in Northern Virginia, about twenty-five m iles south of W a shington, D.C.); and Yorktown Power Station Units 1 and 2 (in Yorktown, Virginia). 52. “Virginia” m eans the Co mm onwealth of Virginia. 53. “ W att” m eans a unit of power equal to one joule per second. 54. “ W est Virginia” m eans the State of West Virginia.

1455. “Unit” m eans a generator, the steam turbin e that drives the generator, the boiler that produces th e steam for the steam turb ine, the e quipm ent neces sary to operate th e generator, turbin e and boile r, and a ll anc i ll ary equipm ent, including polluti on control equipm ent or system s necessary for the produ ction of electricity.

IV. NO x E M ISSION R EDUC TI ONS AND CONTROLS 56. Unit-Specific SCR Installati ons and Perform a nce Requirem e nts

. VEPCO shall ins t a ll an SCR on each Unit lis ted below, no later than th e date specified below an d, com mencing on tha t date and con tinuing there a fter, operate each SCR to m eet a 30-Day Rollin g Average E m ission Rate for NO x of 0.100 lb/mmBTU for each listed Unit, excep t that VEPCO shall m e et a 30-Day Rolling Average Em issions Rate of 0.110 lb/ mmBTU for Mount Storm Units 1, 2 and 3:

15Units on Which VEPCO Shall Inst all an SCR ich VEPCO Must: tion of Fully R, and (B) Start eration that Meets 3 0-Day Rolling Average NO x Emission Rate Latest Date by w h (A) Comple te Insta lla O perational SC Op
Mount Storm Unit 1 uary 1, 2008 Jan
Mount Storm Unit 2 January 1, 2008
Mount Storm Unit 3 January 1, 2008
Chesterfield Unit 4 January 1, 2013
Chesterfield Unit 5 January 1, 2012
Chesterfield Unit 6 January 1, 2011 Chesapeake Energy Center Unit 3 January 1, 2013 Chesapeake Energy Center Unit 4 January 1, 2013

57. VEPCO also shall use best efforts to operate each SCR required under this Decree whenever VEPCO operates th e Unit served by th e SCR, in accordance with m a nufact u rers ’ specifications, good engineering practices, and VE PCO’s operational and m a in tenance needs. 58. Year-Round Operation of SCRs . Be ginning on January 1, 2008, and continuing thereafter, in accordan ce with the SC R installati o n schedule p r ovided for in Paragraph 56 (Unit specific SC R Installatio n and Perform a nce Requir em ents), every VEPCO System Unit served b y an SCR required pursuant to Paragraph 56 shall operate year-round and achieve and m a intain a NO x 30-Day Rolling Average Em ission Rate of no m ore than 0.100 lb/mmBTU, except that 16Mount Storm Units 1, 2 and 3 shall achieve a NOx 30-Day Rolling Average Em ission Rate of no

mo re than 0.110 lb/mmBTU. 59. VEPCO Sys t em : Interim Control of NO x Em issi o ns: 2004 through 2007

. Comm enci ng in 2004 and ending on Decem ber 31, 2007, VEPCO shall co ntrol NO x em issions under the provisions of either Subparagraph (A) or (B) of this Paragraph. VEPCO m a y elect to com ply with either S ubparagraph in any calendar year an d m a y change its election from year to year. VEPCO shall notify the Parties in writing on o r b e fore January 1 of each calendar year of whether it elects to com p ly with Subparagraph (A ) or Subparagraph (B) for that year. If VEPCO fails to provide such notice by January 1 of any y ear, th e las t elected opti on for the prior calendar year shall be deem ed to apply, and, if none, Subpa ragraph (B) shall be deem ed to apply for such year. The requirem e nts of this Paragraph shall term inate on Decem ber 31, 2007: (A) During the f o llowing th r ee tim e peri ods, VEPCO shall control em issions of NO x by operating SCRs on VEPCO Syste m Units of at lea st th e mega-wat tage capacitie s specified an d sha ll achieve a 30-Day Rolli ng Average Em ission Rate for NOx of no greater t h an 0.100 lb/mmBTU at each such Un it, except th at Mount Storm Units 1, 2 an d 3 shall achieve a NOx 30-Day Rollin g Average E m ission Rate of no m ore than 0.110 lb/mmBTU, as f ollows: ( i) May 31, 2004, through April 30, 2005: Operate SCR on combined capacity of at least 375 M W on any com bination of VEPCO System Units, but at least one Unit so controlled sh all be at the Ches terfield Station. (ii) May 1, 2005, through April 30, 2006 : Operate SCR on com bined capacity of at least 875 M W on any com bina tion of VEPCO Syste m Units, but at 17least one-half of the 875 M W so controll ed shall be from a Unit or Units at the Chesterfield and/or Mt. Storm Stations.
( iii) May 1, 2006, through Decem ber 31, 2007: Operate SCR on com bined capacity of at least 1,450 M W on any com bination of VEPCO System Units, but at least one-half of the 1,450 M W so controlled shall be from a Unit or Units at th e Ches terf ie ld and/or Mt. Storm Stations; or (B) During the Ozone Seasons of the years 2004 through 2007, actual NO x em issions from the VEPCO System shall not exceed a Seasonal System W i de Em i ssion Rate greater than 0.150 lb/mmBTU. VE PCO’s com p liance with this lim it shall be achieved, in part, by operating an SC R at the Mt. Storm and Chesterfield S t ations. 60. VEPCO Sys t em NO x Lim its 2003 and thereafter: D eclining, System

- W ide Tonnage Caps

. Actual, total em issions of NO x from the VEPCO System in each calendar year, beginn ing in 2003 and continuing thereafter, shall not exceed the num be r of tons specified below :

18Calendar Year rmissible NO x Emissions (in Tons) from VEPCO System Total Pe

2003 2004 95,000 2005 90,000 2006 83,000 2007 81,000 2008 63,000 2009 63,000 2010 63,000 2011 54,000 2012 50,000 2013 and each 30,250 year th ereafter 104,000

61. VEPCO Sys t em - W ide, Annual Average NO x Em ission Rate

. Comm encing January 1, 2013, and continuing thereafter, actual NO x em i ssions from the VEPCO System shall not exceed

a System

- W ide Annual Average Em ission Rate of 0.150 lb/mmBTU

. 62. NOx Measurem ent and Calcula tion Procedures and Methods

. In determining em ission rates for NO x , VEPCO s hall use those appl icable monitoring or refere nce m e thods specified in 40 C.F.R. Part 75. 63. Evaluation of NOx Em is sion Lim ita tions Based Upon Perform a nce Testing

. At any tim e after Septem ber 30, 2004, VEPCO may subm it to the Plaintiffs a proposed revision to the applicable 3 0 -Day Rolling Average Em issions Rate for NOx on any VEPCO Syste m Unit 19equipped with SCR and subject to a 30-Day Roll ing Average Em ission Rate. To m a ke a successful petition, VEPCO m ust de monstrate that it cannot cons istently achieve the Decreem a ndated NOx e m issions rate for the Unit in que stion, considering all relevant information, including but not lim ited to the past perform a nce of the SCR, reasonab l e m ea sures to achieve the designed level of perform a nce of the SCR in que stion, the perform a nce of other NOx controls installed at the unit, and the operational histor y o f the Unit. VEPCO shall in clude in such proposal an alternative 30-Day Rolling Average Em issions Rate. VEPCO also shall retain a qualified contractor to assist in the perform a nce and com pletion of the pe tition f o r an alte rnate 30-Day Rolling Average Em issions Rate for NO x. VEPCO shall d eliv er wit h each s ubm ission all pertinent docum ents and data that support or w e re considered in preparing such subm ission. If the Plaintiffs disapprove the revised em ission rate, such disagreem ent is subject to S ection XXVII (“Dispute Resolution”). VEPCO shall ma ke any subm ission for any Unit under this Paragraph n o late r than f i f

t een m onths af ter th e c o m p liance d a te spe cif ied f

o r that unit in Pa r agraph 5 6 (“Unit-Sp ecific SCR Installa tions and Performance Require m e nts”).

V. SO 2 EM ISSION RE DUCTIONS AND CONTROLS 64. Installation and Construction of, and Im prove m e nts to, plus Re m oval Efficiencies Required on, FGDs Serving: Clover Units 1 and 2, Mount Storm Units 1, 2, and 3, and Chesterf ie ld Units 5 and 6

. VEPCO shall constru c t or im prov e -- as applicable -- FGDs for each Unit lis ted b elow, to m e et or ex ceed the Rem oval Efficiencies for SO 2 specified below , in accordan ce with the s c h e dules set o u t below. VE PCO shall operate each FGD so that each Unit shall contin uously m eet or exceed th e SO 2 rem o val efficiency specified fo r it, as a 30-Day

20Rolling Average Rem oval Efficiency, during th e tim e periods described (Phases I and II):

Plant Name an Unit Number d ratio se I a Efficiency re Du Pha Remov n of l Requi ment Minim a Average Remo Efficiency (%) Phase 30-D I um y Rolling val Dur Pha

em Efficiency q R Re ation of se II oval uirement Phase II Minimum 30-Day Rolling Average Removal Efficiency (%) Clover Unit 1 -Day Rolling ge / 2003 hereafter Meet 30 Avera 09/01 and t by 95.0 Sa m e as Phase I Sa m e as Phase I

Clover Unit 2 0-Day g age by / 2003 hereafter Meet 3 Rollin Aver 09/01 and t 95.0 Sa m e as Phase I Sa m e as Phase I

Mt. Storm Unit 1 eet 30-Day g verage by / 2003 hrough /31/04 M Rollin A 09/01 and t 12 93.0 Jan. 1, 2005, after and there 95.0

Mt. Storm U nit 2 0 olling age by / 2003 d through 12/31/04 Meet 3 R Aver 09/01 an -Day 93.0 . 05, and thereafter Jan 1, 20 95.0

Mt. Storm Unit 3 Meet 30-Day Rolling Average by 09/01/ 2003 and through 12/31/04 93.0 Jan. 1, 2005, and thereafter 95.0

21Chesterf ie ld Unit 5 , 2012, and thereafter Oct. 12 95.0 Sa m e as Phase I Sa m e a Phase I

Chesterf ie ld Unit 6 Jan. 1, 2010, and thereafter 95.0 Sa m e as Phase I Sa m e as Phase I

65. Chesterfield FGD Const r uction

. This Decree does not re quire VEPCO to begin: (A) physical construction on or be gin significant equipm ent procurem ent for the FGD for Ch e sterfield Unit 6 prior to July 1, 2008, or (B) physical co nstruction on or significant equipm ent procurem ent for the FGD for C h esterfield Unit 5 before January 1, 2010. 66. Option of Com p liance with an Em i ssion Rate after an FGD De m onstrates SO 2 30-Day Rolling Average Rem oval Efficiency of at least 95.0%

. Once a Unit ( a n d its FGD) listed in Paragraph 64 dem onstrates at least 9 5 percen t removal efficiency for SO 2 for at least 180 consecutive days of operation withou t FGD bypass as specified in Paragraph 67 (om itting days on which the Unit did not com bust fossil fuel) on a 30-Day Rolling Average basis, then VEPCO -- at its option and with written, prio r notice to th e Plain tif f

s -- sh all m eet the f o llowin g em ission rate for SO 2 r ather than the 30-Day R o lling Average Rem oval Efficiency specified in P a ragraph 64:

Eligible to Make 180-Day

Demonstration Plant and Unit Maximum SO 2 30-Day Rolling Average Emission Rate VEPCO shall m eet in Lieu of 95.0% , 30- Day Rolling Avera g e Removal Efficienc y Clover Unit 1 0.130 Clover Unit 2 0.130 Chesterfield Unit 5 0.130 Chesterfield Unit 6 0.130 22nit 1 Mount Storm U 0.150 Mount Storm Unit 2 0.150 Mount Storm Unit 3 0.150

67. Interim Mitigation of Mount Storm SO 2 Em issions W h ile FGDs are Im proved

. Notwithstanding the requirem ent to m eet a specific percent rem ova l or em ission rate at Mount Storm Units 1, 2, or 3, in lim ited circum stan ces, VEPCO may operate such Units without

m eeting required Rem o val Efficiencies or Em i ssion Rates in the case of FGD scrubber outages or downtim e of the FGD scrubber serving each su ch Unit, if such operatio n co m p lies with the following requirem e nts. For this Paragraph, F GD outage or downtim e “ day” shall consist of a 24-hour blo c k period co mmencing in the hour th e FGD ceases to operate, and continu i ng in

success i ve 2 4 -hour perio d s until the hour the FGD is placed back into op eratio n. Any period of less than 24 hours of FGD downti m e shall count as a full “day”. For the FGD serving Unit 3, because it h a s two separately op erating absorber vessels, ou tage or downtim e may be m easured in “1/2 day ” (12-hour) in crem ents – one for each absorber – b u t otherwise on the sam e basis as a “day” is counted for outage or downtim e on the FGDs serving Units 1 and 2. (A) In any calendar year from 2003 thr ough 2004 for Mount Storm Unit 3, and in any calendar year from 2003 through 2004 for Mount Storm Units 1 and 2, VEPCO m a y operate Mount Storm Units 1, 2, or 3 in th e case of outage or downtim e of t he FGD serving such Unit, if all of the following condi tions are satisfied: (i) VEPCO does not operate Mount Storm Units 1, 2, or 3 during FGD outages or downtim e on more than thirty ( 30) “days”, or any part thereof, in any calendar year; in the case of Mount St orm Unit 3, operation during an outage or 23downtim e in either of the two FGD a bsorb er vessels serving the Unit shall count as operation during a “1/2” day of FGD outage or downtim e; ( ii) All othe r av ailab l e VEPCO System Units on-lin e at t h e Mou n t Storm Station and Clover Power St ation are dispatched ahead of the Mount Storm Unit experiencing the FGD outage or downtim e; (iii) For each of the first twenty (20) “d ay s” in a calen d ar y ear, or part thereof, that a Unit operates under this Paragr aph VEPCO surrenders to EPA (using the procedure Section VI, P a ragraph 72) one SO 2 Allowance, in addition to any surrender or possession of allowances requi red under Title IV or under any other provision of this Consen t Decree, for each ton of SO 2 actually em itted in e x cess of the SO 2 em issions that would have occurred if coal containing 1.90 lb/mmBTU sulfur had been burned; and (iv) For each “day”, or part th ereof, that a Unit operates under th is Paragraph beyond twenty (20) “days” in a cale ndar year, VEPCO shall surrender to EPA (using the procedure in Sec tion VI, P a ragraph 72) one SO 2 Allowance, in addition to any surrender or poss e ssion of allowan ces req u ired under Title IV or u nder any other prov is ion of this Cons ent Decree, for each ton of SO 2 actually em itted in excess of SO 2 em issions that would have o ccurred if coal containing 1.70 lb/mmBTU sulf ur had been burned. (B) In any calendar year from 2005 through 2007 , VEPCO may operate Mount Storm Units 1, 2, or 3 in the case of FGD outage or dow ntim e, if all of the following conditions are satisfied : 24(i) VEPCO does not operate Mount Stor m Units 1 or 2 during F GD outages or downtim e on m ore than thirty (30) “day s”, or any part thereof, in any calendar year; and in the case of Mount Stor m Unit 3, operation during an outage or downtim e in either one of the two FGD absorber vessels serv ing the Unit shall count as operation during “1/2” day of FGD outage or downtim e; (ii) All othe r av ailab l e VEPCO System Units on-lin e at th e Mou n t Storm Station and Clover Power St ation are dispatched ahead of the Mount Storm Unit

e xperiencing the FGD outage or downtim e; (iii) For each of the first ten (10) “days”, or part thereof, in a calendar year th at a Unit operates under this Paragraph VEPCO surrenders to EP A (using the procedure in Section VI, Paragraph 72) one SO 2 Allowance, in addition to any surrender or possession of allowances requi red under Title IV or under any other provision of this Consen t Decree, for each ton of SO 2 actually em itted in e x cess

o f the SO 2 em issions that would have occurr ed if coal containing 1.90 lb/mmBTU sulfur had been burned; (iv) For each day that a Unit operates un der th is Paragraph from t he eleven th through the twentieth “days”, or part th ereof, in a calendar year, VEPCO s hall surrender to EPA (using the procedure in Section VI, Paragraph 72) one SO 2 Allowance, in addition to any surrender or possession of allow a nces required under Title IV or under any other provisi on of this Consent Decree, for each of the tons of SO 2 actually em itted that equal th e m a ss em issions dif f erence b etween actual em issions and those that would ha ve occurred if coal containing 1.70 25lb/mmBTU sulf ur ha d been used.; and ( v) For each day that a Unit operates un der th is Paragraph be yon d twenty (20 ) “days”, or p art thereof, in a calend ar year, VEPCO shall surrender to EPA (using the procedure Section VI, Paragraph 72) one SO 2 Allowance, i n addition to any surrender or possession of allowances requi red under Title IV or under any other provision of this Consen t Decree, for each ton of SO 2 actually em itted in e x cess of SO 2 e m is sions that would have occurre d if coal containing 1.50 lb/mmBTU sulfur had been burned; (C) In any calendar year from 2008 through 2012 , VEPCO may operate Mount Storm Units 1, 2, or 3 in the case of FGD outages or dow ntim e, if all of the following conditions are satisfied : (i) VEPCO does not operate Mount Storm Units 1, 2, or 3 during FGD outages or downtim e on more than ten ( 10) “days”, or part thereof, in any calendar year; in the case of Mount St orm Unit 3, operation during an outage or downtim e in either of the two FGD a bsorb er vessels serving the Unit shall count as “1/2” day of operation during an F GD outage or downtim e; ( ii) All othe r av ailab l e VEPCO System Units on-lin e at th e M ou n t Storm Station and Clover Stati on are dispatched ahead of the Mount Storm Unit experiencing the FGD outage or downtim e; and (iii) VEPCO surrenders to EP A (using th e procedure of Section VI, Paragraph 72) one SO 2 Allowance, in addition to any su rrender or possession of allowances required under Title IV or under any other provision of this Consent Decree, for 26each ton of SO 2 actually em itted in e x cess of SO 2 em issions that would have occurred if coal with 1.50 lb /mmBTU sulfur had been burned. 68

. Calculating 30-Day Rolling Average Re m oval Efficiency of a VEP C O System FGD

. The SO 2 30-Day Rolling Average Re moval Ef f i ciency f or a VEPCO Syste m FGD shall be obtained and calculated using SO 2 CEMS data in com pliance with 40 CFR Part 75 (from both the in let and outle t of the contro l device) by subtr acting the o u tle t 30-Day Rolling Av erage Em ission Rate f r om the inlet 30 -Day Rolling Average Em ission Rate on each day the boiler operates, div i ding th at dif f e rence by the inle t 30- Day Rolling Average E m ission Rate, and then multiply ing by 100. A new 30-Day Rolling Average Re m o val Efficiency shall b e calculated for each new Operating Day. In the case of FGDs s e rving Chesterfield Units 5 and 6 or Mount Storm Units 1, 2, or 3, if any fl ue gas em issions containing SO 2 did not pass through the inlet of the Unit’s scrubber on a day when the Unit ope rated, VEPCO m ust accou nt for, report on, and include any such em issions in calculating the FGD Re m oval Efficiency for that day and for every 30-Day Rolling A verage of which that day is a part. 69. Comm encing within 30 days after lodging of this Decree, VEPCO shall use best efforts to operate each such FGD at a ll tim es the Unit the FGD serves is in operation, provided that such FGD syste m can be operated consistent with m a nufacturers’ specifications, go od engineering practices and VEPCO’s operationa l and m a intenance needs. In calculat ing a 30-Day Rolling Average Removal Efficiency or a 30 -Day Rollin g Average E m ission Rate for a Mount Storm Unit, VEPCO need not include SO 2 em itted by Unit while its FGD is shut down in c o m p liance with Paragraph 67 (“Interim Mitigation of Mount Storm SO 2 Em issions While FGDs are Im proved”).

2770. SO 2 Measurem ent Methods

. VEPCO shall conduct all em issions m onitoring for SO 2 in

com pliance with 40 C.F.R. P art 75.

VI. ANNUAL SURRE NDER OF S O 2 A L LOWANCES 71. Annual Surrender

. On or before March 31 of every year beginning in 2013 and continuing thereafter, VEPCO shall surrender 45,000 SO 2 Allowances. In each year, this surrender of SO 2 Allowances m a y be m a de either direc tly to EPA or by fi rst transferring the SO 2 Allowances to another person in the m a nner provided for by this Decree. 72. Surrender D i rectly to EPA

. If VEPCO elects to m a ke an annual surrender directly to EPA, VEPCO shall, on or before March 31, 2013, and on or before March 31 of each year there af t er, s u bm it SO 2 Allowance transfer request form s to EPA’s Office of Air and Radiation’s Clean Air Markets Division dire cting the transfer of 45,000 SO 2 Allowances held or controlled by VEPCO to the EPA Enforcem ent Surrender A cc ount or to any other E P A Account to which the EPA m a y direc t

. As part of sub m itting thes e transf e r

re quests, VEPCO shall ir r evocably authorize the transfer of these Allowances a nd V E PCO shall also identify – by nam e of account and any applicable serial or ot her iden tif ica tion nu mb ers or plant nam e s – the source and location of the Allowances being surrendere d, as well as any inform ation required by the transfer request for m . 73. Alternate Method of Surrender

. If VEPCO elects to m a ke an annual surrender of SO 2 Allowances to a person other than E P A, VEPCO sh all include a description of such transfer in the next rep o rt subm itte d to Plain tif f

s pursuan t to Section XI X (“Periodic Reporting” ) of this Consent Decree. Such report shall: (A) provide the identity o f the third

- p arty r ecip i en t(s) of the 28SO 2 Allowances and a listing of the serial num bers of the transferred a llo wances; (B) include a certificate in com p liance with Section XIX from t he third-party recipient(s) stating that it (they) will not s e ll, trade, o r oth e rwise ex ch ange any of the allowanc es and will n o t use any o f the allowances to m eet any obligation imposed by any environm ental law. No later than the next periodic report due 12 m onths after the first repo rt of the tran sfer, VEPCO shall in clu d e in the Section XIX reports to P l ain tiffs a statem ent that the th ird-p a rty recip i ent(s) perm anently surrendered the allowances to EP A within on e ye ar af ter VEP C O transf err e d the a llow a nces to the th ird-p ar t y rec i pien t( s). VEPCO shall no t hav e f i nally co mplied with th e allowanc e surrender requirem e nts of this Paragraph until all third-party recipient(s) shall have actually surrendered the transferred allowances to EPA. 74. Changes to Decree-Mandated SO 2 Allowance Surrenders Beginning in 2013, and every year th ereafter: (A) If changes in Title IV of the Act or it im plem enting regula ti o ns decre ase the

num b er of SO 2 Allowances tha t ar e alloc ated to the VEPCO System Units f or the yea r 2013 or any year thereafter, or if other applicable law e ither: (A) awards fewer than 127,363 SO 2 Allowances to the VEPCO System or (B) direc t s non-reus ab le surrender of SO 2 Allowances by VEPCO, then the num ber of SO 2 Allowances th at V E PCO must surrender in such a year under this Secti o n shall decrease by the sam e a m ount; (B) If changes to Title IV of the Act or its im plem enting regu latio n s result in ( i ) a reduction of SO 2 Allowances to the VEPCO Sys t em and (ii) any am ount of SO 2 Allowances being auctioned-off, and the national SO 2 Allowance pool reflects a nationwide reduction in SO 2 Allowances of less than 35.6% from the 2010 national pool,

29then the number of SO 2 Allowances that VEPCO m ust su rrender in such year under this Section of this Decree shall decrease as follows: 45,000 – (127,363 x the percent reduc tion of the National pool) Thus, if the na tional pool of SO 2 Allowances is reduced by greater than 35.6% from t he 2010 national pool of SO 2 allowances, then VEPCO is not required to surrender any SO 2 Allowances under this Decree. But in no event shall VEPCO keep in excess of 82,363 S O 2 Allowances allocated in any year after 2012 to the VEPCO Syste m . (C) If changes to Title IV of the Act or its im plem enting regu latio n s result in a n increase of SO 2 Allowances to VEPCO, then VEPC O’s annual obligation to surrender such Allowances under this Decree shall in crease by the am ount of such increase. 75. Use of SO 2 Allowances Related to VEPCO Syste m Units Scheduled for FGDs under the Decree

. For all SO 2 Allowances allocated to Mount St orm Unit 1 on or after January 1, 2003, Mount Storm Unit 2 on or after January 1, 2003, Ch esterfield Unit 5 on or after October 1, 2012, and Chesterf ield Unit 6 on or after January 1, 2010, VEPCO m a y use suc h SO 2 Allowances only to (A) m eet the SO 2 Allowance surrender requirem ents established for the VEPCO System under this Decree; (B) m eet the lim its im posed on VEPC O under Title IV of the Act; or (C) m eet any federal or state future em ission reduction program s that use or rely on T itle IV SO 2 Allowances for com pliance, in whole or in part. Howeve r, if VEPCO operates a FGD serving Mount Storm Unit 1, Mou n t Storm Unit 2, Chester f i eld Unit 5, or Chesterf ield Unit 6 e i ther : (A) ea r lie r than required by a provision of this Decree or (B) at a 30-Day Rolli ng Averag e Rem oval Efficiency greater than, or a 30-Day Rolling Average Em issions Rate les s than th at required by this Decree, then VEPCO m a y use for any lawful purpose S O 2 Allowances equal to the num ber of tons of

30SO 2 that VEPCO re m oved from the em ission of those Units in excess of the SO 2 tonnage reductions required by this Decr ee, so long as V E PCO ti m e ly reports such use under Section XIX

. 76

. Other Lim its on Use of SO 2 A llowances

. VEPCO m a y not use the sam e SO 2 Allowance more than once. VEPCO m a y not use the SO 2 Allowances surrendered under this Section for any other purpose, including, but not lim ited to, a ny sale or trade of such Allowances for use by any person other than VEPCO or by any Unit not part of the V E PCO Syste m , except as provided by Paragraph 73 (“Alternate Method of Surrender”). Other than the lim its stated in th is Decre e on use of SO 2 Allowances or lim its im posed by law, this Decree im pose s no other lim its on how VEPC O m a y use SO 2 Allowances. 77. No Entitlem e nt Created . This Consent Decree does not entitle VEPCO to any alloc a tio n of SO 2 Allowances under the Act. VII. PM EMISSION R EDUC TIONS AND CONTROLS 78. Use of Existing PM Pollution Control Equipm ent

. Comm enc i ng within 30 days after lodging of this Decree, VEPCO shall operate each ESP and ba ghouse within the VEPCO System
to m a xi m i ze PM em ission reductions through the pr ocedures established in this Paragraph. VEPCO shall (A) commence operation no later than two hours after comm ence m e nt of

com bustion of any a m ount of coal in the controll e d System Unit, exc ept that th is requ irem ent shall apply to Brem o Power St ation Units 3 and 4 commencing two hours after cessation of oil injec tion to the boile r, an d provided that, for all ESP-equi pped Units, “com bustion of any

am ount of c oal” shall not include combustion of coal that is the result of clearing out a Unit’s coal m ills as the Unit is returned to se rvice ; (B) fu lly ene r giz e each ava ilab l e portion of each 31ESP, except those ESP fields th at hav e been out o f service s i n ce at least January 1, 2000, consistent w ith m a nufacturers’ specificati ons, the operational desi gn of the Unit, and good engineering practices, and repair such fields that go out of ser v ice con s istent with the requirem e nts of this Paragraph; (C ) m aintain power leve ls d elive r ed to the ESP s, consisten t with

m a nufacturers’ specifications, th e operational design of the Unit, and good engineering practices; and (D) continuously op erate each E SP and baghouse in com p liance with m anufacturers’ specifications, the operational design of the Unit, and good engineering practices. W h enever any elem ent of any ESP that has been in service at any tim e since January 1, 2000 fails, does not perform in accordance with m a nufacturers’ spec ifications and good engine ering practices, or does not operate in acco rdance with the standards set forth in this Parag r ap h, VEPCO shall us e best efforts to repair the elem ent no later than th e next ava ilab l e Unit ou ta ge appropr ia te to the repair task. The requirem e nts of this Paragra ph do not apply to Possum Point Units 3 and 4 until January 1, 2004, and do not apply at all when those Units burn natural gas. 79. ESP and Ba ghouse Optim i zation St udies and Recomm endations. VEPCO shall com p lete an optim ization study, in accordan ce with the sch e dule below, for each VEPCO System Unit served by an ESP or baghouse (except Possum Point Units 3 and 4, in light of their conversion to natural gas), which shall recomm end: the best available m a intenance, repair, and operating practices that will op tim ize ESP or baghouse availa b ility and perform ance in acco rdan ce with

m a nufacturers’ specifications, th e operational design of the Unit, and good engineering practices. These studies shall consider any ESP elem ents not in service prior to January 1, 2000, to the extent changes to such elem ents m a y be required to m eet a PM Em ission Rate of 0.030 lb/mmBTU. Any operating practices or pro cedures developed and approved under this

32Paragraph shall becom e a part of the standard sp ecified in (D) of Paragraph 78 (“Use of Existing PM Pollution Control E quipm ent”), above, and sh all be im plem ented in com p liance with that Paragraph. VEPCO shall retain a qualified co ntractor to assist in the perf orm a nce and

com p letion of each stud y. VEPCO shall subm it each com p leted study to the United S t ates for review and approval. (T he United States will cons ult with the other Plaint iffs before com p leting such review). VEPCO s hall im ple m ent the study’s recomm endations within 90 days (or any longer tim e period approved by the United States) af ter receipt of approval by the United States. If VEPCO s eeks m ore than 90 days to im ple m ent the recommendations contained in the study, then VEPCO shall include, as part of the study, the reasons why m ore than 90 days are necessary to im ple m ent the recomm endations, e.g., the need to order or install parts or equipm ent, retain specialized expertise, o r carry out training exercises. VEPC O shall m a intain e ach ESP and baghouse as required by the study’ s recommendations and shall s upplem en t the ESP operational standard in (D) of Paragraph 78 to include any operational elem ents of the study and its

recomm endations. The schedule for com p letion and subm ission to the United States of the optim ization studies shall be as f o llo ws:

Number and Choice of VEPCO System Units on Which VEPCO Shall Complete and Submit Opti mi z a tion Studies Number of Months After Lodging of the Decree that VEPCO Shall Submit Optimi z a tio n s Studies to the U.S. Four Units (including at least one Unit at Mount St orm or Chesterfield) 12 Mo nths Three More Units (including at least two at any one or m o re of the followin g VEPCO stations – Mount St orm, Chesterfield , and Brem o, if not already done) 24 Mo nths

33o located or m o re of the following VE PCO stations – Mo unt Storm , Chesterfield, and Two More Units (including at least tw at any one Brem o, if not already d one ) 36 Mo nths

Two More Units 48 Mo nths Two More Units 60 Months All Other U n its 72 Mo nths

80. Alternative to Pollution Control Upgrade Analysis

. W ithin 270 days after VEPCO receives the United States’ a pproval of the ESP optim ization study for a VEPCO Sys t em Unit, VEPCO m a y elect to achieve for an y Unit the o b jectives of, and thereby avoid, the P ollution Control Upgrade Analysis otherwise required by th is Section by certifying to the United States, in writing, that: (A) the ESP sha ll continue to be operated and m a intained in com pliance with the approved optim ization plan, pursuant to Paragraphs 78 and 79 of this Section, respectively, and (B) that the enforceable PM em ission lim it for this Unit shall be 0.030 lb/mmBTU, either commencing imm e diately or on and after the date required by this Decree for com ple tion of FGD installations or im provem e nts at that Unit ( o r af ter insta lla tion of any other FGD system VEPCO chooses to install at a Unit prior to 2013). Otherwise, VEPCO shall c om ply with Paragraph 82 (Pollution Con trol Upgrade Analys is, Construction of PM Controls, Compliance

w ith New Em ission Rate”), below. 81. PM Em ission Rate Determ ination

. The m e thods specified in this Paragraph shall be the reference m ethods for determ ining PM Em ission Rates along with any other m e thod approved by EPA under its authority to establish or appr ove such m e thods. The PM Em ission Rates established under Paragraph 80 of this Section sh all not apply during periods of “startup” and “shutdown” or during periods of control equipm e n t or Unit m alfunction, if the m alfunction m eets

34the requ irem ents of the F o rce Majeure Section of this Consen t Decree. Pe riods of “startup” shall not exceed two hours after any am ount of coal is com busted (except that f o r Bre m o Power Station Units 3 and 4, this two- hour period begins upon cessation of injection of oil into the boiler). Periods of “shutdown” shall only co mm e nce when the Unit ceases burning any am ount of coal (or in the case of Brem o Power Station U nits 3 and 4, when any oil is introduced into the boiler). Coal shall not be deem ed to be com buste d if it is burned as a result of clearing out a Unit’s coal m ills as the Unit is retu rned to serv ice. The reference m e thods for determ ining PM Em ission Rates shall be those specified in 40 C.F.R. Part 60, Appendix A, Method 5 or Method 17, using annual stack tests. VEPCO shall calculate PM Em i ssion rates from the annual stack tests in accordance with 40 C.F.R. 60.8(f) and 40 C.F.R. 60.48a(b). The annual stack-testing requirem e nt of this Paragraph shall be conduc ted as described in Paragraph 95 and m a y be satisfied by: (A) any annual stack tests VEPCO m a y conduc t pursuant to its perm its or applicable regulations f r om the States of Virginia and W e st Virginia if such tests employ reference test

m e thods allowe d under this Decree, or (B) in stallation and operation of PM CEMs required

u nder this Decree. 82. Pollution Control Upgrade Analysis of PM , Cons truction of PM Controls, Com pliance with New Em ission Rate

. For each VEPCO System Unit served by an ESP -- other than Possum Point Units 3 and 4 and those Units that m eet th e requirem e nts of Paragraph 80 (“Alternative to Pollution Control Upgrade Analysis”) -- VEPCO shall com p lete a Pollu tion Contro l Upgrade Analysis an d shall d eliv er the Ana l y sis and s upporting docum e ntation to the United States for review and approval (after consul ta tion with the other Plaintif f

s). Notwithstanding the definition of Pollution Control Upgrade Anal ysis (Paragraph 38), VEPCO sha ll not be required to consider

35in this Analysis: (A) th e replacem ent of a ny existing ESP with a new ES P, scrubber, or baghouse, or (B) the installation of any supplem ental pollution contro l device sim ilar in cost to a replacem ent ESP, scrubber, or baghouse (on a to tal dollar-per-ton -of-pollution-rem o ved basis). 83. VEPCO shall retain a qualified contractor to assist in the perf orm a nce and com p letion of each Pollu tion Control Upgrade Analysis. W ith in one year of the United States ’ ap proval of the work and recommendation(s) m a de in the Analys is (or within a longer period of tim e properly sought by VEPCO and a pproved by the United States), VEPCO shall com plete all

recomm endation ( s). If VEPCO seeks m o re than one year from the date of the United States’ approval of the Analysis to com p lete the work and recomm endations called for by the Analysis, VEPCO m u st state the amount of addition a l tim e required an d the reason s why additional tim e is necessary. Thereafter, VEPCO shall ope rate ea ch ESP in com p liance with the wor k

and

recomm endation ( s), including com pliance with th e specified Em ission Rate. T he schedule for

com pletion and subm ission to the United States of the Pollution Control Upgra de Analyses for each Unit su bject to th is Paragraph s h all be 12 m onths after the United States ap p r oves the ESP optim ization study for each Unit pursuant to Para graph 79 (unless VEPCO has elected to use the alte rnative to the Pollu tion C ontrol Upgrade Analysis under Paragraph 80 for the Unit). 84. Perform a nce Testing of Equipm ent Requi red by Pollution Control Upgrade Analysis

. Between 6 and 12 m onths after VEPCO com pletes installation of the equipm e nt called for by each approv ed Pollution Control Upgrade Analys is, VEPCO s hall condu ct a perform a nce test dem onstration to ensure that the approved PM em ission lim itation set f or t h in th e Analysis can be consistently achieved in pr actice, including all requirem e nts pertaining to proper operation and m a intenance of control equipm e nt. If the perform ance dem onstr atio n shows that the

36approved control equipm ent cannot consistently m eet the required PM em ission lim i t ation, VEPCO shall revise the Pollution Control Upgrade Analysis and resubm it it to the Un ited States for review and approval of an a ltern a tive em issio n s lim itation

. 85. Installation and Operation of PM CEMs

. VEPCO shall install, calibrate, operate, and

m a intain PM CEMs, as specified below. Each PM CEM shall be com prised of a continuous particle m a ss m onitor measuring particulate m a tter concentration, directly or indirectly, on an hourly average basis and a diluent monitor used to convert results to units of lb/mmBTU. VEPCO m a y select any type of PM CEMS that m eets the requirem e nts of this C onsent Decree. VEPCO shall m a intain, in an electronic database , the hourly average em i ssion values of all PM CEMS in lb/mmB TU. D uring Unit startups, VE PCO shall begin operating the PM CEMs in accordan ce with the s t an dards set out in Para grap h 78(A) (“U se of Existin g PM Pollution Control Equipm ent”), and VEPCO shall thereafter use reaso nable efforts to k eep each PM CEM running and producing data whenever any Unit served by the PM CEM is operating. VEPCO shall subm it to EPA for review and approval a plan to ins t all, calib rate and o perate each PM CE M. VEPCO shall thereafter op erate each PM CEM in accordance with the approv ed plan. 86. Installation of PM CEM s – First Round (Three Units)

. On or before Decem ber 1, 2003, VEPCO shall des i gnate which thre e VEPCO Syst em Units will h ave PM CEM s insta l led, in accordan ce with this P a ragraph. No later than 12 m onths after entry of th is Decree (o r a longer tim e period approved by the United States, no t to exceed 18 months after entry of this Decree) VEPCO shall ins t a ll, ca libra t e, and comm ence operation of the following: (A) PM CEMs in the stacks that s e rvice at le ast two of the f o llowing VEPCO System Units: Mount Storm Units 1, 2, and 3, and Clover Units 1 and 2; and 37(B) at least one additional P M CEM at a ny other ES P-equipped Unit in the VEPCO System , as selected by VEPCO. If VEPCO s eeks m ore than 12 m onths after entr y of the Decre e to com p lete installatio n and calib ration o f the PM CEMs, then VEPCO shall in clude a full explanation of the reasons why it requires m ore than 12 months after entry of th e Decree to complete in stallation and calibration. 87. Consultation Before th e First Round of PM CEM s . Prior to installing any PM CEMs, VEPCO and the United States sh all m eet, consult, and agree to adequate m echanism s for treating potential em ission lim itation exceedances that m a y occur during installation and calibration periods of th e PM CEMs that m a y exceed applicable PM em ission lim itations. VEPCO and the United Sta t e s shall invite the Sta t es o f Virgin ia an d W est Virginia to par tic ipate in the s e discussions. 88. O ption for Consultation Both Before and Af ter Installation of the First or Second Round of PM CEM s . Either before the first or second round of PM CEMs installations, or af ter such PM CEMs are installed and producing data, or bo th, the United States and VEPCO shall m eet, upon the request of either, to exam ine further the data that may or m a y not be generated by the PM CEMs. This issue should be addressed in light of the regulatory or perm it-based m a ss

em ission lim it set for the Unit before it was equipped with a PM CEM or any PM em ission lim itation established or to be established under th is Section of the Decree, and the parties should take app r opriate and acceptable act ions to address any issues conc erning periodic short term Unit process and control device upsets and/or averaging periods. In the ev ent VEPCO or the United States call for such a m eeting, the United States and VEPCO shall invite the States of Virginia and W est Virginia to pa r tic ipate.

3889. De m onstration that PM CEMs Are Infeasible

. N o earlier than 2 years after VEPCO has installed the first round of PM CE Ms, VEPCO m a y attem p t to dem onstr ate that it is infeasible to continue operating PM CEMs. As part of such dem onstration, VEPCO shall subm it an alternative P M m onitoring plan for review and approval by the United States. The plan shall explain the basis for stopping operation of the PM CEMs and pr opose an alternative-monitoring plan. If the United States disappr ov e s the a lte rnative PM m o nitor i ng plan, or if the United States reje cts VEPCO’s claim that it is inf easible to continue operating PM CEMs, such disagreem ent is subje c t to Section XXV II (“Dispu t e Res olution ”). 90. “ Infeasible to Continue Operating P M CEMs ” – Standard

. Operation of a PM CEM shall be considered “infeasible” if, by way of exa m ple, the PM CEMS: (A) cannot be kept in proper condition for sufficient periods of time to produ ce reliable, adequate, or useful data; or (B) VEPCO demonstrates that recurring, chronic, or unusual equipm ent adjustm e nt or servicing needs in relation to other types of continuous em ission m onitors cannot be resolved through reasonable expenditures of resources ; or (C) chronic and difficult Un it operation issues cannot be resolved through reasonable expe nditure of resources; or (D) the data produced by the CEM cannot be used to assess PM em issions from the Unit or perf orm ance of t h e Unit’s control devices. If the United States determ ines that VEPCO has demonstrated inf easibility pursuant to this Paragraph, VEPCO shall be en titled to discontinue operation of and remove the PM CEMs. 91. PM CEM Operations Will Continue Du ring Disp ute Resolu tion or Propos als for Alterna tive Monitor i ng . Until th e United States approves an alte rnative monitoring plan or un til the conclusion of any proceedi ng under Section XXVII (“Disput e Resolution”), VEPCO shall continue operating the P M CEMs. If EPA has not issued a decision regarding an alternative

39monitoring plan within 90 da ys VEPCO m a y initiate action under the Dispute Resolution provision s (Section XXVII) under this Consent Decree. 92. Installation and Operation of PM CEMs – Second Round (6 Units)

. Unless VEPCO has been allowed to cease o peration of the PM CE Ms under Paragraph 89 (“De m onstration that PM CEMs Are Inf easible” ) , then VEPCO shall ins t a ll, ca lib rate, and comm ence opera tio n of PM CEMs that s e rve a t lea st 6 m o re Units. In se lecting the VEPCO System Units to r ece ive PM CEMs under this second round, VEPCO m ust assure that Mount Storm Units 1, 2, and 3 and Clover Units 1 and 2 all receiv e PM CEMs if they have not already received PM CEMs under the first rou nd. VEPCO m a y select the other VE PCO System Units to receive the required PM CEMs. The options for consultation regardi ng first round PM CEMs under Paragraphs 87 and 88 shall also be available for second round PM CEMs. VEPCO shall install PM CEMs that serve two V E PCO Syste m Units in each of the years 2007, 2008, and 2009 under this second round of PM CEMs. 93. Common Stacks

. Installation of a P M CEM on Mount Storm Units 1 and 2 or on Yorktown Units 1 and 2 shall count as installatio n of PM CEMs on 2 units in recognition of the common stack that serves these Units

. VEPCO and the United States sh all agree in writing on the m e thod for apportioning em issions to the Units served by common stacks. 94. Data Use

. Data from PM CEMs shall be used by VEPCO, at m i ni m u m , to m onitor progress in reducing PM em issions. Nothing in this Consent Decree is intended to or shall alter or waive any applicable law (including, but not lim ited to, any defense, entitlem e nts, challenges, or clarifications related to the Credib le Evidence Rule (62 Fed. Reg. 8314 (Feb. 27, 1997))) concerning the use of data for any purpose under the Act, generated either by the reference
40m e thods specified herein or otherwise. 95. Other Testing and Reporting Requirem e nts

. Comm encing in 2004, VEPCO shall conduct a stack test for PM on each stack servic ing each Unit in the VEPCO Syste m (exclud i ng Possum Point Units 3 and 4 in 2004, and in any subs equent year in which such Units have not burned coal). Such PM stack testing shall be co nducted at least once per every four successive “QA Operating Quarters" (as defined in 40 C.F.R. § 72.2) and the results of such testing shall be subm itted to the Pla i ntif f

s as par t of the period ic r e porting und er Section XIX (“Period ic Reporting”) and Appendix B. Following installati on of each PM CEM, VEPCO shall include all data recorded by PM CEMs, including subm ission in ele ctron ic f o rm at, if available, in the reports required by Section XIX.

VIII. POSSUM POINT UNITS 3 & 4: FUEL C O NVERSION, INSTALL A TION OF C ONTR O LS
96. Fuel Conversion

. VEPCO shall cease all com bus tion of coal at Possum Point Units 3 and 4 prior to May 1, 2003, in preparation for the conversion of Possum Point Units 3 and 4 to operate on n a tural gas, and shall no t operate th es e Units again until that f u el conversion is

com plete and the Units are firing natural ga s. V E PCO shall continuously operate such equipm ent to contro l NOx em issions in com p liance with Sta t e perm ittin g r equir em e nts. VEPCO also shall lim it the combined em issions from Possum Point Units 3 and 4 to 219 tons of NOx in any 365 days, rolled daily, and determ ined as fol l ows: Add the total NOX e m issions fro m Possum Point Units 3 and 4 on any given day, occurr ing af te r entry of th is Decree, to the to tal NOX e m issions fro m those two Units for the pr eceding 364 consecutive days occurring after

41entry of the Decree; the sum of those em issions m a y never exceed 219 to ns. If VEPCO exceeds this 219-ton lim it, VEPCO shall install and operate SCR at BACT levels within 3 years of the exceedance at either Yorktown Unit 1 (173 MW ) , or Yorkto wn Unit 2 (183 M W ), or Brem o Unit 4 (170 MW )

. VEPCO may select which of th ese Units receives the SCR so long as the f o llowing ar e true f o r th e Unit: (A) An SCR is not requ ired under regu latory requ irem ents for the Unit; (B) VEPCO had not planned to install an SCR on suc h Unit to help com ply wi th any requirem e nt as of the day of exceedan ce at Possu m Point; and (C) The Unit is not requ ired to m eet an em issi on rate that would call for installation of SCR. If these con d itions are n o t m et for any of the th r ee listed Units, then VEPCO shall ins t all the requir e d SCR at the nex t larges t Unit (in MW ) within th e VEPCO System that m e ets the

c onditions of subparagraphs (A) through (C). 97. Return to C o m bustion of Coal After Gas Conversion

. If VEPCO uses coal rather than natural gas to operate Possum Point Units 3 or 4 on or after May 1, 2003, VEPCO shall install controls on such Unit(s) and m eet the following requirem e nts for NO x , SO 2 , and PM em issions, on or after May 1, 2003: (A ) For NO x , the m o re stringent of: (i) a 30- Day Rolling Average Em ission Rate of 0.100 lb/mmBTU or (ii) the NO x e m ission rate that would be L A ER at the tim e that VEPCO return s to f i ring Possum Point Units 3 or 4 with c o al; (B) For SO 2 , a 30-Day Rolling Average Re m oval Efficiency of at least 95.0%; and (C) For PM, an Em ission Rate of no m or e than 0.030 lb/mmBTU.

4298. Measurem ents At Possum Point

. The applicable m e thods a nd rules specified in other po r tions of this Decree for m easuring em i ssion rates and removal efficien cies for NO x , SO 2 , and PM also apply to the em ission standards, as applicable, established under Paragraph 96 and 97 (“Fuel Conversion” and “ Return to C o m bustion of Coal After Gas Conversion ” ) for P o ssum Point Units 3 and 4.

I X. INSTALLING ADDITIONAL C ONT ROL S ON VEPC O S Y ST EM UNITS 9 9. If, prior to N ovem b er 1, 2004, this C onsent D ecree is m odified to requ ire that VEPCO: (A) Insta ll add i tional NO x or SO 2 pollution control devices on a V E PCO Syste m Unit not scheduled for installation of such control device as pa rt th e orig inal D ecree; (B) Comm ence full-tim e (year-r ound) operation of such c ontrol device no later than January 1, 2008; and (C) Operate the contro l device and the U n it it se rves in com p liance with a perform a nce standard of 0.100 lb/mmBTU 30-Da y Ro l ling A verage Em ission Rate fo r NO x or a 95.0% 30-Day Rolling Average Rem oval Efficiency for SO 2 ; then the m odification of the Consent Decree shall also p r ovid e that such Unit be treated as an Im proved Unit as to the pollutant that has been controlled in com pliance with this S e ction. 100. Reference Methods

. T he reference and m o nitoring m e t hods specified in other portions of this Decree for m easuring all em issio n rates and rem oval efficiencies for NO x , SO 2 , a nd PM also apply to the em ission standards es tab lished und er this Sec tion

.

43X. PERMI TS 101. Tim ely Application for Perm its

. Unless exp r ess l y stated othe rwise in this Consent De c ree, in any instan ce where ot he r w ise applica b le law or th is Consent De cree requ ire VEPCO to secure a perm it to authorize constructing or operating any device under this Consent Decree, VEPCO shall m a ke such applic ation in a tim e ly m a nner. Such applications shall be com pleted and subm itted to the ap propria te au thorities to allow suf f i cient tim e f o r all legally req u ired processing and review of the perm it request. Fail ure to com p ly with this p r ov ision sha ll a llow Plaintiffs to bar any use by VEPC O of Secti on XXVI (“Force Majeure”) where a Force Majeure claim is bas e d upon perm itting delays. 102. New Source Review Perm its

. This Consent Decree sh all not be construed to require VEPCO to apply for or obtain a permit pursuan t to the New Source Review requirem e nts of Parts C and D of Title I of the Act f o r any work p e rf orm e d by VEPCO w ithin the s c op e of the resolution of claim s provisions of Sections XI through XVII (Resolut ion of Certain Civil Claim s).103. Title V Perm its

. W h enever VEPCO applies for a Title V perm i t or a revision to such a perm it, VEPCO s h all send, at the sam e time, a copy of such applicati on to each Plaintiff. Also, upon receiv i ng a copy of any perm it proposed for public comment as a result of such ap p lication, VEPCO shall prom ptly send a copy o f such proposal to each P l ain tiff, thereby allowing for tim ely participation in any public comment opportunity. 104. Title V Perm its Enforc eable on Th eir Own Term s . Notwithstanding th e ref erenc e to Title V perm its in this Decr ee, the enf o rce m ent of such perm its shall be in accordance with their own
term s and the Act. The Title V perm its shall no t be directly enforceable under th is Decree, though any term or lim it estab lished by or under this Decree shall b e enforceab le under this

44Decree r ega rdless of whether su ch te rm has or w ill becom e part of a Title V Perm it, subject to the lim its of Section XXX (“Conditional Term ina tion of Enforcem ent, Continuation of Ter m s, and First Re sort to T i tle V Perm it”). 105. Consent Decree Requirem e nts To Be Propos ed for Inclu sion in Title V Perm its

. Whenever VEPCO applies for Title V Per m it(s), or f o r am endm ent(s) to existing Title V Per m it(s), f o r th e purpose of includ ing th e requirem ents of this D ecree in suc h perm its, VEPCO shall in clude in suc h a pplic atio n all pe rf or

m a nce, operational,

m a intenance, and control technology requirem e nts specified by or c reated under this Consent Decree, not only for particular Unit s in the VEPCO System but also for the VEPCO Sys t em itself – including, but not lim ited to, em ission rates, rem oval efficiencies, allowance surrenders, lim its on use of e m ission credits, and operation,

m aintenance and optim ization requirem ents, unless otherwise lim ited by Sections XI through XVII. VEPCO shall notif y all Plaintiffs of any appl icable requirem e nt within its Title V p erm it applic ation that m ay be m o re string ent th an the requ ire m ents of this Consent Decree. 106. Methods to be Used in Applying for Ti tle V Perm it Provisions Applicable to the VEPC O Sys t em . VEPCO shall include provisions in any Title V perm it application ( s) subm itted in acco rdan ce with Paragraph 105 (“Consent Decree Requirem e nts To Be Proposed for Inclusion in Title V Perm its”) that com p ly with this Consen t Decree’s N O x VEPCO System Declining Tonnage Cap (Section IV, Paragraph 60), the VEPCO Syste m -W ide Annual Average E m ission Rate for NO x (Section IV, Paragraph 61), a nd the Annual Surrender of SO 2 Allowances from the

45VEPCO Sys t em (Section VI, Paragraphs 71). In m a king such application, VEPCO shall use either the provisions listed below or any other m e thod agreed to in advance by written stipulation of all the Pa r tie s and f iled with this Co urt: (A) For the VEPCO System declin ing NO x cap in Section IV, Paragraph 61 (“VEPCO System NO x Lim its 2002 and thereafter: Declining, System

- W ide Tonna ge Caps”), each Unit in th e VEPCO System shall be lim ited in perpetu ity to a speci fied portion of the NO x annual em issions cap that u ltim ately descend s to 30,250 tons, provided the to tal of the VEPCO System declining tonn ag e caps for NO x subm itted f or inclus ion in the Title V perm its shall be no greater for any year than the tonnage specified fo r each calendar year for the VEPCO Syste m ). The NO x em ission tons shall b e allo cated to eac h Unit within the VEPCO System

. No Unit shall exceed it s allocation except that VEPCO can trad e NOx e m issions tons between Units within the VEPCO Syste m in order to com ply wi th any given Unit-specific allocation. C o m p liance with the NO x Annual System

- W ide Annual Average Em issions cap shall be determ ined each year by wheth e r each Unit holds a sufficient num b er of NO x em ission tons alloca te d to it in the Title V pe r m it, or acquired by it through trades with other Units in th e VEPCO System , to cover the Unit’s ac tua l , annual NO x em issions; and (B) For the System

- W ide, Annual Average NO x Em i ssions Rate specified in Section IV, Paragraph 61, (“VEPCO Syst e m -W ide, Annual Average NO x Em ission Rate”) VEPCO shall prepare a VEPCO System

- W ide NO x em issions BTU-weighted averaging plan for all the Units in the VEPCO System , and in doing so, shall us e all the approp riate

m e thods and procedures specified at 40 C.F.R. § 76.11 in prepar ing such a plan. As part

46of that plan, VEPCO shall prepare an “alternative cont em poraneous allowable annual

em issions lim itation” (in lb/mmBTU) for each Unit in th e VEPCO System , as described by 40 C.F.R. § 76.11. After this allocation and establishm ent of an “alternative
contem poraneous allowable annual em issions lim itation,” VEPCO’s compliance with Paragraph 61 (“VEPCO System

- W ide, Annual Average NO x Em ission Rate”) shall be determ ined in the m a nner described by 40 C.F.R. § 76.11, as applicable, and shall be based on whether each U n it m eets the applicab le “alternative contem poraneous allowable annual em issions lim itation” for the NO x e m issions BTU wei ghted averaging plan; provided, however, that if any Unit(s) doe s not m eet such em i ssions lim itation, such Unit(s) shall still be in c o m p liance if VEPC O shows that a ll the Units in the em ission s averag ing plan, in aggregate, do not exceed th e BTU-weighted NO x System

- W ide Em issions Rate; and (C) For the Annual Surrender of SO 2 Allowances required by Section VI, the annual SO 2 Allowance surrender requirem e nt of 45,000 SO 2 Allowances shall either be divided up and allocated to specific Units of the VE PCO System or assigned to a single VEPCO System Unit – as VEPCO elects.

XI. RESOL U TION OF CERT AIN CIVI L CLAIMS OF THE UNITED STATES

. 107. Claim s Based on Modifications Oc curring Before the Lodging of Decree

. Entry of this Decree shall resolve all civil claim s of the Un ited States under either : (i) P a rts C or D of Subchapter I of the Clean Ai r Act or (ii) 40 C.F.R. Section 60.14, that arose from any

47modification commenced at any VEPCO Syste m Unit prior to the date of lodging of this Decree, including but not lim ited to, those m odif i cations alleg ed in th e U.S. Co mplain t in th is civil action or in the EPA NOV issued to VEPCO on April 24, 2000. 108. Claim s Based on Modifications after the Lodging of Decree

. Entry of this Decree also shall reso lve all c i vil claim s of the United States f o r pollutan t s regulated under Parts C or D of Subchapter I of the Clean Air Ac t and regulations prom ulgated as of the date of the lodging of this Decree, where such claim s are b ased on a modification com pleted before December 31, 2015 and: A) commenced at any VEPCO System Un it after lodging of this Decree or B) that this Consent Decree expres sly directs VEPCO to undertake. The term “ m odification” as used in this Paragr aph shall have the m eaning that term is given under the C l ean Air Act statute as it ex isted on the date of lodging of this Decree. 10 9. Reopener

. The resolution of the civ il claim s of the United States provide d by this Section is subje ct to the prov is ions of Section XII.

XII. REOPENING OF U.S. CIVI L CLAIMS RESOL V E D BY S ECT ION XI 110. Bases for Pursuing Resolved Claim s Across VEPCO Syste m . If VEPCO : (A) Violates Paragraph 59(A) or (B) (V EPCO S ystem

- W ide, Interim Co ntrol of NOX Em issions, 2004 through 2007); or (B) Violates Paragraph 60 (VEPCO System

- W id e NOX Ton nage Lim its 2003 and thereafter: D eclining, System

- W ide Tonnage Caps); or

48(C) Violates Paragraph 61 (VEPCO Sy stem

- W id e Average NOX E m ission Rate) in any calendar year (or ozone season, as applicable); or (D) Fails by m ore than ninety days to co m plete installation of and commence tim e ly year-round operation of any SCR or FGD require d by Paragraphs 56 or 64 or Sections VIII or IX; or (E) Fails to lim it VEPCO System SO2 e m issions to 203,693 tons or less in each calendar year starting with 2005 and thereafter; then the United States may pursue an y claim s at any VEPCO System Unit otherwise resolved under Section XI, where the m odification(s) on which such claim is based was comme nced, under way, or com pleted within five years precedi ng the violation or failure specified in item s (A) through (E) above, unless such m odificati on was undertaken at an Improved Unit and commenced prior to the date of lodging of this Consent Decree. 111. Other Units

. The resolution of claims of United St ates in Section XI shall not apply to claim s arising from m odi fications a t Other Units commenced less th an fiv e years p r io r to the occurrence of one or more of the following: (A) a m odification or (co llection of modifications) comm enc e d after lodging of this Decree at such Other Unit, individually (or co llectively ) increase the m aximum hourly em ission rate for such Unit for the relevant pollutant (NOx or SO2) as

m easured by 40 C.F.R. § 60.14(b) and (h); or (B) the agg r egate of all Capital Exp enditu res made at su ch Other Unit exceed $125/KW on the Unit’s Boiler Island (bas ed on the Maxim u m Dependable Capacity

num b ers in the North Am erican Electric Reli ability Council’s Generating Availability

49Database for the year 2002) during any of the following five-year periods: January 1, 2001, throug h Decem ber 31, 2005; January 1, 200 6, through Decem ber 31, 2010; January 1, 2 011, through Decem ber 31, 2015. (Capital Expen ditures shall be

m easured in calendar year 2000 constant dollars, as adjus t ed by the McGraw-Hill Engineering News-Record Construction Cost Index); or (C) m odific a tion(s) com m e nced afte r lodgi ng of this Decree resulting in em issions incre ase( s ) o f the relev an t pollu tant th at ac tually occurred from any such Other Unit, where such increas e(s): (1) present by them selves or in com b in ation with other em issions or sources

“ an imm i ne nt and substantial endangerm e nt” within the m e a ning of Section 303 of the Act, 42 U.S.C. § 7603; or ( 2) cause or con t ribu te to v i olation of a National A m b ient Air Quality Standard in any Air Quality Control Area th a t is in attainm ent w ith th at N AAQS;
or (3) cause or contribute to vi olation of a PSD increment; o r (4) cause or contribute to any advers e impact on any for m ally recognized air quality and related values in any Class I area. 112. Solely for purposes of Subparagraph 111(C ), above: (i) the deter m ination of whether

em issions in creas e(s) of the rele van t pollutant ac tually oc curr ed at th e Unit m u st take into account any em issions changes re levant to the modeling dom ain tha t have occurr ed or will occu r under this Decree at other VEPCO System Units; and (ii) an em issions increase shall not be deem ed to have actually occurred unless annual em issions of the releva nt pollutant from all 50VEPCO Sys t em Units at the plant at which such Unit is located (and treating Mount S t orm and North Branch as a sing le plant for th is purpose) h a ve exceed ed such plan t’s em issions of that pollutant after the lodging of this Consent Decree, as specified below:

Plant SO2 Annual Em issions (tons) NOX Annual Em issions (tons) Brem o 13,463 4,755
Chesapeake 35,923 10,657

Chesterfield 75,330 15,858

Clover proved Im 10,076

Mt. Storm / North Branch 19,992 40,188

Yorktown 26,755 5,066

113. Introduction of any new or changed Nationa l A m bient Air Quality Sta n dard shall n o t, standing alo n e, provide the showing needed under Subparagraph 111(C) (1)-(4 ) to pursue any claim resolved under Section XI.

114. Fuel Lim it. The resolution of claim s provided by Section XI shall not apply to any modif i cation commenced on a Unit within f i ve years prior to the date on w hich VEPCO : 51(A) fires such Unit with any fuel or fuel m i x that is either p r o h ibited by a pplicab le state law or that is not o t herwise au thorized by the relevant state; or (B) increases the current (as of February 1, 2003) coal contracting bid s pecification or contract specifications th at lim it f u el sulf ur con t ent i n secu ring coal for a Unit, as summarized in Appendix A . This Paragraph does not appl y to VEPCO’s use of: (i) a fuel or fuel m i x specifically called for by this D ecree, if any, or (ii) any coal in any coal-fired Unit regardless of the fuel’s sulfur content, so long as such use occurs after the Unit is being served by an FGD or ot her control equ i pm ent tha t can m aintain 95.0% Removal Efficiency for SO2, on a 30-day, rolling average basis.

115. Im proved Units

. The resolution of claim s provided by Section XI shall not apply to a modification (or collection of m odifi cations ), if co mmenced after the lodging of this Decree at an Im proved Unit, that individually (o r colle ctiv ely ) incre ase th e m axim u m hourly em ission rate of that Unit for NO x or SO 2 (as m easured by 40 C.F.R. § 60.14 (b) and (h)) by m ore than ten percent (10%) of the maxim u m hourl y em ission rate f o r that Unit.

XIII. RESOLUTION OF PAST CLAIMS OF NEW YORK, NEW JERS EY, AND CONNECTI CUT 116. The States of New York, New Jersey, and Connec ticu t agr ee that this Dec r ee r esolve s all of the following civil claim s that have been or could have been brought against VEPCO for violations at Units at Mount St orm , Chesterf ie ld or Possum Point prio r to the lodg in g of this Decree:

52(A) The Prevention of Significant Deteriorat ion or Non- Attainme nt provisions of Parts C and D of the Clean Air Act, 42 U.S.C. § 7401 et seq. and related st ate p r ovis i o n s; and(B) 40 C.F.R. § 60.1.

XIV. RES O LUTION OF CIVIL CL AIMS OF T H E COMM ONWEAL T H OF VIRGINIA

. 117. Claim s Based on Modifications Occurri ng Before the Lodging of D e cree. Subject to the sp e cific lim itations in this Secti on, entry of this D ecree shall reso lve all civil and adm i nistrative claim s of the Comm onwealth of Virginia that arose from any m odificati on (physical change or change in the m e thod of operati on, including construction of any ai r pollution control project at any VEPCO System Uni t ) under applicable federa l statutes (S ection 7410 (a )(2)(C), Part C or D of Subchapter I of the Clean Air Act or 40 CF R Section 60.14) or appli cable state regulations (Article 6 (9 VAC 5-80-1100 et se q.), Article 8 (9 VAC 5-80-1700 et seq.) or Article 9 (9 VAC 5-80-2000 et seq.) of Part II of 9 VAC 5 Chapter 80, and provisions of 9 VAC 5, Chapter 50, that are equivalent to 40 C.F.R. § 60.14(a)), and, as to the state regulations, al l applicable predecessor regulations. This Paragraph sh all apply to any m odification co mm enced at any VEPCO System Un i t located in the Commonwealth prior to the date of lodging of this Decree. 118. Claim s Based on Modifications after the Lodging of Decree . Subject to th e specif ic lim itations in this Sec tio n, entry of this Decre e s h all a l so r es o lve all civ i l and adm i nistra tive claim s of the Comm onwealth of Virginia aris ing from any modificatio n (physical change or change in the m e thod of operati on, including construction of any ai r pollution control project at any VEPCO system Unit) under applicable federa l statutes (Section 7410 (a )(2)(C), Part C or D of Subchapter I of the Clean Air Act) or appl icable state regulations (Article 6 (9 VAC 5-80-

531100 et seq.), Article 8 (9 VAC 5- 80-1700 et seq.) or Article 9 (9 VAC 5-80-2000 et seq.) of Part II of 9 VAC 5 Chapter 80 and a ny successor regulations). This Paragraph shall apply to any modif i cation at any VEPCO System Unit loca te d in the Commonwealth commenced on or after lodging of this Decree that is com pl e ted be fore Decem ber 31, 2015, or are those that this Consent Decree exp r ess l y directs V E PCO to undertak e. 119. Reopener

. The resolution of the ci vil claim s of the Comm onw ealth of Virginia provided by this Section is subject to the provisions of Section XV. 120. General. Each term used in Paragraph 118 that is also a term used under the Clean Air Act shall m e an what such term m eans under the Act as it existed on the date of lodging of this Decree.

121. Commonwe a lth' s Authority Re garding NAAQS Exceedances. Nothing in this Sec tio n shall b e con strued to af f ect th e Commonwealth' s authority under applicable federal statutes and applicable state regulations to im pose appropr iate requirem e nts or sanctions on a ny VEPCO System Unit when e m issions from the plant at w h ich such un it is loca ted resu lt in violation of, or inte rf ere with the attain m ent and mainten ance o f , any a m bient air quality standard, or the plant fails to operate in conform a nce with any appl icable control strategy, including any emissions standards or em issions lim itations. 122. Nothing in this Section shall prevent th e Commonwealth from issuing to any VEPCO System Unit a perm it under either Article 5 (9 V A C 5-80-800 et seq.) or Article 6 (9 VAC 5-80- 1100 et seq. ) for the purpose of pres erving the term s and conditions of th is Decree as applicable federal requirem e nts upon the expiration of the Decree.

54XV. RE OP ENING OF VIRGINIAS ’ CL AIMS RESOL V E D BY S ECT ION XIV 123

. B ases for Pursuing Resolved Claim s Across VEPCO Syste m . If V EPCO: (A) Violates Paragraph 5 9 (A) or (B) (VEP CO System -W ide, Inter i m Control of NOx Em issions, 2004 through 2007); or (B) Violates Paragraph 60 (VEPCO Sy stem

- W ide NOx Tonnage L im its 2003 and thereafter: D eclining, System

- W ide Tonnage Caps); or (C) Violates Paragraph 61 (VEPCO System

- W ide Average NOx Em is sion Rate) in a ny calendar year (or ozone s eason, as applicable); or (D) Fails by m ore than ninety days to com p lete installation of and comm ence tim ely year-round operation of any SCR or FGD require d by Paragraphs 56 or 64 or Sections VIII or IX; or (E) Fails to lim it VEPCO Sys tem SO2 e m issi ons to 203,693 tons or less in each calendar year starting with 2005 and thereafter; then the Commonwealth of Virginia m a y pursue any claim s at any VEPCO Syste m Unit located in the Commonwealth otherwise resolved under Section XIV, where the m odifi cation(s) on which such claim is bas e d was comm enced, under way, or com pleted within five years preceding the violation or failure specified above, unless such m odification was unde rtaken at an Im proved Unit and commenced prior to the date of lodging of this Consent Decree.

55124. Other Units

. The resolution of claim s of the Co mmonwealth of Virginia in Section XIV shall not apply to claim s arising from m odifica tio ns at Other Units loc a te d in the Co mmonwealth commenced less th an fiv e years p r io r to the oc currence of one or m ore of t he following: (A) One or more m odi fications at such Ot her Unit comm enc e d after lodg ing of this Decree, individually or collectively, increase the m a xi m u m hourly em ission rate for such Unit for the relevant pollutant (NOx or SO 2) as m easured by 40 C.F.R. § 60.14(b) and (h); o r (B) The agg r egate of all Capital Exp enditu res made at su ch Other Unit is in exces s o f $125/KW on the Unit’s Boiler Island (bas ed on the Maxim u m Dependable Capacity

num b ers in the North Am erican Electric Reli ability Council’s Generating Availability Database for the year 2002) during any of the following five-year periods: January 1, 2001, throug h Decem ber 31, 2005; January 1, 200 6, through Decem ber 31, 2010; January 1, 2011, thro ugh Decem ber 31, 2015. (Capital Ex penditu res shall b e m easured in calendar year 2000 constant dollars, as adju s t ed by the McGraw-Hill Eng i neering NewsRecord Construction Cost Index); or (C) Modification(s) com m e nced afte r lodging of this Decree resulting in em issions incre ase( s ) o f the relev an t pollu tant th at ac tually occurred from any such Other Unit, where such increas e(s): (1) present by them selves or in com b in ation with other sources “an imm i nent and substantial endangerm ent” within the m eaning of Section 303 of the Act, 42 U.S.C. § 7603; or

56(2) cause or con t ribu te to v i olation of a National A m bient Air Quality Standard in any Air Quality Control Area th a t is in attainm ent with th at N AAQS;

o r (3) cause or contribute to vi olation of a PSD increment; o r (4) cause or contribute to any advers e impact on any for m ally recognized air quality and related values in any Class I area. Solely for purposes of this Subparagraph (C ), (1 ) determ ination of whether there is an em issions increase that actually occurred re sulting from m o dification(s) at the Unit must take in to accoun t any em issions changes relevant to the m odeling dom a in that have occurred or will occur under this Decr ee at othe r VEPCO System Units; an d (2 ) no suc h incre ase f r o m a Unit will b e deem ed to have occurred if annual em issi ons of the relevant pollutant fr om all VEPCO System Units at the plant at which such Unit is located (and treating Mount S t or m and North Branch as a single plant for th is purpose) do not exceed such plan t’s em issions of that po llutant after lodg ing of this Consent Decree, as specified in Paragraph 112. Also, introduction of any new or changed National A m bient Air Quality Stan dard shall n o t, stand i ng alone, prov ide the showing needed under this Subparagraph (C) (1 )-(4) to pursue any claim re solved under S ection XIV. 125. Im proved Units

. The resolution of claim s provided by Section XIV shall not apply to a modification (or collection of m odi fic a tions), if commenced after lodging of this Decree, at an Im proved Unit located in the Commonwealth that ind i vidually (or co llectively ) increase the

m a xi m u m hourly em ission rate of that Unit for NO x or SO 2 (as m easured by 40 C.F.R. § 60.14 (b) and (h)) by m ore than ten per cent (10%) of the m a xi m u m hourly emission rate for that Unit.

57XVI. RES O LUTION OF CIVIL CL AIMS OF T H E STATE OF WEST VIRGINIA 126. Claim s Based on Modifications Occurri ng Before the Lodging of Decree. Subject to the specific lim itations in this Section, entry of this D ecree shall resolv e all civil claim s of the State of W e st Virginia that arose under applicable federal statut es and regulations (Section 7410 (a)(2)(C), Parts C or D of S ubchapter I of the Clean Air Act or 40 CFR Section 60.14) or applicable state regulations (45CSR13, 45CSR14 and 45CSR19, as well as the provisions of 45CSR16 that are equivalent to 40 CFR Section 60.14(a)) and, as to the state regulations, all applicable predecessor regulations, from any m o di fication (physical change or change in the

m e thod of operation, including but not lim ited to c onstruction of any air po llution control project at any VEPCO Syste m Unit). This Paragraph shall apply to any m odi fic a tion at any VEPCO System Unit located in W est Virgin ia comm enced pr ior to the date of lodgi ng of this Decree. 127. Claim s Based on Modifications after the Lodging of Decree . Subject to th e specif ic lim itations in this Sec tio n, entry of this Decre e s h all a l so r es o lve all civ i l claim s of the State of West Virginia arising under a pplicable federal statutes (Sect ion 7410 (a)(2)(C) and Parts C or D of Subchapter I of the Clean Air Act) or a pplicable state regulati ons (45CSR13, 45CSR14 and 45CSR19 and any successor regu latio n s from any modi fication (physical ch ange or chan ge in the

m e thod of operation, including b ut not lim ited to c onstruction of any air po llution control project at any VEPCO system Unit. This P a ragraph shall apply to any m odification at any V E PCO System Unit located in West Virginia comm enc e d on or after the date of lodging of this Decree that is com p leted b efore Decem ber 31, 2015, or is am ong those that this Consent Decree expressly directs VEPCO to undertake.

58128. Reopener

. The resolution of the civ il claim s of the State of West Virginia provided by thi s Sec tion is subje ct to the prov isio ns of Sectio n XVII. 129. General. Each term used in Paragraph 127 that is also a term used under the Clean Air Act shall m e an what such term m eans under the Act as it existed on the date of lodging of this Decree.

130. West Virgin ia' s Authority Regarding NAAQS Exceedances. Nothing in this Decre e s h all be construed to affect West Virginia' s authority under applicable federal s t atu t es and applicab le state statutes or regulations to im pose appr opriate requirem e nts or sanctions on any VEPCO System Unit when e m issions from the plant at w h ich such un it is loca ted res u lt in violation of, or inte rf ere with the attain m ent and mainten ance o f , any a m bient air quality standard, or the plant fails to operate in conform a nce with any appl icable control strategy, including any emissions standards or em issions lim itations. 1 31. Nothing in this Section shall prevent West Virginia from issuing to any VEPCO Syste m Unit a perm it under either 45CSR13 or 45CSR14) for the purpose of pres e rving the term s and conditions of this Decree as applicable federa l requirem ents upon the expiration of the Decree.

XV II. REOPENING OF W E S T VI RGINIA’S CLAIMS RESOLVED B Y SE CTION XVI

. 132

. Bases for Pursuing Resolved Claim s Across VEPCO Syste m . If VEPCO: (A) Violates Paragraph 5 9 (A) or (B) (VEP CO System -W ide, Inter i m Control of NOx Em issions, 2004 through 2007); or (B) Violates Paragraph 60 (VEPCO Sy stem

- W ide NOx Tonnage Lim its 2003 and thereafter: D eclining, System

- W ide Tonnage Caps); or

59(C) Violates Paragraph 61 (VEPCO System

- W ide Average NOx Em ission Rate) in a ny calendar year (or ozone s eason, as applicable); or (D) Fails by more than ninety days to co m p lete installation of and commence tim ely year-round operation of any SCR or FGD require d by Paragraphs 56 or 64 or Sections VIII or IX; or (E) Fails to lim it VEPCO System SO2 e m issi ons to 203,693 tons or less in each calendar year starting with 2005 and thereafter; then the S t ate of W e st Virginia m a y pursue any claim s at any VEPCO Syste m Unit located in the state otherwise resolved under S ection AA, wher e the m odificatio n(s) on which such claim is based was comm enced, under way, or com pleted w ithin five years preceding the violation or failure specified above, unless such modifica tion was undertaken at an Improved Unit and

com p leted prior to the date of lodging of this Consent Decree. 133

. Other Units

. The resolution of claim s of the Stat e of W e st Virginia in Section AA shall not apply to claim s arising fr om m odi fications at Other Units located in W est V irg inia commenced less th an fiv e years p r io r to the oc currence of one or m ore of t he following: (A) One or more m odi fications at such Othe r Unit, individually or collectively, increase the m a xi m u m hourly emission rate for such Unit for the relevant pollutant (NOx or SO2)

as m easured by 40 C.F.R. § 60.14(b) and (h); or (B) The agg r egate of all Capital Exp enditu res made at su ch Other Unit is in exces s o f $125/KW on the Unit’s Boiler Island (bas ed on the Maxim u m Dependable Capacity

num b ers in the North Am erican Electric Reli ability Council’s Generating Availability Database for the year 2002) during any of the following five-year periods: January 1,

602001, throug h Decem ber 31, 2005; January 1, 200 6, through Decem ber 31, 2010; January 1, 2011, thro ugh Decem ber 31, 2015. (Capital Ex penditu res shall be m easured in calendar year 2000 constant dollars, as adju s t ed by the McGraw-Hill Eng i neering NewsRecord Construction Cost Index); or (C) Modification(s) resulting in em issions in c r ea se(s) of the rele vant pollutant that actually occurred from any such Other Unit, where such increase(s): ( 1) present by them selves or in com b in ation with other sources “an imm i nent and substantial endangerm ent” within the m eaning of Section 303 of the Act, 42 U.S.C. § 7603; or (2) cause or con t ribu te to v i olation of a National A m bient Air Quality Standard in any Air Quality Control Ar ea tha t is in attainm ent with th at NAAQS; or (3) cause or contribute to vi olation of a PSD increment; o r (4) cause or contribute to any adverse impact on any for m all y recognized air quality and related values in any Class I area.

Solely for purposes of this Subparagraph (C ), (i ) determ ination of whether there is an em issions increase that actually occurred re sulting from m o dification(s) at the Unit must take in to accoun t any em issions changes relevant to the m odeling dom a in that have occurred or will occur under this Decr ee at othe r VEPCO System Units; an d (i i) no suc h incre ase f r o m a Unit will b e deem ed to have occurred if annual em issi ons of the relevant pollutant fr om all VEPCO System Units at the plant at which such Unit is located (and treating Mount S t or m and North Branch as a single

61plant for th is purpose) do not exceed such plan t’ s em issions of that po llutant, as specified in Paragraph 112. Also, introduction of any ne w or changed National Am bi ent Air Quality Standard shall not, standing al one, provide the showing needed under this Subparagraph (C) (1)- (4) to pursue any claim r e solved under Section XVI. 134. Im proved Units

. The resolution of claim s provided by Section XVI shall not apply to a modification (or collection of m odi fic a tions), if commenced after lodging of this Decree, at an Im proved Unit lo cated in W est Virginia that indi vidually (or collectively) incre a se th e m a xim u m hourly em ission rate of that Unit for NO x or SO 2 (as m easured by 40 C.F.R. § 60.14 (b) and (h)) by m ore than ten percent (10% ) of the m a xi m u m hourly emission rate for that Unit.

XVIII. OTHER PROVISIONS ON ALLOW A NCES AND CREDITS 135

. NO x Credits

. For any and all actions taken by VEPC O to conform to the requirem e nts of this Decree, VEPCO shall not use or sell any resulting NO x em ission allowances or credits in any

em ission trading or m arketing program of any kind; provided, however that: (A) NO x e m ission allowances or credits a lloca ted to the VEPCO System by the Adm i nistrator of EPA under the Act, or by any State under its SIP in response to the EPA NO x SIP Call, or the EPA Section 126 R u lem aking, or a ny other sim ilar

em issions trading or m a rketing program of any kind, m a y be used by VEPCO and its pa rent co mpany (Dom inion Resources) o r its subsidia ries or af f iliates to m eet their own federal and/or state Clean Air Act regu lato ry requ ir em ents f o r any air

em issions source owned or operated, in w hole or in part, by V E PCO or Dom i nion Resources, I n c. or its sub sidia rie s or a f f iliates and ;

62(B) VEPCO m a y trade in an y fe deral or state program any NO x em issions allowances which are generated from VEPCO’s opera ting its SCRs, or equivalent control technology, at Chesterfield Units 4, 5, and 6; or C hesapeake U nits 3 and 4; or any VEPCO Sys t em Unit on which SCR is i nstalled under Section IX (Installing Additiona l Units on VEPCO System Units), either: (1) Earlier than required by this Decr ee or other appli cable law; o r (2) At tim e periods of the year not required by this Consent Decree or by applic able la w; or (3)At a 30- Day Rolling Average E m ission Rate that is m o re str i ngent than required by this Decree. (C) VEPCO m a y tr ade in an y federal or state program NO x e m is sions allowances which

a re generated from VEPCO’s operating its SCRs, or equivalent control technology, at Mt. Storm Units 1, 2, and 3 as follows: ( 1) 100% of NOx allowances generated earlier than required by this Decree or other applicable law; or ( 2) 100% of NOx allowances generated at ti m e periods of the ye ar not required by this Conse n t Decree or b y applicable law; or (3) 50% of NOx allowances generated by achieving a 30-Day Ro lling Average Em ission Rate m ore stringent than required by this Consen t Decree. The rem a ining 50% of the NOx allowances generated m a y be us ed in accordance with Subparagraph A or be retired. 63136. Netting Lim its . Nothing in this Decree sha ll pr ev ent V E PCO from claim i ng creditab l e contem poraneous em issions decreases from e m i ssi on reductions effected by VEPCO prior to the June 30, 2001. For em is sion control actions taken by VEPCO to conform with the term s of this Consent Decree, including, but not lim ited to, im provem e nts to ESPs and FGDs, installation of FGDs, installation of SCRs, and the fuel convers ion of Possum Point Units 3 and 4, any em ission reductions generated up to the leve l necessa ry to com p ly with the provisions of this Decree (and excluding simple control equipm ent operating re quirem e nts) shall not be considered as a creditable contem poraneous em ission decrease for the purpose of obtaining a netting credit under the Act’s New Source Review program ; provided, how ever, th at noth i ng in this Decree shall b e construed to prohibit VEPCO’s seeking such treatm ent for dec r eases in em issions resulting from VEPCO’s ceasing com bustion of co al at Possu m Point Unit 3 or Possum Point Unit 4, if: (A) Such decreases are use d in VEPCO’s dem onstrating whether the conversion of Possum Point Units 3 and 4 (plus the inst allation of up to two new units 540 M W (nom inal) each, com b ined cycle electric gen e rating units at Possum Point) would result in
a net s i gn ificant em issio n s increase; and
(B ) VEPCO either (i) ins t a lls and con tinuously operates LAER on Possum Point Units 3 or 4 or (ii) dem onstrat es that the use of na tura l gas will resu lt in a net em ission s decrease; an d
(C) VEPCO also com p lies with the NOx em issions cap and other requirem e nts in Paragraph 96 for Possum Point Units 3 and 4 un der th is Dec r ee and a l so insta lls SCR controls for NO x on the new com b ined cycle un it(s).

64XIX. PERI ODIC RE P O RTING 137. Com p liance Report

. After entry of this Decree, VE PCO shall subm it to Plaintif f

s a period ic rep o rt, in com p lianc e with Appendix B, within sixty (60) da ys af ter the end of each half of the calen dar year (January throu gh June and July through Decem ber). 138. Deviations Report

. In addition to the reports requ ired by the previous paragraph, if VEPCO violates or deviates fr om any provision of this Consent Decree, V EP CO shall subm it to Plaintiffs a report on the violati on or deviation within ten (10) business days after VEPCO knew or should have known of the event. In the repo rt, VEPCO shall explain th e cause or causes of the violation or deviation and a ny m e asures taken or to be taken by VEPCO to cure the reported violation or deviation or to prevent such violation or deviations in the future. If at any tim e, the provision s o f the Decree are in cluded in Title V Perm its, consis tent with the requirements for such inclusion in the Decree, then the devi ation reports required unde r applicable Title V regulations shall be deemed to sa tisf y all the requ ir em ents of this Parag r aph

. 139

. VEPCO’s reports (Periodic and Deviations) shall be si gned by VEPCO’s Vice President of F ossil and Hydro, or, in his or her absence, V E PCO’s Vice Presiden t o f Technical Services, o r higher ranking official, and shall c ontain the following certification: I certify under penalty of law that this inform ation was prepared under m y direction o r supervis ion in acco rdance w ith a sys t em designed to ass ure th at qualified personnel prop erly gather and evaluate the inform ation subm itted. Based on my directions and m y inquiry of the person(s) who m a nage the system , or the person(s) directly re sponsible for gathering the information, the inf o rm ation subm itted is, to the be st o f m y knowledge and belief , true, acc urate, and c o m p lete. I understand that there are significant penalties for m a king m i srepresentations to or m i sleadin g the United States. 140. If any allow a nces are surrendered to any th ird party pursuant to Section VI the third 65party’s certification shall be si gned by a m a naging officer of th e third party’s and shall contain the follow ing language: I certify under penalty of law th at _____________ [na m e o f t hird party] will not s e ll, trade, o r oth e rwise ex ch ange any of the allowanc es and will n o t use any of the allowances to m eet any oblig ation im posed by any environm ental law. I understand that there are significant penalties for m a king m i srepresentations to or m i sleadin g the United States.

XX. CIVIL PENAL TY 141. W ithin thirty (30) calendar days of entry of this Consent Decree, VEPCO shall pay to the United States a civ il pen a lty of $5.3 m illion. The civil penalty shall be p a id by Electronic Funds Transfer (“E F T”) to the United States Departm e nt of Justice, in accordan ce with current EFT procedures, referencing the USAO Fi le Nu m ber ____________ and DOJ Ca se Num b er 90-5-2- 1- 07122 and the civil action case nam e and case num be r of this action. The costs of EFT shall be VEPCO’ s responsibility. Paym ent shall be m a de in acco rd ance with in structions p r ovided by the Financ ia l Litigation Unit of the U.S. Attorney’s Office for the Eas t ern Di strict of Virginia. Any funds received after 11:00 a.m

. (EST) shall be cred ited on the next business day

. VEPCO shall provide notice of paym ent, referencing th e USAO File Num ber, DOJ Case Number 90-5-2- 1- 07122 , and the civil action case nam e and case num be r, to the Departm e n t of Just ice and to EPA, as provided in Section XXIX, Paragraph 1 87 (“Notice”). Failure to tim ely pay the civil penalty shall subject VEPCO to interest accruing from the date paym ent is due until the date paym ent is m a de at the rate prescribed by 28 U.S.C. § 1961, and shall render VEPCO liable for all ch arges, costs, fees, and pe nalties estab lished by law f o r the benef it of a cred itor o r of the United States in securing paym ent.

66XXI. MITIGATION P R OJECT S 142. General

. V E PCO shall subm it for review and a pproval plans for the c ompletion of the Mitig ation Projects des cribed in this Section, co mplying with the schedu les and o t her term s of this Consen t Decree and plans for such Projects approved under this Decree

. In perform i ng these Projects, VEPCO shall spend no less than $13.9 m illion Project Dollars. VEPCO shall m a ke available the full am ount of the Project Dollars required by this Paragraph within one year of entry of this Decree. VEPCO shall maintain for review by the Plaintiffs, upon request, all docum ents identifying P r oject Dollars spent by V E PCO. All plans and reports prepared by VEPCO or by other persons pursuant to the require m e nts of this Section of the Consent Decree shall be publicly available from VEPCO, without charge. No Project Dollars m a y be m a de available or expended to undertake an obligation al ready required by law. 143. Good Faith . VEPCO shall use good f a ith efforts to s ecure as much benefit as possible for the Project Dollars expended, consistent with th e applic able r equirem e nts and lim its o f this Decree. 144. Other Project Requirem e nts

. In addition to the requirem e nts imposed for each Project specified in this Decree, includ ing Appendi x C and the approved plans, the follo wing requirem e nts shall apply. If VEPCO elects (w here such election is allowed) to undertake a Project by contributing f unds to another person or instrum e ntality to carry out the Project, that person or in strum entality m u st, in writing: (A ) id entify its leg al autho r ity for acceptin g such funding, and (B) identify its legal authority to conduct the P r oject for which VEPCO contributes the funds. Regardless of whether VEPCO elects (w here such election is allowed) to undertake

67the Project itself or to do so by contributing funds to another p e rson or instrum entality that will carry out the Project, VEPCO acknowledges that it sha ll rece ive cr edit f o r expenditur e of such funds as Project Dollars only in accordance with the approved plans. Provided however, that when VEPCO elects to undertake a P r oject by prov iding funds to a State or any instrumentality thereof, VEPCO shall receive credit for any tim ely expenditure of funds upon transfer of such funds to such State or instrum e ntality thereo f, as long as the VEPCO provides paym ent in accordan ce with Appendix C and th e approved pla n. VEPCO shall certify, as part of the proposed plan subm itted to the Plaintiffs for any c ontem plated Project, that no perso n is requ ired by any law, other than this C onsent Decree, to perform the Pr oject described in the proposed plan. W ithin sixty (60) days following the co m pletion of each approved Project, VEPCO shall subm it to the Plain tif f

s a report tha t docum ents the date that all a spects o f the projec t were im plem ented, VEPCO’s results in co mpleting th e project, including the em i ssion reductions or other environm ental or health benefits achieve d, and the Project Dollars expended by VEPCO in im ple m enting the Project. Based on consideration of these reports and th e approved plans, and any other available, relevant in formation, the United States (aft er consultation with the other Plaintif f

s) will advise V E PCO whether the Pro j e ct has m et th e requirem ents of the Decree. VEPCO shall subm it the required plans for, and com plete, each Project, as approved by the United States, and by any other Plaintiff within whose territory a Projec t would be implem ented, all a s spec if ied f u rther in Appendix C to this Decree.

68XXII. STIPULATE D P ENALTIES & ALLOWANCE OR CREDIT S U RRE NDE RS 145. W ithin thirty (30) days af ter written dem a nd from the United States, and subject to the provisions of Sections XXVI (“Force Majeur e”) and XXVII (“Dispute Resolution”), VEPCO shall p ay the f o llowing stipula t ed pen alties to the United Sta t e s (and sur r e nder the sp e cif ied

num b er of em ission allowances or credits) for ea ch f a ilure by VEPCO to com p ly with the te rm s of this Consent Decree, as follows. 146. For each violation of each lim it, rate or rem oval efficiency th at is m e asured on a 30-d a y Rolling Average or shorter av eraging period im posed on NO x , SO 2 , and PM under Sections IV, V, VII, VIII (“Possum Point” ), and I X (“Inst a l lin g Additiona l Controls on VEPCO System Units”) : (A) less th an 5% in excess of the lim it: $2,500 per day per vio l ation; (B) equal to o r g r eater th an 5 % in excess of the lim it: $5,000 per d ay per violation; (C) equal to o r g r eater th an 1 0 % in exces s of the lim it: $1 0,000 per day per violation. (D) For failure to m eet any VEPCO Sy s t em - W ide em issions requirem ent (Paragraph 59(A) and (B) “VEPCO System : Interim Control of NOX Em issions: 2004 through 2007; Paragra ph 60”VEPCO Syste m NOX Li mits 2003 and thereafter: Declin ing , System

- W ide Tonnage Caps; and Paragraph 61 VEPCO System – W i de, Annual Av erage NOX E m ission Rate): $5,000 per ton for the first 100 tons resulting fr om the violation, and $10,000 per ton for each additio nal ton resulting from the violation.

69147. Other Specif i c Failures . For f ailure to: (A) insta ll tim ely and comm ence operation tim ely of SC R on each Unit (each SCR installa tion) sp ecif i ed in Sectio n IV, Paragraph 56 (“Unit-Specific S CR Installations and Annual Perform a nc e Re quirem e nts”): (i) $10, 000 per day, per violation, for the first 30 days; and (i i) $27,500 per day, per violation, thereafter. (B) com plete any FGD i m pr ovem e nts or insta llation needed to m eet em ission lim its im pos ed under Section V, Paragraph 64 (“Construction, Upgrading, and Re m oval Efficiencies Required or on F GDs Serving Clover Units 1 and 2, Mount Storm Unites 1, 2, and 3, and Chesterfiel d Units 5 and 6"): (i) $ 10,000 per day, per violation, for the first 30 days; and (ii) $20,000 per day, per violation, thereafter. (C) surrender tim ely the annually-required 45,000 SO 2 Allowances sur r end e r under Section VI : $27,500 per day, p e r vio l ation plus the su rrender 100 addition al SO 2 Allowances per day per violation. (D) tim ely transfer the annually -required surrender of 45,000 SO 2 Allowances by VEPCO to any third party under Section VI : $27,500 per day, per violation plus the surrender 100 additional SO 2 Allowances per day per violation. (E) com p ly with any req u irem ent in this Consent Decree regard ing the use of any SO 2 or NO x allowances or credits : s u rrende r th r ee tim es the allowance s or cred its handled in violation of the requirement. (F) com p lete tim ely the proper in sta l la tion of all equipm ent called for under Section VII (PM Em ission Reductions a nd Controls) or under any plan or

70subm ission approved by EPA under Section VII : (i) $ 10,000 per day, per violation, for the first 30 days; and (i i) $20,000 per day, per violation, thereafter. (G) conduct a required stack test of PM em issions on each VEPCO Sys t em Unit where such test is required under Section VII : $1,000 per day, per violation. (H) Subm it tim ely and com p lete reports called for under Section XIX (“Periodic Reporting”) : $1,000 per day, per violation. (I) Com p lete any funding for any of th e Projects describ e d in Section XXI (Mitiga tion Projec ts) : $1,000 per day, per violatio n for the first 30 days; and $5,000 per day, per violation thereafter. 148. Violations o f any lim it based on a 30 -Day Rollin g Average c onstitu tes th irty (30) days of violation but where such a violation (for the sam e pollutant and from the sam e Unit or source) recu rs within p er i ods les s tha n thir ty (30) days, VEPCO shall not be obligated to pay a daily stipulated penalty, for any day of the recu rrence for which a stipulated penalty has already be e n paid.

XXIV. AC CESS, AND INFORM ATION COL LECTION AND RETE NTION 149. Access, Insp ection, Investigation

. Any authorized represen tative of EPA, i ncluding independent contractors, upon pres entation of credentials, shall ha ve a right of entry upon the prem ises of any facility in the VEPCO System at any reasonable tim e and for any reasonable purpose regarding m onitoring com p liance with the provisions of this Cons ent Decree, includ ing inspecting plant equipment a nd inspecting and c opying all records m a intained by VEPCO required by this Consent Decree. VEPCO shall reta in such records for a period of fifteen (15)

71years from the date of entry of this Consent D ecree. Noth ing in this C onsent Decree shall lim i t any inform a tion-gathering or inspection author ity of EPA under the Ac t, including but not lim ited to Section 114 of the Act, 42 U.S.C. Section 7414. XXV. COORDINATION OF E N FO RCEMENT & DISPUT E RESOLU TION 150. United States - E n forcem ent and Dispute Resolution . The United States m a y enforce any and all requirem e nts of this Decree and m a y invoke dispute resolution provisions of this Decree as to any requirem ent of this Decree to which di sp ute reso lutio n applies and also m a y participate in adjudication of any claim of Force Ma jeure m a de by VEPCO or any other Party. 151. VEPCO - Dispute Resolution

. VEPCO may invoke the disput e resolution provisions of this Decree over any req u irem ent of this Decr ee to which dispute resolution applies. 152. States - Enforcem ent

. Consi s tent with Section XXV, The State of New York, New Jersey, or Connecticut, or any com b inati on of them , may enforce only the following requirem e nts of this Decree: (A) those requirem e nts imposed directly on a Unit at Mount Storm , Ches terfield , and Possum Point; (B) any or all of the following VEPCO System

- W ide requirem ents: Section IV Paragraph 59 (“Interim NO x Em issions for VEPCO Syste m ” ) , Paragraph 60 (“VEPCO S ystem NO x Declining T onnage Caps”) and Paragraph 61 (“NO x System

- W ide Average E m ission Rate”] and Section VI, Paragraph 71 (A nnual Surrender of SO 2 Allowances); and (C) those requirem e nts involving tim el y and proper perform a nce of De creem a ndated mitig ation p r o j ects (Sec tio n XXI and Appendix C).

72153. The Commonwe a lth of Virginia and the St ate of W e s t Virginia may enforce all of the requir em ents of this Dec r ee app licab le to VEPCO units with in the i r r esp ectiv e jur i sd ictions, including the system -wide cap. 154. States - Dispute Resolution

. The States of New York, Ne w Jersey, Connecticut, Virginia, or W e st Virginia, or any com bination of th em , may invoke dispute re solution only over those Decree requirem ents that such State could enfo rce under this Decree a nd m a y participate as a plaintiff in any m a tter in which VEPCO assert s F o rce Majeure under th is Decree only if the

m a tter concerns a requirem e nt which such State could have enforced under the term s of this Decree. Notwithstand i n g the preced ing senten ce, the States of New York, New Jersey, Connecticut, Virginia, or W e st Virginia, or a ny com b ination of them , ma y participate as a plaintiff in any m a tter in whic h VEPCO asserts force m a jeure unde r this Decree, to the extent that resolu tion of the leg al iss u e(s ) at stake in that m a tter would affect the abil ity of New York, New Jersey, Connecticut, Virginia, or W e st Virgin ia to enforce any of the requirem e nts specified in Paragraphs 152 and 153_of this Section. 155. Consultation Among Plaintiffs

. Absent exigent circum stances, the United States, New York, New Jersey, Connecticut shall consult prio r to enforcing a requirem e nt under this Decree or prior to invoking Dispute Reso lution (Section ) for any issue, which the given State could enforce und er th is Decree. Absent exigent circ um stances, the United States, Virginia, and W e st Virginia shall consult prior to enforcing a requi rem e nt under this Decree or prior to invoking Dispute Resolution (Section XXVII) for any issue which the given State could enforce under this Decree. If such consultation reveals that, fo r any reason, the United States does not intend to

73participate, in the first instance, in either the Decree enforcement or invocation of Dispute Resolution contem plated by New Yo rk, New Jersey, or Connecticut, Virg inia, o r W est Virgin ia then the con sulta tion req u ired by this Section is n o t satisf ied u n til af ter “Se n ior Manag e m ent Level Of f i cials” of Unite d States con sult with th e “Senior Managem e nt Level Officials” of each Plaintiff intending to enf orce a requirem e nt unde r the Decree or to i nvoke dispute resolution under it. The United States shall undertake such consultation and shall complete it within twenty-eight (28) days af ter th e consu ltation with the States an d the Unit ed States d e m o nstrates that the United States do es no t in tend to par tic ipate in the activ ity contemplated by one or m ore of the States. Only for purposes of the cons ultation requirement of this S ection, “Senior Managem e nt Level Official” m eans: (A) For the United States: Director of th e Office of Regulatory Enforcement, U.S. EPA Office of Enforcem ent and Com p liance Assu rance, and Chief of the Environm ental Enforcem ent Section, U.S. DOJ Envir onm ent & Natural Resources Division; (B) For New York: Chief of the Environm ental Protection B ureau, Office of the Attorney General of the State of New York; (C) For New Jersey: Assistant Attorney Gene ral in Charge of Environm e ntal Protection, Office of the Attorney G e neral of the State of New Jersey; (D) For Connecticut: D i rector of the Envir onmental Departm e nt, Office of the Attorney General for the State of Connecticu t ; (E) For Virginia: Director of the Envir onm ental Unit, Special Prosecutions Section, Public Safety and Law Enforcem ent Divisi on, Office of the Attorney General of the Commonwe a lth of Virginia; and

74(F) For W e st Virgin ia : Directo r of th e Division of Air Quality, W e st Virginia Departm e nt of Environmental P r otection 156. Confir m a tion of Consultation

. Contem poraneous with any filing to enforce the Decree or to invoke Dispute Resolution (Section XXVII), the m oving Plaintiff shall serve on VEPCO a written sta t e m ent noting that the cons ulta tion r equ ired by this Section ha s been com p leted, unless Plaintiff is relying on the “exig ent circum stances” excep tion of this Section. If a Plaintiff invokes the “exigent circum stances” exception in lieu of completing this consultation process, that Plaintiff m ust then serve on VEPCO an expl anation of the need for acting in advance of

com pleting such consultation. “Exigent” is intend ed to have its norm a l meaning when used in this Section of the Decree, and relian ce by a Plaintiff on this excep tion is subject to review by the Court. XXVI. F O RCE MAJE URE 157. General . If any event occurs which causes or m a y cause a delay in co m plying with any provision of this Consent Decree or causes VEPCO to be in viol ation of any provision of this Decree, VEPCO shall notify the Plaintiffs in wr iting as soon as practic able, but in no event later than ten (10) business da ys following the date VEPCO fi rst knew, or within ten (10) business days following the date VEPCO should have known by the exercise of due dilig ence, th at the event caused or m ay cause su ch delay or v i olation, whichever is earlier. In this notice, VEPCO shall r e f e rence this Parag r aph of this Consent D ecree and describe the antic ipated length of time the de la y or violation m a y persist, the cause or causes of the delay or violation, the m easures taken or to be taken by VEPCO to prevent or m i nim i ze the delay or violation, and the schedule by which those m e asures will be im ple m ented. VEPCO shall

75adopt all reasonable m easures to avoid or m i ni m i ze such delays and prevent such violations. 158. Failure of Notice . Fa ilu r e by VEPCO to com p ly with the notice requirements of this Section shall render this Section voidable by th e Plaintiffs authori zed under Sections XXV (Coordination of Enforcem ent and Di spute Resoluti on) to enforce a Consent Decree requirem e nt against which VEPCO could interpose the force m a jeure assertion in question. If voided, the provisions of this Section sh all have no effect as to th e particular event involved. 159. Plaintiffs’ Response . The Plaintiffs authorized un der Sections XXV (Coor dination of Enforcem ent and Dispute Resolution ) to enfor ce a Consent Decree requirem e nt against which VEPCO could interpose the force m a jeure assertion in question sh all notify VEPCO, in writing, regarding VEPCO’s claim of a delay in perform a nce or violation within fifteen (15) business days after completion of procedures specified in Section XXV (“Enforcement Coordination”). If the Pla i ntif f

s agree that the delay in perf orm an ce or the v i ola t ion has been or will b e c aused by circum stances beyond th e contro l of VEPCO, in cluding any entity contro lled by VEPCO, and that VEPCO could not have prevented the delay th rough the exercise of due diligence, the parties shall s tipu l ate to such relief as appro priate, wh ich shall usually be an extension of the required deadlin e(s ) for every req u irem ent affected by th e delay for a period equivalent to the delay actually caused by such circum stances. Such stipul ation shall be filed as a m odification to this Consent Decree in order to be effective. VEPCO shall no t be liab l e f o r stipulated p ena lties f or the period of any such delay. 160. Disagreem ent

. If the Plaintiffs authorized under Sections X XV (Coordination of Enforcem ent and Dispute Resolution ) to enfor ce a Consent Decree requirem e nt against which VEPCO could interpose the force m a jeure asse rtion in question, do not accept VEPCO’s claim

76that a d elay or violation has been or will be c aus ed by a Forc e Majeu r e e v ent, or do n o t accep t VEPCO’s proposed rem e dy, to avoid the im position of stipulated penalties VEPCO m u st subm it the m atter to this Cour t f o r reso lution by f iling a p etition f o r d eterm ination

. O nce VEPCO has subm itted th e m a tter, the United States, and other Plaintiffs as provided in Paragraph 1 59, shall have fifteen (15) business days to file a response(s). If VEPCO subm its the m atter to this Court f o r resolutio n, and the C ourt de term ines tha t the delay in perform a nce or violation has been or will be caus ed by circu m stances beyond the co ntrol of VEPCO, including any entity contro lled by VEPCO, and that VE PCO could not have preven ted the delay or violation by the exercise of due diligence, VEPCO s hall be excused as to that event(s) an d dela y (including stipulated penalties o t h erwise app l icable ), but o n ly f o r th e period of tim e equivalent to the delay caused by such circumstances. 161. Burden of Proof

. VEPCO shall bear the burden of pr oving that any delay in perform a nce or violation of any requirem e nt of this C onsent Decree was caused by or will be c a us ed by circum stances beyond its control, including any en tity controlled by it, and that VEPCO could not have prevented the delay by the exercise of due diligence. VEPCO sha ll also bear the burden of proving the duration and extent of any delay( s) or violation(s) a ttr ibutable to such circum stanc es. An exte nsion of one com p liance date bas ed o n a particula r ev ent m ay, but will
not necess a rily, result in an extens ion of a subsequent com p liance date. 162. Events Excluded

. Unanticipated o r increas ed cos t s or expen s es associate d with the perform a nce of VEPCO's oblig ations under this Consent D ecree shall not constitute circum stances beyond the control of VEPCO or serv e as a basis for an extension of tim e under this Sec tion. However, failu re of a perm itting au thority to iss u e a neces sa ry perm it in a tim ely

77fashion m ay constitute a Force Majeu r e even t wher e the f ailure of the permitting autho r ity to act is beyond the control of VEPCO, and VEPCO has ta ken all steps available to it to obtain the necessary perm it, including, but not lim ited t o, subm itting a com p lete perm it ap plication, responding to requests for additional infor m ation by the perm itting authority in a tim ely fashion, accepting lawful per m it term s and conditions, an d pr osecutin g appeals of any allegedly unlawful
term s and conditions im posed by the perm itti ng authority in an expeditiou s fashion. 163. Potential Force Majeure Events . The parties agree that, depending upon the circum stances related to an event and VEPCO’s response to such circum s t ances, the kinds of events listed below could qualify as Force Maje ure events: constructi on, labor, or equipm ent delays; acts of God; Malfunction fo r PM as m a lfunction is defined in 40 C

. F.R. 60.2; and orders by governmental officials, acting under and authori zed by applicable law, that direct VEPCO to supply electricity in response to a legally declared, system -w ide (or state-wide) em ergency. 164. Prohibited Inferences

. N otwithstanding any other provisi on of this Consent Decree, this Court shall not draw any inferen ces nor establish any presumpti ons adverse to any party as a result of VEPCO delivering a noti ce pursuant to this Section or th e parties' inability to reach agreem ent on a dispute under this Part. 165. Extended Schedule

. As part of the r esolution of any m atter s ubm itted to this Court un der this Sec tion, the Par ties by agreem ent with app r oval from this Court, or this Court by order, m a y, as allowed by law, extend the schedule for co m p letion of work under th is Consent Decree to account for the delay in the work that occurred as a result of any dela y or violation. V E PCO shall b e liable f o r stipu l ated penalties f o r its f ailu re thereafter to com p lete the work in a ccordanc e with the extended schedule.

78XXVII. DISPUTE RESOLUTION 167. Scope of Disputes Covered and Elig ibility of Partie s to Participate . The dispute resolution procedure provided by this Section sh all be availa ble to resolv e all d i spute s aris ing und er th is Consent Decree, except as provi ded in Section XXVI (“Force Ma jeure”) or in this Section, provided that the Party m a king such applicati on has m a de a good faith attem p t to resolve the

m a t ter with the other Parties. Invocation and part icipation of this Section also shall be done in

com pliance with Section XXV (“Coo r dination of Enforcem en t and Dispute Resolution”). 168. Invocation of Procedure

. The dispute resolution proce dure required herein shall be invoked by one Party to this C onsent Decree giving written noti ce to another advising of a dispute pursuant to this Secti on. The notice shall desc ribe the nature of the dispute and shall
sta t e the no ticing party' s position w i th regard to s uch dispute. The Party receiv i ng such a notice shall acknowledge receipt of the notice, and the parties shall expe ditiously schedule a m eeting to discuss the d i spute inform ally not later than four teen (14) d a y s following recei p t of such notice. 169. Inform al Phase

. Disputes subm itted to dispute r e solu tion un der th is Section shall, in the first instance, be the subject of inform al negotia tions am ong the parties. Such period of infor m al negotiations shall no t extend beyond thirty (30) calendar days from the date of the first m eeting

am ong the Parties’ representativ es unless they agree to shorten or extend this period. 170. Form al Phas e . If the Parties are unab l e to r each agreem ent during th e inform al negotiation period, the P l aintiffs, shall provide V E PCO with a writ ten summary of their position regarding the dispute. The written position provi ded by the P l aintiffs shall be considered binding unless, within thirty (30) calendar days thereaft er, VEPCO f iles with this Court a pe titio n that

79describes the nature of the dispute and seeks resolution. The Plaintiffs m a y respond to the petition within forty-five (45) ca lendar days of filing. W here the natu re of the dispute is such that

a m o re tim ely resolu tion of the i ssue is required, the tim e periods se t out in this Section m a y be sh o rtened u pon successf ul m o tion of one of the parties to the dispute. 171. Prohibited Inference

. T his Court shall not draw a ny inferences nor establish any presum ptions adverse to either party as a result of invocation of this S ection or the parties' inability to reach agreement. 172. Alteration of Schedule

. As part of the re solution of any dispute under this Section, in appropriate circum stances the parties m a y agree, or this Court m a y order if warranted by law, an extension or m odificatio n of the schedule for completion of work under this Consent Decree to account for the delay that occurred as a result of dispute resolution. VEPC O shall be liable for stipulated p e nalties f o r its f ailure ther eaf ter to co mplete the work in acc ordance with the extended or modified schedule. 173. Applicable Standard of Law

. The Court shall decide all disputes pursu an t to applicable principles of law for resolving such disputes; provided, however, that the parties reserve their rights to argue for what the applicab le standard of law should be for resolving any particular dispute. Notwithstanding the preced in g sentence o f this Paragraph, as to d i sputes involving th e subm ittal for review an d approval u nder Section VII, the Co urt shall sus t ain the position of the United States as to disputes i nvolving PM CEMs, any Po llution Control Upgrade Analysis, and optim ization m easures for PM that should be undertaken – unless VEPCO dem onstrates that the pos ition of th e United Sta t e s is arb i trary or capriciou s.

80XXVIII. SALES OR TRANSFERS OF OW NERSHIP INTERESTS 174. Joint and Several L i ability By Tr ansfer of Certain VEPCO Property . If VEPCO proposes to sell or transfer any of its real property or operations subject to this Consent Decree, VEPCO shall adv i se th e purchaser or transferee in writing of the existence of this Consent Decree prior to such sale or tr ansfer, and shall send a copy of such writte n notification to the Plaintiffs pursuant to Section XXI X, Paragraph 187 (“Notices”) at least sixty (60) days before such proposed sale or transfer. Before closing such purchase or transfer, a m odification of this Consent Decree sh all m ake the pu rchaser or tran sferee a party defendant to this Decree and jointly and s e vera lly liab le with VEPCO f or a ll the requirem ents of this D ecree that m ay be applic able to the transf e rred or purchased property or operati ons, including joint and several liab ility with VEPCO f o r all Unit- sp ecif i c requirem e nts and all VEPCO System

- W ide requirem e nts, nam e ly: VEPCO Sys t em - W ide Annual Avera ge Em ission Rate for NO x (Section IV), SO 2 Allowance surrenders (Section VI), and VEPCO Sys t em NO x annual tonnage caps (Section IV) . 175. Option for Alternative Reque st on System

- W ide obligations . VEPCO m a y propose and the United S t ates m a y ag ree to restrict the scope of jo int and several liability of any purchaser or transferee for any VEPCO System -W id e obligations to the extent such obliga tions

m ay be adequately separated in an en for ceable m anner using the m ethods provided by or approved under Section X (“Perm its”). 176. Option for Alternative Request on Particular VEPCO Syste m Units . VE PCO also

m a y propos e, and the U n ited States m a y agree to execute, a modification that transfers responsibility for com p leting Decree-required capital im prove m ents from VEPCO to the

81purchaser of property at which the capital im provem e nt is required. 177. Standard for Reviewing a VEPCO Request

. Liability transfers sought by VEPCO under this Section of the Decree sh all be granted by the United States (or by all the Plaintiffs, as applic able ) if the relev an t Plain tif f

s agree th at: (A) The purchaser o r transferee has appropria te ly contra cted with VEPCO to assum e the obliga tions and liab i litie s applicable to the Unit; and (B) VEPCO and the purchaser or tran sfer ee have properly allo cated any em ission allowance, credit requirem ent, or othe r Decree-imposed obligation on the VEPCO System , whi c h also im pl icates the U n it to b e tran sferred. In the case o f transfers of VEPCO System Units at Chesterfield and/or Mount Storm , VEPCO’s scope of liab ility f o r eith er VEPCO System -W ide requirem e nts or for Decree-required capital im prove m e nt on Units at those plants shall not be transferred unless the States of New York, New Jersey, and Connecticu t concur with the Unit ed States’ d eterm ination to accep t liability of only the purchaser or transferee, as opposed to joint and several liability be tween VEPCO and the purch aser. 178. No lim it on contractual allocation of res ponsibility that does not affect rights of the Pla i ntif f

s . This Section of the Decree sh all no t be construed to im pede VEPCO and any purchaser or transferee o f rea l property or operations subject to this Decree from contractually allocating as between them selves the burdens of com p liance with this De cree, p r ovid ed that bo th VEPCO and such purchaser or transf eree sh all rem a in jointly and sever ally liab l e to th e Plain tif f

s for those obligations of the Decree s pecified ab ove, absent approval und er this Section of a VEPC O request to a llocate liability.

82XXIX. GE NERAL PR OVISIONS 179. Effect of Set tlem e nt

. This Consent Decree is no t a perm it; c o m p liance with its
term s does not guarantee com p liance with all appl icable Federal, State, or Local laws or regulations. 180. C rim inal Liability

. This Consent Decree does not a pply to any claim ( s) of alleged cri m inal liab ility, which are r eserv ed, nor to a ny claim s resolved and then reopened under the
term s of this Decree. 181. Lim itation on Procedural Bars to Other Claim s . In any subsequent adm i nistrative or judicial action initiated by Pl aintiffs for injunctive relief or civil penalties relating to the facilities co vered by th is Consent Decree, VEP C O shall not assert any defense or claim based upon princip l es of waiver, res judi cata, collateral estoppel, iss u e preclusio n , claim splitting, o r other defense based upon any conten tion th at th e claim s raise d by th e Plaintiffs in the subsequent proceed ing were brough t, or should have been brought, in th e instan t case; provid e d, h owever, that nothing in this Paragraph is intended to affect the validity of Sections XI through XVII (Resolution of Certain Civil Claim s). 182. Other Laws

. Except as specifically provided by this Consent Decree, nothing in this Consen t Decree sha l l re lieve VE PCO of its oblig a tion to com p ly with all app lic ab le Feder al, State, and L ocal laws and regulations. Subject to Sections X I through X V II, nothing contained in this Consent Decree shall be construed to pr ev ent or lim it the Plain tif f

s ’ righ ts to o b tain penalties or injunctive relief under th e Clean Air Act or other federal, state, or local statutes or

83regulations. 183. Third Parties

. This Consent Decree does not limit, en large, o r affect the rights of any party to this Consent Decree as against any third parties. 184. Costs

. Each party to this ac tion shall bear its own costs and attorneys' fees. 185. Public Docum e nts

. All inf o rm ation and docum ents subm itte d by VEPCO to the United States or the other Plaintiffs under this Consent Decree shall be subject to public inspection, unless subject to lega l privileges or protection or id entified and supported as business confidential, under applicable law. VEPCO m a y not seek s u ch protection con cern i ng subm ittals requir ed by the Decree th at conce r n m itigation p r ojec ts (Se ction XXI). 186. Public Comm ent

. The parties agree and acknowle dge that final approval by the United States and entry of this Consent Decree is subject to the policy statem ent reproduced at Title 28 C.F. R. § 50.7, which prov ides for notice of the lodgin g of this Consent Decree in the Federal Register, an opportunity for public co m m e nt, and the right of the Un ited States to withdraw or withhold consent if the comments disclose facts or considerations which indicate that the Consent Decree is inapp r opriate, im proper, or inadequate. 187. Notice

. Unless otherwise provided herein, notifications to or communications with the Plaintif f

s or VEPCO shall be deem ed subm itted on the date they are postm ar ked and
sent e ithe r b y overnigh t m ail, return rece ipt r equ ested, or by certified or r egistered m ail, r eturn receipt requested. Except as otherwise provided herein, when written notif ication to o r communication with the Plaintiffs or VEPCO is required by the term s of this Consent Decree, it shall be addressed as follows:

84For the United States of Am erica : Chief Environm ental Enforcem ent S ection U.S. Departm e n t of Just ice P.O. Box 7611, Ben Franklin Station Washington, D.C. 20044-7611 DJ# 90-5-2-1-07122 – and – Directo r , Air Enforcem ent D ivisio n Office of Enforcem ent and Com p liance Assuran c e U.S. Environm ental Protection Agency Ariel Rios B uilding [2242A] 1200 Pennsylvania Avenue, N.W

. Washington, DC 20460 – and – Regional Adm i nistrator U.S. EPA Region III 1650 Arch Stree t Philadelphia, PA 19106 For Comm onwealth o f Virginia : Directo r Virginia Departm e nt of Environm ental Quality 629 East Main Street P.O. Box 10009 Richm ond, VA 2 3 240-0009 For State of West Virginia : Directo r , Division of Air Qua lity Departm e nt of Environmental Protection 7012 MacCorkle Avenue SE Charleston, WV 25304 For State of New York : Bureau Chief Environm ental Protection Bureau New York Attorney General's Offic e 85120 Broadway New York, New Y o rk 10271 For State of New Jersey : Adm i nistr a tor Air and Environm ental Quality Co mpliance an d Enf o rcement P.O. Box 422 401 East State Street, Floor 4 Trenton, NJ 08625 – and – Section Chief Environm ental Enforcem ent Division of Law P.O. Box 093 25 Market S t reet, 7th Floor Trenton, NJ 08625 For State of Connecticu t : Departm e nt Head Environm ental Protection Depart m e nt Connecticut Attoreny General’s Office 55 Elm Street Hartford, CT 06106 For VEPCO : Senior Vice President – Fossil and H ydro Dom i nion Energy – Dom i nion Generation 5000 Dom i nion Boulevard Glenn Allen, VA 23060 Any Party may change either the notice recipien t or the address for providing notices to it by serving a ll o t her pa rties with a notice setting forth such new notice recipient or address. 188. Procedure f or Modification

. There shall be no m odification of this Decree unless such m odifi cation is in writing , is f iled with the Court, and eithe r : (a) bears the written approval of all of the Parties and is approved by the C ourt, or (b) is o t herw ise a llowed by applic able law. 86189. Continuing Jurisdiction

. The Court shall retain jurisdiction o f this case af ter en try of this Consent Decree to enforce compliance with the term s and conditions of this Consent Decree and to take any action necessary or ap propriate for its interpretation, construction, execution, or m odification. During the term of th is Consent Decree, any party m a y apply to the Court for any relief necessary to constr ue o r effectuate this Consent Decree. 190. Com p lete Agreem ent

. This Consent Decree cons titu tes the f i nal, com p lete, and exclusive agreem ent and understanding am ong th e parties with respec t to the settlem e nt

em bodied in this Consent Decree. T h e partie s acknowledge that there are no representations, agreem ents, or understandings relating to the set tlem e nt other than those expressly contained in this Consent Decree, including Appendices A (“ Coal-Fired Steam -Elect ric Generating Units Constitu ting the VEPCO System ”), B (“Consent Decree Rep o rting Form ”), and C (“ Mitig ation Projects that Shall be Comple ted Under this VEPCO Consent Decree”). Appendices A through C are inco rp orated into and part of this Consent Decree 191. Non-Severability Absent Re-Adoption by the Parties

. If this Consent Decree, in whole or in part, is held invali d by a court vested with jurisdicti on to m a ke such a ruling, and if such ruling becom e s a fi nal judgm ent, then after entry of such final judgm e nt, no Party shall be bound to any undertaking that would com e due or have continued under this Decree after the date of that f i nal judgm e n t, and the Decree shall be void from the entry of such final judgm ent. At any tim e, upon consent of all the Parties, the Pa rties m a y preserve that portion of this Decree not held inv a lid by ag reeing, in a writing subm itted to th is Court, to k eep in force that portion of this Decr ee not held inv alid. 192. Citations to Law

. Except as expressly provide d otherwise by this Decree,

87provisions of law expressly cited by this Decree shall b e con strued to m e an the provision cited as it is defined under law. 193. Meaning of Term s . Eve r y term expressly define d by this Decree shall have the

m eaning given to that term by this Decree, and every other term used in this Decree that is a term used under the Act or the regulations im ple m enting the Act shall m ean in this Decree what such
term m eans under the A ct or those regulations. 194. Calculating and Measuring Perform a nce . Perform a nce standards, em issions lim its, and other quantitative standards set by or unde r this Decree m u st be m et to the num b er of signif i can t d i gits in whic h the standar d or lim it is expressed. Thus, for exam ple, an Em issions Rate of 0.090 is not m et if the actual Em issions Rate is 0.091. VEPCO shall round the fourth significant digit to the nearest th ird significant digit, or the thir d significant digit to the second significant digit, depending upon whether the limit is expressed to two or thr ee significant digits. Thus, for exam ple, if an actual Em issions Rate is 0.0904, that shall be reported as 0.090, and shall be in com p liance with an Em i ssions Rate of 0.090, and if an actual Em issions Rate is 0.0905, that shall be reported as 0.09 1, and shall not be in complian ce with an Em issions Rate of 0.090. VEPCO shall collect and report data to th e num ber of significant digits in which the standard or lim it is expressed. As otherwise ap p l icable and un less th is Decree exp r ess l y direc t s otherwise, the calcu latio n and m easurem ent pro cedures established under 40 C.F.R. Parts 75 and 76 apply to the m easurem ent and calculation of NO x and SO 2 under this Decree. 195. Independent Requirem e nts

. Each lim it and / or other requirem e nt established by or under this Decree is a separa te, independent requirem e nt. 196. W r itten Statem ents to be Sent to all P l ain tiffs

. Notwithstanding any other

88provision of this Decree, VEPCO shall supply to all Parties to this Decree all notices, reports, applications, elections, and any other written statem ent that the Decree requires VEPCO to supply to any Party to the Decree. 197. Applicable Law on Data Use Still Applies . Nothing in th is Consent Decree a lte rs or waives any applicable law (including, but not lim ited to, any defenses, entitlem e nts, or clarifications related to the Credible Evidence R ule (62 Fed. Reg. 8314, Feb. 27, 1997)) concerning use of data for any purpose under the Act, generated by the reference m e thods

s pecified herein or otherwise.

XXX. CONDITIONAL TERMINATION OF E N FOR C EM ENT, C O NTIN UATION OF TERMS, AND FIRST RESO RT TO TITLE V PERMIT 198. Term ination as to Com pl e ted Tasks

. As soon as VEPCO completes any elem ent of

construction requir e d by this Decr ee or com p le tes any req u irem ent tha t will no t re c u r, VEPCO

m ay seek term ination of that portion of the Decree that dictated such requirem e nt. 199

. Conditional Term ination of En forcem ent through Consent Decree

. Once VEPC O: (A) believes it has su cce ssf ully completed and comm enced successful operation of all pollution controls (new and upgr ades) required by Decree; (B) holds fin al, Title V Perm its -- cov ering a ll Units in th e VEPCO System -- that inc l ude as enforceab le perm it term s all of the perform ance and other requirem ents for the VEPCO Sys t em as required by Section X (“Permits”), and (C) certifies that th e date is later than Decem ber 31, 2015; then VEPCO m a y f ile a notice with the Court of these facts. Unless within forty-five 89(45) days after VEPCO files such a notice, any Plaintiff objects to th e accuracy of that notice, enforcem ent based on Decree violations th at occu rred after th e filing of the notice shall be through the applicable Title V Per m it and not through this Decree. 200. Resort to Enforcem ent under this Consent Decree

. Notwithstanding paragraph 199, if enforcem ent of a provision of this Decree cannot be pursue d by a party under the applic able T itle V perm it, or if a Decr ee requ ir em ent was intended to be part of the Title V Perm it and did not becom e or re m a in part of such perm it, then such requirem e nt m a y be enforced under the term s of this Decree at any tim e.

SO ORDERED, THIS _ ________ DAY OF _______________, 2003.

________________________________________ UNITED S TATES DISTRICT C O URT JUDGE

90F O R THE UNITE D S T AT ES OF AMERICA:

T H O M A S L

. SANS O N E TTI A s s i s t a n t A t t or ne y G e ne r a l Environm ental and Natural Resources Division Justice United States Departm e nt of

THOMAS A. MARIANI A s s i s t a n t C hi e f Environm ental Enforcem ent Section Environm ental and Natural Resources Division United States Departm e nt of Justice

91JOHN P ET ER SUARE Z Assistan t Adm i nistrator Office of Enforcem en t and Com p liance Assuran ce United States Environm ental Protection Agency

BRUCE C. BUCKHEIT D i r e c t o r , A i r E nf or c e m e nt D i vi s i o n Office of Enforcem ent and Com p liance Assuran ce United States Environm enta l Protection Agency

R I C H A R D A L O N S O A t t or ne y A d vi s or A i r E nf or c e m e nt D i vi s i on Office of Enforcem ent and Com p liance Assuran ce United States Environm ental Protection Agency

- 92 -DONALD S

. W ELS H Regional Adm i nistrator Region 3 United States Environm ental Protection Agency

- 93 -FOR THE STAT E OF NEW YORK:

ELLIOT SPITZER A t t or ne y G e ne r a l S t a t e of N e w Y or k

- 94 -FOR THE STATE OF NEW JERSEY:

PETER C. HARVEY Acting Attorney General of New Jersey

- 95 -FOR THE STAT E OF CONNE CTICUT:

RICHARD BLUMENT HAL Attorney Ge neral State of Connecticut

CARMEL A. MOTHERWAY Assistan t Attorney Gene ral State of Connecticut

KIMBERLY P. MASSI COTTE Assistan t Attorney Gene ral State of Connecticut

- 96 -FOR THE COMMONWEAL T H OF VIRGINIA:

________________________________ R O G E R L

. C H A F F E Senior Assistant Attorney General Commonwe a lth of Virginia

________________________________ ROBE RT G. BURNLE Y D i r e c t o r Departm e nt of Environmental Quality Commonwe a lth of Virginia

- 97 -FOR THE STAT E OF WEST VI RGINIA:

JOHN BENEDICT D i r e c t o r Division of Air Quality West Virginia Departm e nt of Environm ental Protec tion

ROLAND T. HUSON, III Senior Counsel Office of Legal Serv ices West Virginia Departm e nt of Environm ental Protection

- 98 -FOR VIRGINIA EL E C TRI C AND POWER COMPANY:

E D W A R D R I V A S Sr . V i c e P r e s i de nt Fossil and H ydro Virginia Electric and Power Com pa ny

- 99 -

### APPENDIX A TO “VEPCO” CONS ENT DECREE THE UNI T S COMP RISING THE “VEP CO S Y STEM” IN UNITED STATES, ET AL. V. VIRGIN IA ELECTRIC AND POWER CO.

Steam Electric Generating Unit : Pla n t Nam e , Unit Num b er, Unit Abbreviation, & Nom i nal Nam e plate (“MW ”) Im proved Unit f o r SO 2 Under Decree Paragraph 64 Im proved Unit for NO x Under Decree Paragraph 56 Optim izatio n f o r PM Required under Decree Section VII 

## Bremo Unit 3 (“BR 3”) 69 M W NO NO YES Bremo Unit 4 (“BR 4”) 185 MW NO NO YES Chesapeake Unit 1 (“CEC 1”) 112 MW NO NO YES Chesapeake Unit 2 (“CEC 2”) 112 MW NO NO YES Chesapeake Unit 3 (“CEC 3”) 185 MW NO YES YES Chesapeake Unit 4 (“CEC 4”) 239 MW NO YES YES Clover Unit 1 (“CL 1”) 393 MW YES NO YES Clover Unit 2 (“CL 2”) 393 MW YES NO YES Chesterfield Unit 3 (“CH 3”) 112 MW NO NO YES Chesterfield Unit 4 (“CH 4”) 187 MW NO YES YES Chesterfield Unit 5 (“CH 5”) 359 MW Y E S Y E S Y E S Chesterfield Unit 6 (“CH 6”) 694 MW Y E S Y E S Y E S

1APPENDIX A (continued) Steam Electric Generating Unit : Pla n t Nam e , Unit Num b er, Unit Abbreviation, & Nom i nal Nam e plate (“MW ”) Im proved Unit f o r SO 2 Under Decree Paragraph 64 Im proved Unit for NO x Under Decree Paragraph 56 Optim izatio n f o r PM Required under Decree Section VII 

## Mt. Storm Unit 1 (“MS 1”) 551 MW Y E S Y E S Y E S Mt. Storm Unit 2 (“MS 2”) 551 MW Y E S Y E S Y E S Mt. Storm Unit 3 (“MS 3”) 552 MW Y E S Y E S Y E S North Branch (“NB”) 92 M W NO NO YES Possum Point Unit 3 (“PP 3”) 114 MW YES YES NO Possum Point Unit 4 (“PP 4”) 239 MW YES YES NO Yorktown Unit 1 (“YT 1”) 187 MW NO NO YES Yorktown Unit 2 (“YT 2”) 187 MW NO NO YES

2

## Appendix A: Coal Specifications for Sulfur

Unit Fuel SO2 Specification (lbs SO2/mmBtu) Fuel Sulfur Specification (lbs S/mmBtu) Fuel Sulfur Specification (% by weight) Bremo Unit 3 2.64 Bremo Unit 4 2.64 Chesa p eake Unit 2.64 Chesa p eake Unit 2.64 Chesa p eake Unit 2.64 Chesa p eake Unit 2.64 Chesterfield Unit 2.64 Chesterfield Unit 2.64 Chesterfield Unit 2.64 Chesterfield Unit 2.64 Clover Unit 1 N/A Clover Unit 2 N/A Mt. Stor m Unit 1 1.9 Mt. Stor m Unit 2 1.9 Mt. Stor m Unit 3 1.9 North Branch 4 Possum Point N/A Possum Point N/A Yor k t o wn Unit 1 2.64 Yor k t o wn Unit 2 2.64

3APPE NDI X B - REP O RTING REQUIREM ENTS VEPCO shall subm it its sem i -annual report as required by Paragraph 137 electronically and in hard copy for m . Each sem i -annual report shall be certified as required by Paragraph 139 of this Consent Decree. The sem i -annual report is in addition to all other notices and reporting obligations under the C onsent D ecree. VEPCO shall p r ovid e the following inform ation in each of the required sem i -annual reports : I . N O x Reporting Requirements A. Installation and Seasona l/Annual Operation of SCRs 1. The progress of construction (such as, if construction is not underway, the construction schedule, dates of contract execution, m a jor component delivery, and, if construction is underway, the estim ated percent of installation and estim ated construction com p letion date ) and, once construction is com p lete, the date of final installation and of acceptance testing under th e SCR contract, of SCR controls required under Para graph 56 of the Consent Decree. 2. Comm encing when 30-Day Rolling Average E m ission Rates becom e applicable, the 30-Day Rolling Averag e Em ission Rate (lbs/mmBTU) as defined in P a ragraph 5, for each operating day for each Unit u tilizing SCRs required under Paragraph 56 of the Consent Decree. 3. W ithin the f i rst r e p o r t t h a t iden tif ies a 30-Day Rolling Averag e Em ission Rate (lbs/mm B TU) for each SCR, at leas t fi ve (5) ex am ple calculations (inclu ding raw CEM data in e l ec tro n ic f o rm at for the c a lcu l ation ) u s e d t o d e t e r m ine the 30-Day Rolling Average Em ission Rate. If at an y tim e VEPCO changes any aspect within the m e thodology used in determ ining the 30-D a y Rolling Average Emission Rate, VEPCO shall ex p l ain th e change an d the reason for using the new m e thodology. 4. All instances, and explain events, th at cause deviations from any 30-Day Rolling Ave r age Em ission Rate in lbs/ mmBTU required in Paragraph 56. VEPCO shall identify any corrective actions taken in response to such deviation. 5. A description of the how VEPCO m e t the SCR perform a nce efforts required in Paragraph 57 (Best Efforts). B. Interim Con t rol of NO x Em issions 1. In addition to the notice required under paragraph 59, within each sem i -annual report covering activities in 2004 through 2007, identify the com p liance option selected as between Paragraph 59( A) and 59(B) for that given year and

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-the date tha t the notif ication requ ired in Paragr aph 59 was subm itted to the Plaintiffs, if any such notificati on is required under Paragraph 59. 2. If VEPCO implem ents option (A) unde r Paragraph 59, report which Unit or Units will utilize year-ro und SCR co ntrol(s) and the am o u n t o f M W repres ented by the iden t i f i e d U n i t s a nd report for each Unit controlled with year-round SCR the 30-Day Rolling Averag e E m ission Rate (lbs /mmBTU) as defined in P a ragraph 5 for each operating day. 3. If VEPCO implem ents option (B) u nder Paragraph 59, the Seasonal System

W i de Em iss i on Rate (lbs/mmBTU) as defi ned in Paragraph 44, within the first report tha t identif ies a Seasonal Sys t em Wide Em ission Rate, provide at least five (5) example calculations (including r a w C E M d a t a i n e l e c t r o n ic f or

m at for the calcu lations) us ed to determ ine the Season al System W i de Em ission Rate. If at any tim e VEPCO changes any aspect within the methodology used in dete rm ining the Seaso n al System -W ide Em ission Rate, V E PCO shall explain the change and the r eason for using the new m e thodology. C. Annual NO x System

- W i d e Requirem e nts 1. W ithin the last report for any given y ear for which a report is due, report the tota l NO x em issions from the VEPCO Syst em , a n d f o r e a c h V E P C O S y s t e m Unit, for the calendar year covered by the report as tons per year. 2. W ithin the last report for any give n year for which a report is due, commencing in 2013, report the System Wide Annual Em i s s i o n R a t e a n d t h e underlying calculation for the VEPCO Syst em f o r t h e p r e v i o u s c a l e n d a r y e a r (starting with the year 2013) as lbs/mmBTU. D. Miscellan e o us NO x P r o v i s i o n s 1. For each Unit in the “VE P CO System ” that utilizes SCR control pu rsuan t to a requirem e nt of the Consent Decree, all NO x em issions (in tons) excluded from any NO x e m ission calcu l ation, as perm itted in Paragraph 5 an d an explanation for excluding such em ission, as specified in subparagraph 2, below. The requirem e nt to report tons of e m issi ons excluded, but no other provisions, shall expire on Decem be r 31, 2015. 2. Comm encing when any VEPCO System Unit becom e s subject to a 30 -Day Rolling Average Em issions Rate for NO x and utilizes an SCR pursuant to a requirem e nt of the Consent Decree, V E PCO shall report:

a. The date and tim e that the fire is extinguished;

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-b. The date an d tim e that the Unit is re started and the date and tim e that the Unit is synchronized with an ut ility ele c tr ic d i stribu tion sy stem after the res t art; c. The NO x emissions em itted by the Unit pr ior to the tim e that the Unit was synchro n ized with a n utility electric distribution system ; d. On the fifth and subsequent Cold Start Up Periods that occur within any 30-Day period, the earlier of the d a t e a n d t i m e t h a t ( 1 ) i s e i g h t hours after the Unit is synchronized w ith a utility elec tric distribution system , or (2) the flue gas has reached the SCR operational tem p erature as specified by the cataly st m a nufacturer;

e. The NO x em issions emitted during the fi fth and subsequent Cold Start Up Periods; f. Identification of the date, tim e and duration of any period w h en em issions are excluded due to a m a lfunction of the SCR, as provided by Paragraph 5, and supporting inform ation regarding the m a lfunction, the cause, and corrective actions taken, and the amount of NO x em i s s i o n s du r i n g t h e m a lfunction. E. Possu m Point The tons of NO x from Possum Point Units 3 and 4 rolled daily as determ ined by Paragraph 96. II. SO 2 Reporting Requirements A. SO 2 Re m o val Efficiency Requirements 1. The progress of construction and im provem e nt (such as, if co nstruction is not underway, the dates of contract ex ecution, the estim at ed percent of installation, and m a jor com ponent de livery) and, once construction and im prove m e nt is com pl e t e , t h e d a t e o f f i n a l i n s t a l l a t i o n , i m provem e nt, and operation of FGDs required under Paragra ph 64 of the Consent Decree, and of initial perform a nce testing, if any. 2. Comm encing when any 30-Day Rolling Average Rem oval Efficiency for SO 2 becom e s applicab le for each FGD as defined in Paragraph 6 4, the 30-Day Rolling Average Rem o val Efficiency for SO 2 for each operating day. 3. W ithin the f i rst r e port tha t iden tif ies a 30-Day Rolling Averag e Rem oval Efficiency for each FGD, at leas t five (5) ex ample calcula t ions (inc luding raw CEM data in electronic form at for the calcu lation s) used to d e term ine the 30- Day Rolling Average Re moval Ef f i ciency f o r SO 2 . If at any tim e VEPCO

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-changes any aspect within the m e thodology used in determ ining the 30-D a y Rolling Average Rem oval Efficiency for SO 2 , VEPCO shall explain the change and the reason for using the new m e thodology. B

. S O 2 Em ission Rate 1. For Clover Units 1 & 2, Mt. Storm Units 1, 2, & 3 and Chesterfield Units 5 & 6 upon qualifying for a 30-Day Rolling Average Em ission Rate as provided in Paragraph 66 of the Consent Decree, the 30-Day Rolling Average Em ission Rate (lb s /mmBTU), as defined in P a ragraph 5, for each operating day for each Unit qualifying for the S O 2 em ission rate. 2. W ithin the f i rst repor t th at iden tif i e s a 3 0

- D a y R o l l i n g A v e r ag e Em ission Rate for each FGD, at least five (5 ) exam ple calculations (including raw CEM data in electronic form at for the calcu lations) used to determ ine the 30-D a y Rolling Average Em ission Rate. If at any tim e VEPCO changes any asp ect within the methodology used in dete rm ining the 30-Day Rolling Average Em ission Rate, VEPCO shall explain the change and the reason for using the new m e thodology. 3. A description of the how VEPCO m e t the FGD perform a nce efforts required in Paragraph 69 (Best Efforts). C. FGD Bypas s Days at Mt. Stor m (Consent Decree Paragraph 67) 1. For each FGD outage or FGD downtim e at Mt. Storm Units 1, 2 or 3, as allowed under Paragraph 67, the following information:

a. The date and tim e the outage/downtim e began; b. The date an d tim e that the FGD that was of f l i n e w a s r e t u r n e d to operation and the duration of the FGD outage/downtim e; c. A narrative explanation of correctiv e or m a intenance actions taken by VEPC O; d. The tota l SO 2 em itted f r om the Unit during th e F G D outage/dow ntim e; e. The total amount of SO2 e m ission, in tons, that would have been em itted at th e Unit dur in g the FGD outage/downtim e had VEPCO burned coal with the sulfur cont ent required by the Consent Decree, during the FGD outage/downtim e; f. The am ount of allowances to be su rrendered and provide evidence that VEPCO surrendered to EPA the am ount of SO 2 Allowances required to be surrendered under Paragraph 67; g. Report that the Unit with the FGD outage/downtim e was not dispatched ahead of the other Moun t Storm Units or the Clover Power Station Units during the FGD outage/ downtim e and the dispatch order

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-for each Unit of the VEPCO System during th e FGD outage/dow ntim e; and h. By Unit, a year-to-date tabulati on of the num ber and duration of FGD outages/downtim e at Mt. Storm Un its 1, 2, & 3, and the total am ount of

FGD outage/downtim e perm itted by the Consent Decre e f o r tha t year. D. Miscellan e o us SO 2 Provisions 1. Comm encing when any VEPCO System Unit becom e s subject to a 30 -Day Rolling Average Rem o val Efficiency or Em ission Rate requirem ent for SO 2 , for each Unit in th e “VEPCO System ” that utilizes FGD control pu rsua nt to a requirem e nt of the Consent Decree, w hen a Unit is taken out of service and the fire in the boiler is extingui shed during the reporting period:

a . The date and tim e that the fire is extinguished; b. The date an d tim e the Unit is res t ar ted; c. T h e d a t e a n d tim e that the Unit is sy nchronized with an utility electric distribution system after the restart; and d. SO 2 em issions em itted by the Unit prior t o t h e t i m e that the Unit was synchronized with a utility electr ic distribution system , ending on Decem ber 31, 2015. 2. W ithin the last repo rt f o r a ny given year, report the total SO 2 em issions from the VEPCO System for the calend a r y e a r covered by the report as tons per year, and for each Unit in the VEPCO System , r e port the an nual SO 2 em issions in tons per year for the calendar year covered by the report. E. Annual Surrender of SO 2 Allowances 1. Beginning in 2013, whether it m a de the annual SO 2 allowance surrender required by the Consent Decree to the U.S. EPA and shall provide docum entation verifying this surrender. 2. If VEPCO surrende rs th e SO 2 allow a nces to a th i r d p a r t y, th e f o llowing inf o rm ation:

a. The identity of the third

- party r ecip i e n ts(s ) of the SO 2 allowances and a listing of the serial numbers of the transf er

red allowance s ; b. A certif ic ation f r om the third

- par t y r ecipient( s) that it (th e y) will not sell, trad e or otherwise e x change any of the allow a nces and w ill no t use any of the allowances to m eet any obligation im posed by any law. c. W ithin 12 months after the first re port of the transfer, VEPCO shall provide docum entation that the thir d-party recipients(s) of the SO 2 allowance s perm anently surrende red the allowan c es to U.S. EPA

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-within one y ear af te r VEPCO tran sferred th e allo wances the thirdparty recipient(s). F. Super-com pliance Trading of Allowances 1. The am ount of SO 2 Allowances and NO x e m ission allowances or credits used or trad ed pursuant to Paragraph 75 and Section XVIII a nd the calculations or data justifying the generation of the used or traded allowances or credits. III. PM Requirements A. Use of PM Controls Existing at th e Tim e t h e D e c r e e w a s E n t e r e d a n d P M E m issions Rate 1. U n t i l a U n i t i s s u b j e c t to a PM em i ssions rate pu rs uant to this Consent Decree, th e following in for m ation for each Unit:

a. The calendar days on which the ES P was not operating at any tim e that the Unit was in opera tion ; b. If, in accord ance with Paragraphs 78 and 79, an ESP or portio n thereof fails, does not perform in accordance with the equip m ent m a nufacturer’s specifications or is shutdown by VEPCO, the calendar date of each such instance, the tim e that the failure or inad equ a te perform a nce of the ESP began, al l corrective actions undertaken by VEPCO and the calendar date and tim e t h a t t h e E S P w a s r e s t o r e d t o the m ode of operation required by Paragraphs 78 and 79. VEPCO shall also report any add ition a l co rrective actions u n d e r t a k en in response to the event. 2. For each Unit in the VEPCO System at which a PM em ission rate applies pursuant to this Consent Decr ee, th e f o llowing in f o rm a t i o n :

a. The PM Emission Rate (lbs/mm B TU) for the Unit, determ ined under the Consent Decree; b. If, in accord ance with Paragraphs 78 and 79, an ESP or portio n thereof fails, or does not perform in accord ance with th e equipm ent m a nufacturer’s specifications, th e ca lendar date o f each such instance, the tim e that the f a ilu re o r sub- par perfor m ance of the ESP began, all corrective actions undertaken by VE PCO and the calendar date and tim e that the ESP was restored to the m ode of operation required by Paragraphs 78 and 79. VEPCO sha ll also report any additional corrective actions undertaken in resp onse to th e e v ent.

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-3. Inform ation required to be reported w ithin the approved PM optim ization plans. 4. A description of the how VEPCO m e t the PM control device perform a nce efforts required in Paragraph 78 (Best Efforts). B. PM CEMs 1. For each P M CEM installed on a Unit in the V E PCO System :

a. If the PM CEM was installed during the reporting period, the date of insta lla tion of the PM CEM; b. The dates that the PM C E M operated; c. If the PM CEM did not operate continuously throughout the quarter without interruption whenever the Unit it serves was operating, the d a t e a n d t i m e t h a t t h e P M CEM was not operating, a description of the cause of the PM CEM’s outage, the steps taken by VEPCO to fix the PM CEM, any additional correctiv e actions undertaken by V E PCO in response to the event and the tim e and date that the PM CEM was return ed to s e rvic e. C. Perform a nce Testing/Monitoring of PM Em ission 1. For each Unit in the VEPCO System :

a. If the Unit was required to perform a stack tes t pursuant to the Consent Decree, th e executive su mmary a nd results of the stack test; b. If the Unit has a PM CEM, the three-hour average em ission rate for PM em issions (or such longer period as is specified in any applicable PM em issions lim itation requir e m e nt), in lb /mmBtu. IV. Deviation Reporting A. In addition to reporting under Paragra ph 137, a summ ary of a ll deviations that occurred during the reporting period and the date that the deviation was initially reported under Paragraph 138. B. W ithin each deviation report subm itted under Paragraph 138, the followin g inform ation: 1. The Consent Decree requirem ent under wh ich the deviation occurred, with a reference to the Consent Decree pa ragraph containing the requirem ent; 2. The date an d tim e that the deviation occurred;

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-3. The date an d tim e that the deviation was corrected; 4. The data, calculations or other info rm ation indicating that a deviation occurred; an d 5. A narrative description of the cause or suspected cause of the deviation, the steps taken by VEPCO to correct the de viation and any additional corrective actions taken by VEPCO in response to the deviation. V. Mitigation Project Reporting A. The progress such as the schedule for co m pletion of the project dates of contract execution, and estim ated percent of co m pletion of the Mitigation Projects required in Section XXI of the Consent Decree. B. The am ount of Project Dollars expended on Mitigation Projects. VI. VEP C O Submissions A list a ll p l a n s or subm issions and th e date subm itted to the Plaintif f

s f o r the reporting period, and identify if any are pe nding the review a nd approval of the Pl ai nti ff. VII. VEPCO Capital Projects A list of all Capital Expenditures pe rform e d throughout the VEPCO Sys t em on the Boile r Is lands in o r d er to de term ine m eeting the thresh o l d estab lished in Paragraphs 111, 124, and 133. VIII. Additional Informatio n Provide a response to any reasonable reque st by the Plaintiffs for any additional inform ation regarding thes e reporting requirem e nts or the obligations and requirem e nts of this Consent Decree.

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-APPENDIX C – MITIGATION PROJECTS REQUIREMENTS

In com p liance with and in addition to the requi rem e nts in Section XXI of the Consent Decree, VEPCO shall com p ly with the requirem e nts of this Appendix to ensure that the benefits of the environm ental m itigation protects are achieved. No Party m a y subm it a proposed plan for a m itigation project until af ter entry of the Consent Decree. I. Clean Diesel, Idle Reduction and School Bus Retrofit Project - To Be Conducted w i thin the District of Columbia, Delaw a re, Maryland, Pennsylvania, Virginia and West Virginia and Resource Lands Project A. W ithin 90 days after entry of the Consent Decree, VEPCO shall subm it a plan to EPA for review and approval for the com p letion of the Clean Diesel, Idle Reduction and School Bus Retrofit Project in which VEPCO shall spend no less than $2,500,000 Project Dollars to retrofit diesel engines with em ission control equipm ent, replace diesel engines with cleaner engines, subsidize the use of clean diesel f u els or install equipm ent or im plem ent strategies that will reduce engine idling in the above listed jurisdictions. B. The plan shall satisf y the f o llowing criteria: 1. Involve fleets located in geographically diverse areas and/or fleets operated in nonattainm e nt areas or areas at significant risk of nonattainm e nt status within the listed states, taking into account other clean diesel projects called for under this Decree. 2. Provide for the retrofit of high em itting, in service heavy-duty diesel engines with verified em issions control equipm ent. Retrofit technology m a y include but not be lim ited to oxidation catalysts and particulate m a tter filters that will reduce particulate m a tter and hydrocarbon em issions. 3. Provide for the replacem ent of engines with those that m eet the 2007 engine standards and/or are equipped with verified em ission control technology. 4. Involve vehicles that are located in areas in which ultra low sulfur diesel fuel (ULSD) is already available or is scheduled to becom e available and where such fuel is required for retrofit technology. For affected m

unicipalities, school districts or sim ilar local governm e nt entities whose f l eet will be retrof itted, the plan m a y provide f o r (a) the procurem ent of tanks or other infrastructure required enabling that fleet to obtain and use ULSD and (b) offsetting higher fuel costs from the requirem e nt to use ULSD. 5. Provide for the use of alternative diesel fuels that reduce em issions of particulate m a tter, nitrogen oxides and/or hydrocarbons including but notlim ited to em ulsions and biodiesel fuels. 6. Provide for the installation of verified idle reduction technology and/or idle reduction strategies that effectively reduce em issions from idling engines through equipm ent such as electrification stations and/or im plem entation of outreach and education program s to im plem ent policies that reduce idling tim e. 7. Account for hardware and installation costs, and m a y provide also for increm ental m a intenance costs and/or costs of repairs on such hardware for a period of up to four years after installation. 8. Lim it recipients of retrof its to f l eets that legally bind them selves to m a intain any equipm ent installed in connection with the project during and after com p letion of the project. 9. Establish m i nim um standards for any third-party with whom VEPCO m i ght contact to carry out this program that include prior experience in arranging vehicle retrofits, ULSD purchases, anti-idling cam paigns, etc. and a record of prior ability to interest and organize fleets, school districts, com m unity groups, etc. to join a clean diesel program

. 10. A schedule for com p leting each portion of the project. C. W ithin 180 days after entry of the Consent Plans, VEPCO shall subm it a plan to EPA for review and approval for the identification, acquisition, restoration, m a nagem e nt and/or preservation of resource lands to m itigate or com p ensate f or lost service uses possibly resulting from past power plant em issions in which VEPCO shall spend no less than $500,000. The proposed plan shall satisfy the f o llowing criteria: 1. Provide a m eans for the identification of available resource lands which m a y be used to m itigate any past im pacts of acid rain deposition or other possible effects of power plant em issions and assess the value of such lands in providing such benefits as contributing to carbon sequestration, restoring forest productivity and other relevant factors. 2. Establish a process for carrying out the plan, including the identification of

resources, staf f and/or other entities charged with project execution, m a nagem e nt and oversight during the term s of the Decree, and develop a related schedule for com p leting each portion of the project. 3. W ithin 180 days after approval of the proposed selection process identify particular plots of land that are consistent with the specif i cations outlined. 4. Subm it the identified plots of land with recom m e nded selection criteria

2within a reasonable period of tim e. Develop legal options for acquiring, restoring and assuring the continued preservation of identified lands. D. Perform a nce - Upon approval of plan by the United States, VEPCO shall com p lete the m itigation project according to the approved plan and schedule.

II. Solar Photovoltaic (PV) Project – To Be Conducted in New York State A. New York shall propose to VEPCO and the U.S. a plan using $2.1 m illion to accom p lish the installation of solar photovoltaics (“PVs”) on m unicipal buildings in New York. These building would then use the PV-generated energy, in part to help rem ove som e dem a nd for energy from the electrical grid during peak dem a nd periods. The project will be adm i nistered through the New York State Energy Research and Developm ent Authority = s (NYSERDA) Solar Photovoltaics program . B. New York’s proposed plan m u st: 1. Describe how the work or project to be perform e d is consistent with requirem e nts of Section II.A, above; a) Include a general schedule and budget (for $2.1 m illion) for com p letion of the work; including paym ent instructions for VEPCO’s subm ission of funds to the State, along with a requirem e nt of periodic reports to all Parties on the progress of the work called for in the proposed plan through com p letion of the project; b) Describe generally the expected environm ental benefit for project or work called for under the proposed plan; and c) Describe briefly how work or project described in the proposed plan m eets the requirem e nts of Section XXI of the Decree. C. VEPCO’s obligation f o r this project shall term inate once a plan exists f o r this project or work and VEPCO has transferred at least $2.1 m illion to New York to com p lete the project or work described in the plan. VEPCO shall transfer this sum as soon as possible after the proposed plan is developed but no later than Decem ber 31, 2003, unless untim ely subm ission of the proposed plan or m a terial deficiency in such plan requires paym ent after that date. D. If New York (or NSYERDA) is later unwilling or unable to perf orm the project specified here, then New York, in consultation with VEPCO, shall select an alternative project or projects designed to accom p lish the sam e kinds of goals as intended for this project. After proceeding through this proposed plan process
3for the alternative project, VEPCO shall fund such project or projects in the am ount of $2.1 m illion.

III. Mitigating Harm to Health Related to Air Pollution in New Jersey and New York: Public Transit -- Diesel Bus Catalyz e d Particulate Filters

A. New Jersey shall supply to VEPCO and the U.S. a plan to use $2.7 m illion to accom p lish the installation of catalyzed particulate filters (CPFs) on late-m odel conventional diesel buses used to transport com m u ters from various locations in the State of New Jersey into New York City. Operating exclusively on ultra-low sulfur diesel f u el, these CPF-equipped buses will f u rther signif i cantly reduce harm f ul em issions of carbon m onoxide, hydrocarbons, and particulate m a tter in both New Jersey and New York. The project will be adm i nistered by the New Jersey Transit Corporation.

B. New Jersey’s proposed plan m u st:
1. Describe how the work or project to be perform e d is consistent with requirem e nts of Section III.A, above; 2. Include a general schedule and budget (for $2.7 m illion) for com p letion of the work, including paym ent instructions for VEPCO’s subm ission of funds to the State, along with a requirem e nt of periodic reports to all Parties on the progress of the work called for in the proposed plan through com p letion of the project; 3. Describe generally the expected environm ental benefit for project or work called for under the proposed plan; and 4. Describe briefly how the work or project described in the proposed plan m eets the requirem e nts of Section XXI of the Decree.

C. VEPCO’s obligation f o r this project shall term inate once a plan exists f o r this project or work and VEPCO has transferred at least $2.7 m illion to New Jersey to com p lete the project or work described in the plan. VEPCO shall transfer this sum as soon as possible after the proposed plan is developed but no later than Decem ber 31, 2003, unless untim ely subm ission of the proposed plan or m a terial deficiency in such plan requires paym ent after that date. IV. School Bus Retrofit Project – To be Conducted in the State of Connecticut

A. The State of Connecticut will supply VEPCO and the U.S. a plan to use $1.1 m illion to purchase and install particulate filters for diesel school buses that operate in selected urban com m unities in that State. The proposed plan m a y include any com b ination of the following: (i) convers ion of conventional diesel-powered, school buses to buses with particulate traps, (ii) pr ocuring of ultra-low sulfur diesel fuel (and 4necessary infrastructure) to power for up to three years buses converted in the m a nner described in (i), and/or (iii) install additional air pollution controls on such buses. The proposed plan will be lim ited to pollution control devices, fuels, and other m easures needed to convert diesel buses to include CRT or other particulate traps and other controls (including support infrastructure). B. Connecticut’s proposed plan m u st: 1. Describe how the work or project to be perform e d is consistent with requirem e nts of Section IV.A, above; 2. Include a general schedule and budget (for $1.1 m illion) for com p letion of the work, including paym ent instructions for VEPCO’s subm ission of funds to the State, along with a requirem e nt of periodic reports to all Parties on the progress of the work called for in the proposed plan through com p letion of the project; 3. Describe generally the expected environm ental benefit for project or work called for under the proposed plan; and 4. Describe briefly how the work or project described in the proposed plan m eets the requirem e nts of Section XXI of the Decree. C. VEPCO’s obligation f o r this project shall term inate once a plan exists f o r this project or work and VEPCO has transferred at least $1.1 m illion to Connecticut to com p lete the project or work described in the plan. VEPCO shall transfer this sum as soon as possible after the proposed plan is developed but no later than Decem ber 31, 2003, unless untim ely subm ission of the proposed plan or m a terial deficiency in such plan requires paym ent after that date. V. School Bus Retrofit Program to be Carried Out in Commonw ealth of Virginia A. Com m onwealth of Virginia shall supply to VEPCO and the U.S. a plan to use $2.0 m illion to accom p lish any com b ination of the following concerning in-service dieselpowered school buses in the Com m onwealth: retrofitting buses with pollution control devices and techniques and infrastructure needed to support such retrofits, engine replacem ents that will reduce em issions of particulates or ozone precursors, and changeover to CNG fuel or low diesel fuel

. These projects are to be carried out in areas either non in attainm e nt with am bient air quality standards in the Com m onwealth or at risk of being reclassified as nonattainm e nt, such as Fairfax, Ham p ton Roads, and Virginia Beach B. Com m onwealth’s proposed plan m u st:
1. Describe how the work or project to be perform e d is consistent with requirem e nts of Section V.A, above; 2. Include a general schedule and budget (for $2.0 m illion) for com p letion of 5the work, including paym ent instructions for VEPCO’s subm ission of funds to the Com m onwealth, along with a requirem e nt of periodic reports to all Parties on the progress of the work called for in the proposed plan through com p letion of the project; 3. Describe generally the expected environm ental benefit for project or work called for under the proposed plan; and 4. Describe briefly how the work or project described in the proposed plan m e ets the requirem e nts of Section XXI of the Decree.

C. VEPCO’s obligation f o r this project shall term inate once a plan exists f o r this project or work and VEPCO has transferred at least $2.0 m illion to the Com m onwealth to com p lete the project or work described in the plan. VEPCO shall transfer this sum as soon as possible after the proposed plan is developed but no later than Decem ber 31, 2003, unless untim ely subm ission of the proposed plan or m a terial deficiency in such plan requires paym ent after that date VI. Protecting Forests and other Natural Resources in West Virginia’s Cheat Gorge / Big Sandy Area.

A. The State of W e st Virginia will supply VEPCO and the U.S. a $2.0 m illion proposed plan for the purchase and m a intenance of property and/or conservation easem ents that would preserve forests and other environm entally sensitive areas in and around the Cheat Gorge / Big Sandy area of the W e st Virginia, for the purposes of m a king or expanding a public wildlife m a nagem e nt area in the State and thus preserving an im portant sources of carbon sequestration. The proposed plan also will include needed steps for securing and m a intaining valid conservation easem ents under applicable law and f o r securing clear title, as applicable.

B. W e st Virginia’s proposed plan m u st:
1. Describe how the work or project to be perform e d is consistent with requirem e nts of Section VI.A, above; 2. Include a general schedule and budget (for $2.0 m illion) for com p letion of the work; including paym ent instructions for VEPCO’s subm ission of funds to the State or its designee, along with a requirem e nt of periodic reports to all Parties on the Progress of the work called for in the proposed plan through com p letion of the project; 3. Describe generally the expected environm ental benefit for project or work called for under the proposed plan; and 4. Describe briefly how work or project described in the proposed plan m eets the requirem e nts of Section XXI of the Decree.

C. VEPCO’s obligation f o r this project shall term inate once a plan exists f o r this project 6or work and VEPCO has transferred at least $2.0 m illion to W e st Virginia or its designee. VEPCO shall transfer this sum as soon as possible after the proposed plan is developed but no later than Decem ber 31, 2003, unless untim ely subm ission of the proposed plan or m a terial deficiency in such plan requires paym ent after that date.

D. If W e st Virginia is unwilling or unable to perf orm the project specif ied here, W e st Virginia, in consultation with VEPCO, shall select an alternative project or projects designed to accom p lish the sam e kinds of goals as intended for this project. After proceeding through this proposed plan process for this alternative project(s), VEPCO shall fund such project or projects in the am ount of $2.0 m illion. VII. National Park Service Alternativ e-Fueled and Hybrid Vehicles Project.

A. The National Park Service will supply VEPCO a plan for using $1.0 m illion in accordance with the Park System Resource Protection Act, 16 U.S.C Section 19jj, to im prove air quality in and about the Shenandoah National Park, either by securing alternative-fueled vehicles for trial use in and around the Park (including necessary ancillary equipm ent such as a f u eling station) or f o r im plem enting another project also intended to reduce dam a ge to those resources caused by air pollution suffered by the Park.

B. NPS’s proposed plan m u st:
1. Describe how the work or project to be perform e d is consistent with requirem e nts of Section VII.A, above; 2. Include a general schedule and budget (for $1.0 m illion) for com p letion of the work; including paym ent instructions for VEPCO’s subm ission of funds to the Natural Resource Dam a ge and Assessm ent Fund, along with a requirem e nt of periodic reports to all Parties on the Progress of the work called for in the proposed plan through com p letion of the work. 3. Describe generally the expected environm ental benefit for project or work called for under the proposed plan; and 4. Describe briefly how work or project described in the proposed plan m eets the requirem e nts of Section XXI of the Decree.

C. VEPCO’s obligation for this project shall term inate once an approved plan exists for this project or work and VEPCO has transferred at least $1.0 m illion to the Natural Resource Dam a ge and Assessm ent Fund. VEPCO shall transfer this sum as soon as possible after the proposed plan is approved but no later than Decem ber 31, 2003, unless untim ely subm ission of the proposed plan or m a terial deficiency in such plan requires paym ent after that date.

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## State Con se n t Ord er sT h i s page i n t en t i o n al l y l ef t b l an k.west virginia department of environmental protection

Division of Air Quality 601 5Th Street SE Charleston, WV 25304 Phone: (304) 926-0475 Fax: (304) 926-0479 Joe Manchin 111, Governor Stephanie R. Timmermeyer, Cabinet Secretary www.wvdep.org

CONSENT ORDER ISSUED UNDER THE AIR POLLUTION CONTROL ACT WEST VIRGINIA CODE, CHAPTER 

### 22, ARTICLE 

### 5, SECTION 

### 4

TO: ALLEGHENY ENERGY SUPPLY CO., LLC DATE: April 9,2008 MONONGAHELA POWER CO. 800 Cabin Hill Drive Greensburg, PA 1560 1 ORDER NO.: CO-SIP-C-2008-5 FACILITY ID NO.: 033-0001 5

INTRODUCTION

This Consent Order is issued by the Director of the Division of Air Quality (hereinafter "Director"), under the authority of West Virginia Code, Chapter 22, Article 5 

### , Section 1 et seq. to Allegheny Energy Supply (hereinafter "Allegheny").

FINDINGS OF FACT In support of this Order, the Director hereby finds the following: 1. Allegheny Energy Supply operates and jointly owns with Monongahela Power Co., the Harrison Power Station, an electric generating facility, located in Haywood, West Virginia. 2. The facility is equipped with three 

### (3) electric generating units, Units 1,2 and 3, each rated at 640 megawatts, and equipped with selective catalytic reduction (SCR) emission control technology. 3. According to EPA, for states that are subject to the Clean Air Interstate Rule (CAIR) annual nitrogen oxide (NO,) emissions reduction requirements and fulfill those requirements entirely through electric generating unit (EGU) emission reductions, the 

### Promoting a healthy environment.Allegheny Energy CO-SIP-C-2008-5 Harrison Power Station (033-00015) Page 2



### Clean Air Fine Particle Implementation Rule [72FR20623,25APR2007] includes a presumption that compliance by EGU sources with an EPA-approved CAIR state implementation plan (SIP) or 

### a CAIR federal implementation plan (FIP) satisfies the NO, Reasonably Available Control Measures (RACM) requirement, including the Reasonably Available Control Technology (RACT) requirement, for the fine particle national ambient air quality standard (PM2,5 NAAQS). However, that presumption only applies if such sources with existing selective catalytic reduction (SCR) emission control technology installed on their boilers operate that teclmology on a year-round basis, beginning in 2009. 4. The State of West Virginia is subject to the CAIR annual NO, emissions reduction requirements and has implemented 45CSR39 

### - Control of Annual Nitrogen Oxide Emissions to Mitigate Interstate Transport of Fine Particulate Matter and Nitrogen Oxides 

### - which fulfills the annual NO, reduction requirements entirely through EGU emission reductions.



### ORDER FOR COMPLIANCE Now, therefore, in accordance with Chapter 22, Article 

### 5, Section 1 et seq. of the West Virginia Code, it is hereby agreed between the parties, and ORDERED by the Director: Allegheny shall operate the SCRs on Units 1,2 and 3 beginning January 1,2009, whenever the units are in operation, except for periods of required SCR maintenance.



### OTHER PROVISIONS 1. Under this Order and conditioned upon the Findings of Fact set forth above, Allegheny: a) hereby waives its right to appeal this Order under the provisions of Chapter 22, Article 5, 

### Section 1 of the Code of West Virginia; b) agrees to take all actions required by the terms and conditions of this Order and consents to and will not contest the Director's jurisdiction regarding this Order; c) reserves all rights and defenses available regarding liability or responsibility in any proceedings regarding Allegheny other than proceedings, administrative or civil, to enforce this Order. 2. 

### Compliance with the terms and conditions of this Order shall not in any way be construed as relieving Allegheny of the obligation to comply with any applicable law, permit, other order, or any other requirement otherwise applicable. Violations of the terms and conditions of this Order may subject Allegheny to additional penalties and injunctive relief in accordance with the applicable law. 3. The provisions of this Order are severable and should a court or board of competent jurisdiction declare any provisions to be invalid or unenforceable, all other provisions shall remain in full force and effect.Allegheny Energy CO-SIP-(2-2008-5 Harrison Power Station (033-00015) Page 3

4. 

### This Order is binding on Allegheny, its successors and assigns. 5. This Order shall become effective immediately upon signing by both parties.

Curtis Davis, Chief Operating Officer Allegheny Energy Service Corp. On behalf of AE Supply and Monongahela Power

JO~A. 

### ene edict, Director Division of Air Quality Date /[This page intentionally left blank.]west virginia department of environmental protection

Division of Air Quality 60 1 57"' Street SE Charleston, WV 25304 Phone: (304) 926-0475 Fax: (304) 926-0479 Joe Manchin 111, Governor Stephanie R. Timmermeyer, Cabinet Secretary www.wvdep.org

CONSENT ORDER ISSUED UNDER THE AIR POLLUTION CONTROL ACT WEST VIRGINIA CODE, CHAPTER 22, ARTICLE 

### 5, SECTION 

### 4

TO: ALLEGHENY ENERGY SUPPLY CO., LLC DATE: April 9,2008 MONONGAHELA POWER CO. 800 Cabin Hill Drive Greensburg, PA 1560 1 ORDER NO.: CO-SIP-C-2008-6 FACILITY ID NO. : 

### 073-00005

INTRODUCTION 

### This Consent Order is issued by the Director of the Division of Air Quality (hereinafter "Director"), under the authority of West Virginia Code, Chapter 22, Article 5 

### , Section 1 et seq. to Allegheny Energy Supply (hereinafter "Allegheny").

FINDINGS OF FACT 

### In support of this Order, the Director hereby finds the following: 1. Allegheny Energy Supply operates and jointly owns with Monongahela Power Company, the Pleasants Power Station, an electric generating facility, located in Belmont, West Virginia. 2. The facility is equipped with two (2) electric generating units, Units 1 

### and 2, each rated at 626 

### megawatts, and equipped with selective catalytic reduction (SCR) emission control technology. 3. According to EPA, for states that are subject to the Clean Air Interstate Rule (CAIR) annual nitrogen oxide (NO,) emissions reduction requirements and fulfill those requirements entirely through electric generating unit (EGU) emission reductions, the 

### Promoting a healthy environment.Allegheny Eneregy CO-SIP-C-2008-6 Pleasants Power Station (073-00005) Page 2



### Clean Air Fine Particle Implementation Rule [72FR20623,25APR2007] includes a presumption that compliance by EGU sources with an EPA-approved CAIR state implementation plan (SIP) or a CAIR federal implementation plan (FIP) satisfies the NO, Reasonably Available Control Measures (RACM) requirement, including the Reasonably Available Control Technology (RACT) requirement, for the fine particle national ambient air quality standard (PM,,, NAAQS). However, this presumption only applies if such sources with existing selective catalytic reduction (SCR) emission control technology installed on their boilers operate that technology on a year-round basis, beginning in 2009. 4. The State of West Virginia is subject to the CAIR annual NO, emissions reduction requirements and has implemented 45CSR39 - 

### Control of Annual Nitrogen Oxide Emissions to Mitigate Interstate Transport of Fine Particulate Matter and Nitrogen Oxides 

### - which fulfills the annual NO, reduction requirements entirely through EGU emission reductions.

ORDER FOR COMPLIANCE 

### Now, therefore, in accordance with Chapter 22, Article 5, 

### Section 1 

### et seq. of the West Virginia Code, it is hereby agreed between the parties, and ORDERED by the Director: Allegheny shall operate the SCRs on Units 1 and 2 beginning January 1,2009, whenever the units are in operation, except for periods of required SCR maintenance.

OTHER PROVISIONS 1. 

### Under this Order and conditioned upon the Findings of Fact set forth above, Allegheny: a) hereby waives its right to appeal this Order under the provisions of Chapter 22, Article 

### 5, Section 1 of the Code of West Virginia; b) agrees to take all actions required by the terms and conditions of this Order and consents to and will not contest the Director's jurisdiction regarding this Order; c) reserves all rights and defenses available regarding liability or responsibility in any proceedings regarding Allegheny other than proceedings, administrative or civil, to enforce this Order. 2. Compliance with the terms and conditions of this Order shall not in any way be construed as relieving Allegheny of the obligation to comply with any applicable law, permit, other order, or any other requirement otherwise applicable. Violations of the terms and conditions of this Order may subject Allegheny to additional penalties and injunctive relief in accordance with the applicable law. 3. The provisions of this Order are severable and should a court or board of competent jurisdiction declare any provisions to be invalid or unenforceable, all other provisions shall remain in full force and effect.Allegheny Eneregy CO-SIP-C-2008-6 Pleasants Power Station (073-00005) Page 3

4. 

### This Order is binding on Allegheny, its successors and assigns. 5. 

### This Order shall become effective immediately upon signing by both parties.

Curtis Davis, Chief Operating Officer Allegheny Energy Service Corp. 

### On behalf of AE Supply 

### and Monongahela Power



# JOY Benedict, Director Division of Air Quality Date

Date[This page intentionally left blank.]DAVID C. CANNON JR. Vice President, Environment, Health 8 Safety



### Mr. John A. Benedict Director Division of Air Quality West Virginia DEP 601 57th Street, SE Charleston, WV 25304 

# 4 Allegheny Energy 800 Cabin Hill Drive Greensburg, PA 15601 (724) 838-6709 FAX (724) 830-51 42 

### December 22, 2008

Re: Consent Order No.: CO-SIP-C-2008-5 Facility ID NO.: 033-00015 (Harrison Power Station) and Consent Order No. : 

### CO-SIP-C-2008-6 Facilitv ID NO.: 073-00005 (Pleasants Power Station) Dear John: Thank you for taking the time over the last several months to meet with me and other representatives of Allegheny Energy to discuss the above-referenced Consent Orders. In particular, we appreciate this opportunity to confirm the parties' intentions under the Consent Orders regarding the operational, maintenance and safety issues facing Allegheny Energy from year round operation of the SCRs at the Harrison and Pleasants Power Stations, commencing January 1, 

### 2009. Further, Allegheny Energy can now outline for the Department our scheduled maintenance activities on the SCRs in 2009. For the purpose of this letter, we are assuming that the Clean Air Interstate Rule (CAIR) is not vacated by the DC Circuit but rather remanded to EPA with appropriate instructions. As Allegheny Energy advised the Department, should the 

### en 

### banc court vacate CAIR, the parties will need to discuss further what are Allegheny Energy's obligations under the Consent Orders. Even amidst this legal uncertainty, it 

### is important to clarify how the operations and maintenance requirements for the SCRs will affect running those controls under our agreements.

### Mr. John A. Benedict December 22, 2008 Page 2

SCR Operating Requirements As we have advised, the original equipment manufacturers for the SCRs at Harrison and Pleasants have set forth minimum flue gas temperatures at which the SCRs may be safely and effectively operated. If the flue gas temperature drops below the minimum and ammonia continues to be injected into the SCR, the catalyst would suffer significant and permanent degradation, as well as create an unsafe work environment for our employees. Moreover, once the SCR is taken off line, the conversion of the urea to ammonia process requires between eight and twelve hours for reheating and reactivating. The flue gas temperature is based upon the load in the boiler which is based upon demand for electricity. Therefore, to the extent there is insufficient demand, the load in the boiler is reduced to the point where the flue gas temperature falls below the minimum temperature requirement and the SCR cannot function. Thereafter, the SCR cannot be restarted unless the unit demand going forward will create flue gas temperatures in excess of the minimum requirements for a period of time sufficient to complete the urea to ammonia process and then effectively, reliably and safely operate the SCR. The parties have discussed these scenarios, and Allegheny Energy and the Department have agreed that under the terms of the Consent Order, Allegheny is not required to operate the unit's SCR at the following times even though the unit is operating: when such unit's flue gas temperature drops below 613OF 

### at any point along the catalyst layer; or for periods of up to twelve hours to allow for the reheating and reactivating of the urea to ammonia conversion process when the flue gas temperatures of the units at a facility have fallen below 613OF. 

### SCR Maintenance Each of the SCRs at Harrison and Pleasants contains three layers of catalyst. As you know, the catalysts wear out over time and need to be regenerated and/or replaced. This will become more frequent with the extended operation of the SCRs. The layers of catalyst for the SCRs at Harrison units 2 and 3 

### were

### Mr. John A. Benedict December 22, 2008 Page 3



### regenerated and/or replaced during the Fall of 2008. The SCR for Harrison Unit 1 

### will be taken out of service in early February, 2009 for one of the catalyst layers to be replaced and two layers to be regenerated. The SCR then will be brought back in service when unit 1 

### returns from an extended outage in April, 2009. The SCR for unit-1 at Pleasants will be taken out of service for approximately three weeks in the First Quarter of 2009 (currently scheduled to commence in January) for one of the catalyst layers to be replaced. The SCR for unit 2 at Pleasants will be taken out of service for approximately eight weeks in the Fall of 2009 for two of the catalyst layers to be replaced and one layer to be regenerated. More importantly, these replacement and regeneration projects will restore the SCRs to their maximum efficiency thus resulting in a higher net NOx removal during 2009. We appreciate the Department's cooperation with respect to the operation of the SCRs under the above-referenced Consent Orders and we look forward to continued open lines of communication in the future. Please feel free to call me with any thoughts or questions. Sincerely,

1 

### David C. Cannon Jr. Vice President Environment, Health & 

### Safety