### SETTLEMENT AGREEMENT

WHEREAS, on July 21,2006, Petitioner New Jersey Department of Environmental

Protection ("NJDEP") submitted, pursuant to section 505(b)(2) of the Clean Air Act ("CAA"), 

### 42 U.S.C. § 766ld(b)(2), an administrative petition to Respondent U.S. Environmental Protection Agency ("EP A"); WHEREAS, this administrative petition requested that EP A object to the issuance of a

proposed permit under Title V of 

### the Act, 42 U.S.C. § 7661 et~, to RR Energy Mid-Atlantic Power Holdings LLC ("RR Energy")' for its Portland Generating Station, located in Upper Mt. Bethel Township, Northampton County, Pennsylvania ("Petition to Object"); WHEREAS, EP A issued an Order dated June 20,2007, denying NJDEP's Petition to 

### Object to the proposed Title V operating permit for the RR Energy Portland plant; WHEREAS, on September 17, 2007, NJDEP filed with the U.S. Court of Appeals for the Third Circuit ("the Third Circuit" or "the Court") a Petition for Review, docketed at Case No. 07-3746, ofEP A's Order denying NJDEP's Petition to Object; WHEREAS, on September 14, 2007, NJDEP filed with EP A an administrative Petition for Reconsideration requesting that EP A reconsider its denial ofNJDEP's Petition to Object; WHEREAS, on February 22,2008, the Third Circuit granted EP A's unopposed motion to hold this matter in abeyance pending EP A's response to NJDEP's Petition for Reconsideration; WHEREAS, by letter dated September 25,2008, EP A denied NJDEP's Petition for

, When Pennsylvania proposed the permit, the facility was the "Reliant Energy Mid

### Atlantic Portland Generating Plant." The company has since changed its name to "RR Energy Mid-Atlantic." To avoid confusion, this Settlement Agreement refers to the facility by its current name.Reconsideration;



### WHEREAS, NJDEP fied a Petition for Review on December 17, 2008, with the Third 

### Circuit, docketed at 08-4818, ofEPA's denial ofNJDEP's Petition for Reconsideration; WHEREAS, on January 26,2009, the Court consolidated the actions docketed at Case

Nos. 07-3746 and 08-4818; 

### WHEREAS, on May 26, 2009, NJDEP fied with the Court a Motion to Supplement the Record fied by EP A and this motion is still pending; 

### WHEREAS, on July 23,2009, NJDEP fied with EP A a separate administrative petition which asks EP A to reopen the Title V permit for the RR Energy Portland plant pursuant to 40 C.F.R. § 70.7(f)(iii) & (iv) ("Petition to Reopen");

WHEREAS, as ofthe date of signature ofthis Agreement, EP A has not responded to the Petition to Reopen; WHEREAS, neither the Clean Air Act nor implementing regulations mandate EP A to respond to the Petition to Reopen within a specified time; 

### WHEREAS, representatives from the Deparment of Justice ("DOJ") and the New Jersey Attorney General's Office ("NJAG"), on behalf ofEP A and NJDEP, have come to this agreement to avoid protracted and costly litigation and to preserve judicial resources; NOW, THEREFORE, EPA and NJDEP, intending to be bound by this Agreement hereby stipulate and agree as follows: 

### 1. Within 10 days after this Agreement is finalized as described in Paragraph 4 of this Agreement, EP A and NJDEP shall file a motion for voluntar dismissal, with prejudice, of

Third Circuit Case Nos. 07-3746 and 08-4818, in accordance with Rule 42(b) of the Federal Rules of Appellate Procedure.2. Within one calendar year after the date when this Agreement becomes final as

described in Paragraph 4 of this Agreement, EPA shall make a determination on the Petition to Reopen. Once EP A makes a detern1ination on the Petition to Reopen, EP A shall provide written notice of its determination to NJDEP as expeditiously as possible, but no later than five business 

### days after the date ofEPA's determination. EPA may use electronic means to provide such notice to NJDEP.

3. Nothing in this Agreement shall affect any right ofNJDEP, in the event that EP A denies NJDEP's Petition to Reopen or in the event that EPA does not make a determination within the time frame specified in Paragraph 2, to challenge EP A's denial or failure to act in a separate action. Any such right shall be NJDEP's sole remedy in the event that EPA fails to take action on the Petition to Reopen.
4. EP A and NJDEP agree and acknowledge that before this Agreement can be made final, EP A must provide notice in the Federal Register and an opportunity for public comment

pursuant to CAA Section l13(g), 42 US.C. § 7413(g). EPA shall submit said notice of this Agreement to the Federal Register as expeditiously as possible. After this Agreement has undergone notice and comment, the EP A Administrator and the US. Attorney General, as appropriate, shall promptly consider any comments submitted during the notice and comment period in determining whether to withdraw or withhold their consent to the Agreement, in accordance with CAA Section l13(g). Once the EP A Administrator and the U.S. Attorney General determine whether or not to withdraw or withhold their consent to this Agreement, EP A 

### shall provide written notice ofthe determination to NJDEP as expeditiously as possible. This Agreement shall become final on the date that EPA provides such written notice to NJDEP. 5. Nothing in this Agreement shall be construed to limit or modify the discretionaccorded EP A by the Clean Air Act or by general principles of administrative law.
6. Except as set forth in this Agreement, EP A and NJDEP retain all rights, claims, defenses, and discretion they may otherwise have. This Agreement shall not constitute an

admission or evidence of any fact, wrongdoing, misconduct, or liability on the part of the United 

### States, its officers, or any person affliated with it. 7. The commitments ofEP A in this Settlement Agreement are subject to the availability of appropriated funds. No provision of this Agreement shall be interpreted as or

constitute a commitment or requirement that EP A obligate or pay funds in contravention of the 

### Anti-Deficiency Act, 31 US.c. § 1341.

8. Any term set forth in this Agreement may be modified by written agreement of NJDEP and EPA. 9. Any notices required or provided for by this Agreement shall be made in writing, via facsimile, electronic mail, or other means, and sent to the following: For Petitioner NJDEP: Kevin P. Auerbacher Deputy Attorney General RJ. Hughes Justice Complex P.O. Box 093 25 Market Street Trenton, NJ 08625 Telephone: (609) 292-6945 Facsimile: (609) 341-5031 email: kevin.auerbacher(gdol.lps.state.nj.us
For Respondent EP A: Monica Derbes Gibson Environmental Defense Section Environment & Natural Resources Division United States Department of Justice P.O. Box 23986

### Washington, D.C. 20026-3986

Telephone: (202) 514-0135 Facsimile: (202) 514-8865 E-mail: monica.gibson(qusdoi.gov David P.W. Orlin U.S. Environmental Protection Agency 

### Offce of General Counsel (2242A) 1200 Pennsylvania Ave., N.W. Washington, DC 20460 Telephone: (202) 564-1222 Fax: (202) 564-5603 email: orlin.david(gepa.gov

10. Subject to approval as specified in paragraph 4, the undersigned representatives of EP A and NJDEP certify that they are fully authorized to bind EP A and NJDEP to the terms of this Agreement.
For Petitioner:



## IN A REACHER Deputy A orney General RJ. Hughes Justice Complex P.O. Box 093 25 Market Street Trenton, NJ 08625 Telephone: (609) 292-6945 Facsimile: (609) 341-5031 E-mail: kevin.auerbacher(qdol.lps.state.n;.us

Dated: 3 -l - ..0 \0 For Respondent: lGNAClA S. MORENO Assistant Attorney General Environment and Natural Resources Division



### MONICA DEREES GilSON Environmental Defense Section Environment & Natural Resources Division United States Department of Justice P.O. Box 23986 

### Washington, D.C. 20026-3986 Telephone: (202) 514-0135 Facsimile: (202) 514-8865 

### E-mail: monica.gibson(qusdoi.gov Dated: