________________________________________________

________________________________________________ Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 1 of 107

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WISCONSIN

) UNITED STATES OF AMERICA, ) ) P laintiff, ) ) )

v. ) Civil Action No. : 13- cv -266 ) WISCONSIN POWER AND LIGHT COMPANY, ) MADISON GAS AND ELECTRIC COMPANY, ) WISCONSIN ELECTRIC POWER COMPANY, and ) WISCONSIN PUBLIC SERVICE CORPORATION, ) ) ) Defendant s. ) ) ________________________________________________)

) SIERRA CLUB, ) ) P laintiff, ) ) )

v. ) Civil Action No. : 13- cv -265 ) WISCONSIN POWER AND LIGHT COMPANY ) ) ) Defendant. ) ) ________________________________________________)

CONSENT DECREECase: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 2 of 107

TABLE OF CONTENTS

I. JURISDICTION AND VENUE

................................ ................................ ........................ 3

II. APPLICABILITY

................................ ................................ ................................ .............. 4

III. DEFINI TIONS

................................ ................................ ................................ ................... 4

IV. REQUIREMENT TO RETIRE , REFUEL, OR REPOWER UNITS

.............................. 18

V. NO x EMISSION REDUCTIONS AND CONTROLS

................................ .................... 18

VI. SO 2 EMISSION REDUCTIONS AND CONTROLS

................................ ..................... 25

VII. PM EMISSION REDUC TIONS AND CONTROLS

................................ ...................... 3 1

VIII. PROHIBITION ON NETTI NG CREDITS OR OFFSETS

................................ ............. 38

IX. ENVIRONMENTAL MITIGATION PROJECTS

................................ .......................... 3 9

X. CIVIL PENALTY

................................ ................................ ................................ ............ 41

XI. RESOLUTION OF CLAIMS

................................ ................................ .......................... 42

XII. PERIODIC REPORTING

................................ ................................ ................................ 50

XIII. REVIEW AND APPRO VAL OF SUBMITTALS

................................ .......................... 5 3

XIV. STIPULAT ED PENALTIES

................................ ................................ ........................... 53

XV. FORCE MAJEURE

................................ ................................ ................................ ......... 67

XVI. DISPUTE RESOLUTION

................................ ................................ ............................... 7 2

XVII. PERMI TS

................................ ................................ ................................ ......................... 7 4

XVIII. INFORMATION C OLLECTION AND RETENTION

................................ .................. 77

XIX. NOTIC ES

................................ ................................ ................................ ......................... 7 9

XX. SALE S OR TR ANSFERS OF OPERATIONAL OR OWNERSHIP INTERESTS

................... 82

XXI. EFFECTIVE DATE

................................ ................................ ................................ ......... 85

iCase: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 3 of 107

XXII. RETENTION OF JURISDICTION

................................ ................................ ................. 85

XXIII. MODIFI CATION

................................ ................................ ................................ ............ 8 6

XXIV. GENERAL PR OVISIONS

................................ ................................ .............................. 86

XXV. SIGNATORI ES AND SERVICE

................................ ................................ .................... 9 1

XXVI. PUBLIC COMMENT /AGENCY REVIEW

................................ ................................ .... 91

XXVII. CONDITIONAL TERMINATION OF ENFORCEMENT UNDER CONSENT DECREE

................................ ................................ ................................ ....... 92

XXVIII. FINAL J UDGMENT

................................ ................................ ................................ ....... 94

APPENDIX A

-- ENVIRONMENTAL MITIGATION PROJECTS

iiCase: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 4 of 107

WHEREAS, on September 9, 2010, Plaintiff, Sierra Club (“Sierra Club”), filed a

Complaint for civil penalties, declaratory and injunctive relief, with costs and fees, under the

Clean Air Act (“CAA” or the “Act”), 42 U.S.C. §§ 7401-7671q, and specifically the CAA’s

citizen suit provision, 42 U.S.C. § 7604, against Defendant, Wisconsin Power and Light

Company (“WPL”), Civil Action No. 10- CV -511 (W.D. Wis.), and on May 8, 2012, dismissed

that action by stipulation, without prejudice, in anticipation of this Consent Decree and is refil ing

its Complaint concurrently with this Consent Decree ;

WHEREAS, on September 24, 2010, Sierra Club, filed a Complaint for civil penalties,

declaratory and injunctive relief, with costs and fees, under the Clean Air Act (“CAA or the

“Act”), 42 U.S.C. §§ 7401-7671q, and specifically the CAA’s citizen suit provision, 42 U.S.C. §

7604, against Defendant WPL, Civil Action No. 10- cv -00835- AEG (E.D. Wis.);

WHEREAS, the United States of America (“United States”), on behalf of the United

States Environmental Protection Agency (“EPA”)

, is concurrently filing a C omplaint and this

Consent Decree, for injunctive relief and civil penalties pursuant to Sections 113(b)(2) and 167

of the Act 42 U.S.C. §§ 7413(b)(2) and 7477, alleging that WPL, Madison Gas and Electric

Company (“MGE”), Wisconsin Electric Power Company (“We Energies”), an d Wisconsin

Public Service Corporation (“WPSC”) (collectively “Defendants”) , violated the Prevention of

Significant Deterioration (“PSD”) provisions of Part C of Subchapter I of the Act, 42 U.S.C.

§§ 7470-7492, the requirements of Title V of the Act, 42 U.S.C. §§ 7661-7661f, and the

federally enforceable Wisconsin State Implementation Plan (“ Wisconsin SIP”);

WHEREAS, on December 14, 2009, EPA issued a Notice and Finding of Violation

(“NOV /FOV ”) to Defendants with respect to alleged violations of the CAA;

1Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 5 of 107

WH EREAS, the United States provided Defendants and the State of Wisconsin with

actual notice pertaining to Defendants’ alleged violations, in accordance with Sections 113(a)(1)

and (b) of the Act, 42 U.S.C. § 7413(a)(1) and (b);

WHEREAS, in their C omplaint s , the United States and the Sierra Club (hereinafter

collectively “Plaintiffs”) allege

, inter alia, that one or more Defendants made major

modifications to major emitting facilities, and failed to obtain the necessary permits and install

and operate the c ontrols necessary under the Act to reduce sulfur dioxide (“SO 2 ”), oxides of

nitrogen (“NO x ”), and /or particulate matter (“PM”)

, at certain electricity generating stations

located in Wisconsin, and that such emissions damage human health and the environment;

WHEREAS, the Sierra Club alleges in its Complaint, Case 10- cv -00835-AEG, that WPL

exceeded its opacity permit limits at the Edgewater Generating Station;

WHEREAS, in the ir C omplaints, the Plaintiffs allege claims upon which relief can be

gran ted against the Defendants under Sections 113, 167, and 304 of the Act, 42 U.S.C. §§ 7413,

7477, and 7604 ;

WHEREAS, the Plaintiffs and Defendants (collectively, the “Parties”) have agreed that

settlement of th ese action s is in the best interest s of the Parties and in the public interest, and that

entry of this Consent Decree without further litigation is the most appropriate means of resolving

these matters ;

WHEREAS, the Parties anticipate that the installation and operation of pollution control

equipment and practices pursuant to this Consent Decree, and the retirement, refueling, or

repowering of certain facilities required by this Consent Decree, will achieve significant

reductions of SO 2 , NO x , and PM emissions and improve air quality;

2Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 6 of 107

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

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

Consent Decree is fair, reasonable, in the public interest, and consistent with the goal s of the Act ;

WHEREAS, the Defendants have cooperated in the resolution of th ese matter s;

WHEREAS, the Defendants deny the violations alleged in the Complaints, and nothing

herein shall constitute an admission of liability; and

WHEREAS, the Parties have consented to entry of this Consent Decree without trial of

any issues;

NOW, THEREFORE, without any admission of fact or law, it is hereby ORDERED,

ADJUDGED, AND DECREED as follows:

I. JURISDICTION AND VENUE

1. This Court has jurisdiction over this action , the subject matter herein, and the

Parties consenting hereto, pursuant to 28 U.S.C. §§ 1331, 1345, 1355, and 1367, and pursuant to

Sections 113, 167, and 304 of the Act, 42 U.S.C. §§ 7413, 7477, and 7604. Venue is proper in

the Western District of Wisco nsin pursuant to Sections 113(b) and 304(c) of the Act, 42 U.S.C.

§§ 7413(b) and 7604(c), and 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, the Defendants waive

all ob jections and defenses that they may have to the Court’s jurisdiction over this action, to the

sufficiency of any pre -suit notices required by Section 113 or 304 of the Act, to the Court’s

jurisdiction over the Defendants, and to venue in this district. The Defendants consent to and

shall not challenge entry of this Consent Decree or this Court’s jurisdiction to enter and enforce

this Consent Decree. Except as expressly provided for herein, this Consent Decree shall not

3Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 7 of 107

create any rights in or obligations of any party other than the Parties to this Consent Decree.

Except as provided in Section XXVI (Public Comment/Agency Review) of this Consent Decree,

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

foregoin g, should this Consent Decree not be entered by this Court, then the waivers and

consents set forth in this Section I (Jurisdiction and Venue) shall be null and void and of no

effect.

II. APPLICABILITY

2. Upon entry, the provisions of this Consent Decree shall apply to and be binding

upon the United States and upon the Sierra Club, the Defendants, and their respective successors

and assigns or other entities or persons otherwise bound by law.

3. A Defendant performing work under this Consent Decree shall provi de a copy of

this Consent Decree to all vendors, suppliers, consultants, contractors, agents, and any other

company or other organization retained to perform such work at issue. Notwithstanding any

retention of contractors, subcontractors, or agents to perform any work required under this

Consent Decree, each Defendant shall ensure that all work it is required to undertake is

performed in accordance with the requirements of this Consent Dec ree

. In any action to enforce

this Consent Decree, except as expressly provided herein ( e.g. , Section XV Force Majeure),

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

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

III. DEFINITIONS

4. Every term expressly defined by this Section shall have the meaning given that

term herein. Every other term used in this Consent Decree that is also a term used under the Act

4Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 8 of 107

or in a regu lation implementing the Act, including regulations approved as part of the Wisconsin

SIP, shall mean in this Consent Decree what such term means under the Act or those regulations.

5. A “12

- Month Rolling Average Emission Rate” shall be determined by calculati ng

an arithmetic average of all hourly emission rates in lb/mmBTU for the current month and all

hourly emission rates in lb/mmBTU for the previous 11 Unit Operating Months. A new 12

-
Month Rolling Average Emission Rate shall be calculated for each new comp lete month in

accordance with the provisions of this Consent Decree. Each 12-Month Rolling Average

Emission Rate shall include all emissions of the applicable pollutant that occur during all periods

of operation, including startup, shutdown, and Malfunction. For purposes of calculating a “12-

Month Rolling Average Emission Rate,” a “Unit Operating Month” means any month during

which a Unit fires Fossil Fuel.

6. A “30

- Day Rolling Average Emission Rate” for a Unit shall be determined by

calculating an arithmetic average of all hourly emission rates in lb/mmBTU for the current Unit

Operating Day and all hourly emission rates in lb/mmBTU for the previous 29 U nit Operating

Days

. A new 30

- Day Rolling Average Emission Rate shall be calculated for each new Unit

Operating Day. Each 30

- Day Rolling Average Emission Rate shall include all emissions of the

applicable pollutant that occur during all periods within any Unit Operating Day, including

emissions from startup, shutdown, and Malfunction.

7. A “24 -Hour Rolling Aver age Emission Rate” for a Unit shall be determined by

calculating an arithmetic average of the current Unit Operating Hour emission rate in lb/mm

BTU and the previous 23 Unit Operating Hours. A new 24-Hour Rolling Average Emission

Rate shall be calculated for each new Unit Operating Hour. Each 24 -Hour Rolling Average

5Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 9 of 107

Emission Rate for PM shall include all emissions that occur during all periods of operation,

including startup, shutdown, and Malfunction.

8. “Baghouse” means a full stream (fabric filter or membrane) particulate emissions

control device on the main boilers.

9. “Boiler Island” means a Unit’s (a) fuel combustion system (including bunker, coal

pulverizers, crusher, stok er, 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.

10. “Capital Expenditures” means all capital expenditures, as defined by Generally

Accepted Accounting Principles (“GAAP”), as those principles exist at the Date of Entry of this

Consent Decree, excluding the cost of installing or upgrading pollution control devices.

11. “CEMS” or “Continuous Emission Monitoring System,” means, for obligations

involving the monitoring of NO x , SO 2 , and PM emissions 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 60 and 40

C.F.R. Part 75.

12. “Clean Air Act,” “CAA,” or “Act” means the federal Clean Air Act, 42 U.S.C.

§§ 7401-7671q, and its implementing regulations.

13. “Columbia Generating Station” or “Columbia Station” or “Col umbia” means

solely for purposes of this Consent Decree, the Columbia Energy Center consisting of two

existing coal -fired boilers designated as Unit 1 (512 MW) and Unit 2 (511 MW), which is

6Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 10 of 107

located in Columbia County, Wisconsin. Columbia is operated by WPL and jointly owned by

WPL, MGE, and WPSC.

14. “Consent Decree” means this Consent Decree and the Appendices hereto, which

are incorporated into the Consent Decree.

15. “Continuously Operate” or “Continuous Operation” means that when a pollution

control technology or combustion control is required to be continuously used at a Unit pursuant

to this Consent Decree (including, but not limited to, SCR, SNCR, DFGD, ESP, Baghouse, or

Low NO x Combustion System), it shall be operated at all times such Unit is in operation (except

as otherwise provided by Section XV (Force Majeure)), consistent with the technological

limitations, manufacturers’ specifications, good engineering and maintenance practices, and

good air pollution control practices for minimizing emissions (as defined in 40 C.F.R. §

60.11(d)) for such equipment and the Unit.

16. “Date of Entry” means the date this Consent Decree is approved or signed by the

United States Dis trict Court Judge.

17. “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 Western District of Wisconsin.

18. “Day” means calendar day unless otherwise specified in thi s Consent Decree.

19. “Defendants” means Wisconsin Power and Light Company (“WPL”), Madison

Gas and Electric Company (“MGE”), Wisconsin Electric Power Company (“We Energies”), and

Wisconsin Public Service Corporation (“WPSC”). “Defendant” means one of the Def endants.

20. “Dry Flue Gas Desulfurization” or “Dry FGD” or “DFGD” means an add -on air

pollution control system for the reduction of SO 2 located downstream of a boiler that sprays an

7Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 11 of 107

alkaline sorbent slurry in one or more absorber vessels designed to provide i ntimate contact

between an alkaline slurry and the flue gas stream to react with and remove SO 2 from the exhaust

stream forming a dry powder material which is captured in a downstream particulate control

device. The Parties acknowledge that what was appro ved by the Public Service Commission of

Wisconsin on March 11, 2011, in Docket No. 05- CE -138, to be installed at Columbia Units 1

and 2 would qualify as a DFGD for purposes of this Consent Decree. Likewise, the Parties

acknowledge that what was filed on July 27, 2012, with the Public Service Commission of

Wisconsin in Docket No. 6680- CE -174 to be installed at Edgewater Unit 5 would qualify as a

DFGD for purposes of this Consent Decree.

21. “Edgewater Generating Station” or “Edgewater Station” or “Edgewater” means

solely for purposes of this Consent Decree, the Edgewater Generating Station consisting of three

existing coal -fired boilers designated as Unit 3 (60 MW), Unit 4 (330 MW), and Unit 5 (380

MW), which is located in Sheboygan County, Wisconsin. Edgewater Unit 3 is owned by WPL,

Edgewater Unit 4 is jointly owned by WPL and WPSC, and Edgewater Unit 5 is owned by WPL

and was formerly jointly owned by WPL and We Energies. WPL is the operator of Edgewater

Units 3, 4, and 5.

22. “Electrostatic Precipitator” or “ESP” means a device for removing particulate

matter from combustion gases by imparting an electric charge to the particles and then attracting

them to a metal plate or screen of opposite charge before the combustion gases are exhausted to

the atmosphere.

8Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 12 of 107

23. “E mission Rate” for a given pollutant means the number of pounds of that

pollutant emitted per million British thermal units of heat input (lb/mmBTU), measured in

accordance with this Consent Decree.

24. “Environmental Mitigation Projects” or “Projects” means th e projects set forth in

Section IX (Environmental Mitigation Projects) and Appendix A of this Consent Decree, and any

other project undertaken for the purpose of fulfilling a Defendant’s obligations under Section IX

and approved for that purpose by the EPA pursuant to Section XIII (Review and Approval of

Submittals).

25. “EPA” means the United States Environmental Pr otection Agency.

26. “Fossil Fuel” means any hydrocarbon fuel, including but not limited to coal,

metallurgical coke, petroleum coke, petroleum oil, natural gas, or any other fuel made or derived

from the foregoing.

27. “Greenhouse Gases” means the air pollutant defined at 40 C.F.R. § 86.1818- 12(a)

as of the Date of Lodging of this Consent Decree as the aggregate group of six greenhouse gases:

carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons, and sulfur

hexafluoride. This definition continues to apply even if 40 C.F.R. § 86.1818- 12(a) is

subsequently revised, stayed, vacated, or otherwise modified.

28. “Improved Unit” for NO x means a System Unit equipped with an SCR or

scheduled under this Consent Decree to be equipped with an SCR. A Unit may be an Improved

Unit for one pollutant without being an Improved Unit for another pollutant. Columbia Unit 2

and Edgewater Unit 5 are Improved Units for NO x .

9Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 13 of 107

29. “Improved Unit” for SO 2 means a System Unit equipped with a DFGD or

scheduled under this Cons ent Decree to be equipped with a DFGD. A Unit may be an Improved

Unit for one pollutant without being an Improved Unit for another pollutant. Columbia Units 1

and 2 and Edgewater Unit 5 are Improved Units for SO 2
.

30. “kW” means Kilowatt or one thousand wat ts.

31. “lb/mmBTU” means pound per million British thermal units.

32. “Low NO x Combustion System” means burners and associated combustion air

control equipment, including Overfire Air and Rich Reagent Injection (if installed at the Unit),

which control mixing characteristics of Fossil Fuel and oxygen, thus restraining the formation of

NO x during combustion of fuel in the boiler.

33. “Malfunction” means a failure to operate in a normal or usual manner by any air

pollution control equipment, process equipment, or a process, which is sudden, infrequent, and not

reasonably preventable. Failures that are caused in part by poor maintenance or careless operation

are not Malfunctions.

34. “MGE” means Defendant, Madison Gas and Electric Co., a co

- owner of the

Columbia Station.

35. “ Natural Gas” means natural gas received directly or indirectly through a

connection to an interstate pipeline.

36. “Nelson Dewey Generating Station” or “Nelson Dewey Station” or “Nelson

Dewey” means, solely for purposes of this Consent Decree, the Nelson Dewey Generating

Station consisting of two existing coal -fired boilers designated as Unit 1 (100 MW) and Unit 2

10Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 14 of 107

(100 MW), which is located in Grant County, Wisconsin. Nelson Dewey is owned and operated

by WPL.

37. “Netting” shall mean the process of determining whether a particular physical

change or change in the method of operation of a major stationary source results in a “net

emissions increase,” as that term is defined at 40 C.F.R. §§ 51.165(a)(2)(vi), 52.21(b)(3)(i), and

in the Wisconsin SIP.

38. “NO x ” means oxi des of nitrogen.

39. “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

established under the Clean Air Act or applicable State Implementation Plan; provided, however,

that with respect to any such program that first applies to emissions occurring after December 31,

2011, a “NO x Allowance” shall include an allowance created and allocated under such program

only for control periods starting on or after the fourth anniversary of the D ate of Entry of this

Consent Decree.

40. “Nonattainment NSR” means the new source review program within the meaning

of Part D of Subchapter I of the Act, 42 U.S.C. §§ 7501-7515 and 40 C.F.R. Part 51, and

corresponding provisions of the federally enforceable Wisconsin SIP.

41. “Operational Interest” means part or all of a Defendant’s right to be the operator

(as that term is used and interpreted under the Act) of any Unit.

42. “Ownership Interest” with respect to a Unit means part or all of a Defendant’s

legal or equitable ownership interest in any Unit. A Defendant has an “Ownership Interest” with

respect to a Plant if the Defendant is a Unit Owner of any Unit included within that Plant.

11Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 15 of 107

43. “Other Unit” means any Unit within the System that is not an Improved Unit for

the pollutant in question. A Unit may be an Improved Unit for NO x and an Other Unit for SO 2 ,

and vice versa.

44. “Over

- Fire Air” or “OFA” means an in

- furnace staged co mbustion control to

reduce NO x emissions.

45. “Parties” means the United States of America on behalf of EPA, the Sierra Club,

and the Defendants. “Party” means one of the named “Parties.”

46. “Plant” means each of the following individually: (i) the Columbia Gen erating

Station (consisting of Units 1 & 2); (ii) Edgewater Generating Station (consisting of Units 3, 4 &

5); or (iii) the Nelson Dewey Generating Station (consisting of Units 1 & 2).

47. “Plant -Wide Annual Tonnage Limitation” for a pollutant means the sum o f the

tons of the pollutant emitted from all the Units at a Plant including, without limitations, all tons

of that pollutant emitted during periods of startup, shutdown, and Malfunction, in the designated

year.

48. “PM” means total filterable particulate matte r, measured in accordance with the

provisions of this Consent Decree.

49. “PM CEMS” or “PM Continuous Emission Monitoring System” means, for

obligations involving the monitoring of PM emissions under this Consent Decree, the equipment

that samples, analyzes, m easures, and provides, by readings taken at frequent intervals, an

electronic and/or paper record of PM emissions.

12Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 16 of 107

50. “PM Control Device” means any device, including an ESP or Baghouse, which

reduces emissions of PM. Where a Unit is equipped with both an ESP and a Baghouse, the

Baghouse, and not the ESP, shall be considered the PM Control Device for that Unit.

51. “PM Emission Rate” means the number of pounds of PM emitted per million

BTU of heat input (lb/mmBTU).

52. “Prevention of Significant Deterioration” or “PSD” means the new source review

program within the meaning of Part C of Subchapter I of the Clean Air Act, 42 U.S.C. §§ 7470-

7492 and 40 C.F.R. Part 52, and corresponding provisions of the federally enforceable

Wisconsin SIP.

53. “Project Dollars” means ex penditures and payments incurred or made by a

Defendant in carrying out the Environmental Mitigation Projects identified in Section IX

(Environmental Mitigation Projects) of this Consent Decree for which such Defendant is

responsible to the extent that such expenditures or payments both: (a) comply with the

requirements set forth in Section IX and Appendix A of this Consent Decree, and (b) constitute a

Defendant’s direct payments for such projects, or a Defendant’s external costs for contractors,

vendors, and equipment.

54. “Refuel” or “Refueled” means that a Unit is either Refueled to Natural Gas or

Refueled to Another Non-Fossil Fuel Approved by EPA within the meaning of this Consent

Decree.

55. “Refuel to Natural Gas” or “Refueled to Natural Gas” means, solely fo r purposes

of this Consent Decree, the modification of a Unit such that the modified unit generates

electricity solely through the combustion of Natural Gas rather than coal, including installation

13Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 17 of 107

of at least the following combustion controls to reduce emissions of NOx: low- NOx natural gas

burners and an overfire air system. Nothing herein shall prevent the reuse of any equipment at

any existing unit or new emissions unit, provided that the Unit Owner(s) applies for, and obtains,

all required permits, inc luding, if applicable, a PSD or Nonattainment NSR permit.

56. “Refuel to Another Non-Fossil Fuel Approved by EPA” or “Refueled to Another

Non -Fossil Fuel Approved by EPA” means, solely for purposes of this Consent Decree, the

modification of a unit such that the modified unit generates electricity solely through the

combustion of a non-fossil fuel approved by EPA pursuant to Section XIII (Review and

Approval of Submittals). Nothing herein shall prevent the reuse of any equipment at any

existing unit or new emissions unit, provided that the Unit Owner(s) applies for, and obtains, all

required permits, including, if applicable, a PSD or Nonattainment NSR permit.

57. “Repower” or “Repowered” means, solely for purposes of this Consent Decree,

the removal and replaceme nt of the Unit components such that the replaced unit generates

electricity solely through the combustion of Natural Gas rather than coal, through the use of a

combined cycle combustion turbine technology. Nothing herein shall prevent the reuse of any

equ ipment at any existing unit or new emissions unit, provided that the Unit Owner(s) applies

for, and obtains, all required permits, including, if applicable, a PSD or Nonattainment NSR

permit.

58. “Retire” means to permanently shut down a Unit such that the Unit cannot

physically or legally burn coal, and with respect to the applicable Unit Owner(s) and/or Unit

Operator

, to comply with applicable state and federal requirements for permanently ceasing

operation of the Unit as a coal- fired electric generating Unit , including removing the Unit from

14Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 18 of 107

Wisconsin’s air emissions inventory, and amending all applicable permits so as to reflect the

permanent shutdown status of such Unit. The Unit Owners can choose to not retire and to

continue to operate such a Unit only if it is Refueled or Repowered within the meaning of this

Consent Decree, and such Unit Owner(s) obtains any and all required CAA permit(s) for the

Refueled or Repowered Unit, including but not limited to an appropriate permit pursuant to CAA

Subchapter I, Parts C and D, and pursuant to the applicable Wisconsin SIP provisions

implementing CAA Subchapter I.

59. “Rich Reagent Injection” means a process of adding NO x reducing agents in a

staged fuel rich region of the lower furnace to reduce the formation of NO x .

60. “SCR” or “Selective Catalytic Reduction” means a pollution control device for

reducing NO x emissions through the use of selective catalytic reduction technology.

61. “SNCR” or “Selective Non -Catalytic Reduction” means a pollution control device

for the reducti on of NO x emissions through the use of selective non- catalytic reduction

technology that utilizes ammonia or urea injection into the boiler.

62. “SO 2 ” means sulfur dioxide.

63. “SO 2 Allowance” means an authorization to emit a specified amount of SO 2 that

is alloca ted or issued under an emissions trading or marketable permit program of any kind

established under the Clean Air Act or applicable State Implementation Plan; provided, however,

that with respect to any such program that first applies to emissions occurrin g after December 31,

2011, a “SO 2 Allowance” shall include an allowance created and allocated under such program

only for control periods starting on or after the fourth anniversary of the D ate of Entry of this

Consent Decree.

15Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 19 of 107

64. “State” means the State of Wisconsin.

65. “Super

- Compliant Allowance” means a NO x Allowance or SO 2 Allowance

attributable to reductions beyond the requirements of this Consent Decree, as described in

Paragraphs 9 8 and 113.

66. “Surrender” or “Surrender of Allowances” means, for purposes of SO 2 or NO x
Allowances, permanently surrendering allowances from the accounts administered by EPA and

the State of Wisconsin, if applicable, so that such allowances can never be used thereafter to

meet any compliance requirements under the CAA, a state implementation plan, or this Consent

Decree.

67. “System” means collectively, and solely for purposes of this Consent Decree, the

Columbia Generatin g Station (consisting of Units 1 & 2), the Edgewater Generating Station

(consisting of Units 3, 4 & 5), and the Nelson Dewey Generating Station (consisting of Units 1

& 2).

68. “Title V Permit” means the permit required of major sources pursuant to

Subchapter V of the Act, 42 U.S.C. §§ 7661-7661e.

69. “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 and systems necessary for production

of electricity. An electric steam generating station may be comprised of one or more Units.

70. “Unit Oper ating Day” means any Day on which a Unit fires Fossil Fuel.

16Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 20 of 107

71. “Unit Operating Hour” means each clock hour during which any fuel is

combusted at any time in the Unit.

72. “Unit Operator” means the operator (as that term is used and interpreted under the

Act) of a Unit. For purposes of this Consent Decree, “Unit Operator” means WPL.

73. “Unit Owner” or “Unit Owners” means, with respect to any Unit addressed in this

Consent Decree, in singular form, WPL, MGE, or WPSC, each of which has ownership interests,

in whole or in part, in the following Units addressed in this Consent Decree: Nelson Dewey

Units 1 & 2 - WPL; Columbia Units 1 & 2 - WPL, MGE, and WPSC ; Edgewater Unit 3

- WPL;

Edgewater Unit 4 - WPL and WPSC; and Edgewater Unit 5 – WPL, and in plural form, means

all Unit Owners that have an Ownership Interest in the particular Unit or Units addressed.

74. “Unit -Specific Annual Tonnage Cap” for a Unit means the sum of the tons of the

pollutant in question emitted from the Unit including, without limitations, all tons of that

pollutant emitted during periods of operation, startup, shutdown, and Malfunction, in the

designated calendar year.

75. “We Energies” means Defendant, Wisconsin Electric Power Company, a former

co -owner of Edgewater Unit 5.

76. “Wisconsin SIP” means the Wis consin State Implementation Plan, and any

amendments thereto, as approved by EPA pursuant to Section 110 of the Act, 42 U.S.C. § 7410.

77. “Working Day” means a day other than a Saturday, Sunday, or Federal Holiday.

In computing any period of time under this Consent Decree, where the last day would fall on a

Saturday, Sunday, or Federal Holiday, the period shall run until the close of business on the next

Working Day.

17Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 21 of 107

78. “WPL” means Defendant, Wisconsin Power and Light Company, the operator and

the owner or co-owner of the Columbia Station, the Edgewater Station, and the Nelson Dewey

Station.

79. “WPSC” means Defendant, Wisconsin Public Service Corporation, a co- owner of

the Columbia Station and Edgewater Unit 4.

IV. REQUIREMENT TO RETIRE, REFUEL , OR REPOWER UNITS

80. By no later than December 31, 2015, WPL shall Retire, Refuel, or Repower

Nelson Dewey Units 1 and 2.

81. By no later than December 31, 2015, WPL shall Retire, Refuel, or Repower

Edgewater Unit 3.

82. By no later than December 31, 2018, WPL and WPSC shall ensure that

Edgewater Unit 4 is Retired, Refueled , or Repowered.

V. NO x EMISSION REDUCTIONS AND CONTROLS

A. Installation, Operation, and Performance NO x Requirements at Columbia Station

83. Commencing no later than 90 Days after the Date of Entry of this Consent

Decree, and continuing thereafter, WPL, MGE, and WPSC shall ensure the Continuous

Operation of the Low NO x Combustion System at Columbia Units 1 and 2 so that Units 1 and 2

each achieves and maintains a 12 -Month Rolling Average Emission Rate for NO x of no greater

than 0.150 lb/mmBTU.

84. WPL, MGE, and WPSC shall install an SCR at Columbia Unit 2 on or before

December 31, 2018. Commencing on January 1, 2019, and continuing thereafter, WPL, MGE,

and WPSC shall ensure Continuous Operation of the SCR. Commencing no later than 30

18Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 22 of 107

Operating Days after January 1, 2019, WPL, MGE, and WPSC shall ensure Continuous

Operation of the SCR so that Unit 2 achieves and maintains a 30- Day Rolling Average Emission

Rate for NO x of no greater than 0.080 lb/mmBTU and a 12-Month Rolling Average Emission

Rate for NO x of no greater than 0.070 lb/mmBTU.

B. Installation, Operation, and Performance NOx Requirements at Edgewater Unit 5

85. WPL shall install an SCR at Edgewater Unit 5 on or before May 1, 2013.

Commencing on May 1, 2013, an d continuing thereafter, WPL shall Continuously Operate the

SCR. Commencing no later than 30 Operating Days after May 1, 2013, WPL shall Continuously

Operate the SCR so that Unit 5 achieves and maintains a 30

- Day Rolling Average Emission Rate

for NO x of n o greater than 0.080 lb/mmBTU and a 12-Month Rolling Average Emission Rate for

NO x of no greater than 0.070 lb/mmBTU.

C. Operation and Performance Requirements for Existing Selective Non -Catalytic Reduction, Overfire Air, and Rich Reagent Injection at Edgewater Unit 4

86. Commencing immediately upon the Date of Entry of this Consent Decree, and

continuing until January 1, 2014, WPL and WPSC shall ensure that the existing Selective NonCatalytic Reduction System and Low NO x Combustion System at Edgewater Unit 4 is

Continuously Operated. Commencing no later than 30 Operating Days after the Date of Entry of

this Consent Decree, WPL and WPSC shall ensure Continuous Operation of the existing

Selective Non

- Catalytic Reduction System and Low NO x Combustion System so that Unit 4

achieves and maintains a 30

- Day Rolling Average Emission Rate for NO x of no greater than

0.170 lb/mmBTU.

87. Commencing on January 1, 2014, and continuing thereafter, WPL and WPSC

shall ensure that the existing Selective Non

- Catalytic Reduction Sy stem and Low NO x
19Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 23 of 107

Combustion System at Edgewater Unit 4 is Continuously Operated so that Unit 4 achieves and

maintains a 12 -Month Rolling Average Emission Rate for NO x of no greater than 0.150

lb/mmBTU.

D. Unit

- Specific Annual Tonnage Cap for NO x for Edgewater Unit 3

88. Commencing with calendar year 2013, and continuing each calendar year

thereafter until the Edgewater Unit 3 is Retired, Refueled, or Repowered as required by

Paragraph 81 , WPL shall not exceed a Unit -Specific Annual Tonnage Cap of 250 tons of NO x

emissions each year at Edgewater Unit 3.

E. Requirement to Cease Burning Petcoke and Commence Burning 100% PRB Coal or Equivalent at Nelson Dewey Units 1 and 2________________________________

89. Commencing immediately upon the Date of Entry of this Consent Decree, and

continuing thereafter, WPL shall cease burning Petcoke in the boilers of Nelson Dewey Units 1

and 2 and shall commence burning 100% Powder River Basin (“PRB”) or equivalent fuel

containing ≤ (less than or equal to) 1.00 lb/mmBTU of SO 2
.

90. Commencing on the first Day of the month following the Date of Entry of this

Consent Decree, and continuing thereafter, WPL shall achieve and maintain a combined 12-

Month Rolling Average Emission Rate for NO x at Nelson Dewey Units 1 and 2 of no greater

than 0.300 lb/mmBTU.

F. Plant -Wide Annual Tonnage Limitations for NO x

91. For each calendar year as specified below, the Unit Owners of each Plant shall,

with respect to the Plant(s) in which they have an Ownership I nterest, ensure that the following

Plant -Wide Annual Tonnage Limitations for NO x are not exceeded for such Plants:

20Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 24 of 107

Plant For the Calendar Year Plant -Wid e NO x Cap (TPY) (Unit Owners) Specified Below

Each calendar year from 2013 2,500 Nelson Dewey Units 1 & 2 through 2015 (WPL) 2016 and continuing each calendar 0 year thereafter Each calendar year from 2013 5,550 Columbia Units 1& 2 through 2018 (WPL, MGE

, and WPS C) 2019 and continuing each calendar 4,300 year thereafter Calendar year 2013 3,600 Edgewater Units 3, 4 & 5 Each calendar year from 2014 2,500 (WPL for Units 3 & 5 ) through 2018 WPL and WPS C for Unit 4 only) 2019 and continuing each calendar 1,100[ 1 ] year thereafter

G. Monitoring of NO x Emissions

92. In determining a 30 -Day Rolling Average Emission Rate for NO x or a 12-Month

Rolling Average Emission Rate for NO x , Unit Owners shall use NO x emission data obtained

from a CEMS in accordance with the procedures of 40 C.F.R. Part 75, except that NO x emissions

data need not be bias adjusted and the missing data substitution procedures of 40 C.F.R. Part 75

shall not apply to such determinations. Diluent capping ( i.e. , 5% CO 2 ) will be applied to the

NO x emission rate for any hours where the measured CO 2 concentration is less than 5%

following the procedures in 40 C.F.R. Part 75, Appendix F, Section 3.3.4.1.

93. For purposes of determining compliance with any Plant-Wide Annual Tonnage

Limitation and Unit -Specific Annual Tonnage Cap for NO x , Unit Owners shall, with respect to

1 If Edgewater Unit 4 is Refueled or Repowered to Natural Gas , the P lant -W ide NO
x cap shall be 1,600 TPY. In this event, Unit 4 shall be operated so that the combined emission rate of Units 4 and 5 achieve and maintain a 12

- Month Rolling Average Emission Rate for NO
x of no greater t han 0.100 lb/mmBTU

, commencing on January 1, 2019

, and continuing each calendar year thereafter

. 21Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 25 of 107

the Units in which they have an Ownership Interest, ensure that NO x emission data are obtained

from a CEMS in accordance with the procedures specified in 40 C.F.R. Part 75.

H. Use and Surrender of NO x Allowances

94. Except as may be necessary to comply with Section XIV (Stipulated Penalties),

no Unit Owner sha ll use NO x Allowances to comply with any requirement of this Consent

Decree at plants in which it has an Ownership Interest, including by claiming compliance with

any emission limitation required by this Consent Decree by using, tendering, or otherwise

app lying NO x Allowances to offset any excess emissions.

95. Except as provided in this Consent Decree, and specifically in paragraphs 96 and

97, beginning in calendar year 2013 and continuing each calendar year thereafter, no Unit Owner

shall sell, bank, trade, or transfer its interest in any NO x Allowances allocated to Units in the

System.

96. Beginning in calendar year 2013, and continuing each calendar year thereafter,

the Unit Owners shall ensure the Surrender of all NO x Allowances allocated to the Units in the

System in which they have an Ownership Interest for that calendar year that are not needed to

meet federal and/or state CAA regulatory requirements for (a) the System Units, or (b) any

electricity generating unit i n the State of Wisconsin in which any Unit Owner has an Operational

Interest or Ownership Interest, that is subject to a federal consent decree addressing PSD and/or

Nonattainment NSR violations to which the United States is a party.

97. Nothing in this Consent Decree shall prevent any Unit Owner from purchasing or

otherwise obtaining NOx Allowances from another source or from another Unit Owner for

purposes of complying with federal and/or state CAA regulatory requirements to the extent

22Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 26 of 107

otherwise allowed by la w. The requirements of this Consent Decree pertaining to Unit Owners’

use and Surrender of NOx Allowances are permanent and are not subject to any termin ation

provision of this Consent Decree.

I. Super

- Compliant NO x Allowances

98. Notwithstanding Paragraphs 95 and 96, in each calendar year beginning in 2013,

and continuing thereafter, each Unit Owner may sell, bank, use, trade, or transfer NO x
Allowances allocated to the Units in the System for which the Unit Owner has an Ownership

Interest that are made available in that calendar year solely as a result of:

a. the installation and operation of any NO x air pollution control equipment that is

not otherwise required under this Consent Decree, and is not otherwise required

by law;

b. the use of an SCR prior to the date established by this Consent Decree; or

c. achievement and maintenance of an Emission Rate below an applicable 30

- Day

Rolling Average Emission Rate and 12-Month Rolling Average Emission Rate for

NO x ;

provided that such Unit Owner is also in complia nce for that calendar year with all emission

limitations for NO x set forth in this Consent Decree. Each Unit Owner shall ensure the reporting

of the generation of such Super- Compliant Allowances in accordance with Section XII (Periodic

Reporting) of this Consent Decree.

J. Method for Surrender of NO x Allowances

99. Each Unit Owner shall Surrender, or transfer to a non- profit third

- party selected

by that Unit Owner for Surrender, all NO x Allowances required to be Surrendered pursuant to

23Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 27 of 107

Paragraph 9 6 by June 30 of the immediately following calendar year. If any NO x Allowances

required to be Surrendered under this Consent Decree are transferred directly to a non- profit

third -party, the Unit Owner shall include a description of such transfer in the nex t report

submitted to EPA pursuant to Section XII (Periodic Reporting) of this Consent Decree. Such

report shall: (a) identify 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 third periodic report due after the transfer of any

NO x Allowances, the Unit Owner 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 100 within one year after the Unit Owner transferred the NO x

Allowances to them. The Unit Owner shall not have complied with the NO x Allowance

Surrender requirements of this Paragraph until all third- party recipient(s) have actually

Su rrendered the transferred NO x Allowances to EPA.

100. For all NO x Allowances required to be Surrendered, each Unit Owner shall, with

respect to the NO x Allowances that the Unit Owner is to Surrender, ensure that a NO x Allowance

transfer request form is first submitted to EPA’s Office of Air and Radiation’s Clean Air Markets

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. Such NO x Allowance

transfer reques ts may be made in an electronic manner using the EPA’s Clean Air Markets

Division Business System, or similar system provided by EPA. As part of submitting these

24Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 28 of 107

transfer requests, each Unit Owner shall ensure that the transfer of its NO x Allowances are

irrevocably authorized and that the source and location of the NOx Allowances being

Surrendered are identified by name of account and any applicable serial or other identification

numbers or station names.

VI. SO 2 EMISSION REDUCTIONS AND CONTROLS

A. SO 2 Emission Limitations and Control Performance Requirements at Columbia Station_____________________________________________

101. WPL, MGE, and WPSC shall install DFGDs at Columbia Unit 1 and Columbia

Unit 2 on or before December 31, 2014. Commencing on January 1, 2015, and continuing

thereafter, WPL, MGE, and WPSC shall ensure the Continuous Operation of the DFGDs.

Commencing no later than 30 Operating Days after January 1, 2015, WPL, MGE, and WPSC

shall ensure Co ntinuous Operation of the DFGDs so that Units 1 and 2 achieve and maintain a

30- Day Rolling Average Emission Rate for SO 2 of no greater than 0.075 lb/mmBTU at each

Unit.

B

. SO 2 Emission Limitations and Control Performance Requirements at Edgewater Stati on___________________________________________

102. WPL shall install a DFGD at Edgewater Unit 5 on or before December 31, 2016.

Commencing on January 1, 2017, and continuing thereafter, WPL shall Continuously Operate

the DFGD. Commencing no later than 30 Operating Days after January 1, 2017, WPL shall

Continuously Operate the DFGD so that Unit 5 achieves and maintains a 30- Day Rolling

Average Emission Rate for SO 2 of no greater than 0.075 lb/mmBTU.

103. Commencing no later than 30 Operating Days after the Date of Entry of this

Consent Decree, and continuing thereafter, WPL and WPSC shall achieve and maintain a 12-

25Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 29 of 107

Month Rolling Average Emission Rate for SO 2 of no greater than 0.700 lb/mmBTU for

Edgewater Unit 4.

C. Unit

- Specific Annual Tonnage Cap for SO 2 for Edgewater Unit 3

104. Commencing with calendar year 2013, and continuing each calendar year

thereafter until the date the Unit is Retired, Refueled, or Repowered as required by Paragraph 81,

WPL shall not exceed a Unit -Specific Annual Tonnage Cap of 700 Tons of SO 2 per year at

Edgewater Unit 3.

D. SO 2 Emission Limitations and Control Requirements at Nelson Dewey Units 1 and 2

105. Commencing on the first Day of the month following the Date of Entry of this

Consent Decree, and continuing thereafter, WPL shall achieve an d maintain a combined 12-

Month Rolling Average Emission Rate for SO 2 at Nelson Dewey Units 1 and 2 of no greater than

0.800 lb/mmBTU.

E. Plant

- Wide Annual SO 2 Tonnage Limitation

.

106. For each calendar year as specified below, the Unit Owners of each Plant sh all,

with respect to the Plant(s) in which they have an Ownership Interest, ensure that the following

Plant -Wide Annual Tonnage Limitations for SO 2 are not exceeded for the Plants in which they

have an Ownership I nterest:

Plant For the Calendar Year Plant

- Wide Cap (TPY) (Unit Owner(s) ) Specified Below

Nelson Dewey Units 1 & 2 Each calendar year from 2013 through 2015 6,300

(WPL) 2016 and continuing each calendar year thereafter 0

Each calendar year from 2013 28,537

26Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 30 of 107

Columbia Units 1 & 2 through 2014

(WPL, MGE , and WPS C) 2015 and continuing each calendar year thereafter 3,286

Edgewater Units 3, 4 & 5 Each calendar year from 2013 through 2015 14,500

(WPL for Units 3 & 5; 2016 12,500 WPL and WPSC for Unit 4 only) Each calendar year from 2017 through 2018 6,000

2019 and continuing each

calendar year thereafter 1,100

F. Monitoring of SO 2 Emissions

107. In determining a 30 -Day Rolling Average Emission Rate for SO 2 or a 12-Month

Rolling Average Emission Rate for SO 2 , Unit Owners shall, with respect to Units in which they

have an Ownership Interest, ensure the use of SO 2 emission data obtained from a CEMS in

accordance with the procedures of 40 C.F.R. Part 75, except that SO 2 emissions data need not be

bias adjusted and the missing data substitution procedures of 40 C.F.R. Part 75 shall not apply to

such determinations. Diluent capping (i.e., 5% CO 2 ) will be applied to the SO 2 E mission R ate

for any hours where the measured CO 2 concentration is less than 5% following the procedures in

40 C.F.R. Part 75, Appendix F, Section 3.3.4.1.

108. For purposes of determining compliance w ith any Plant -Wide Annual Tonnage

Limitation and Unit -Specific Annual Tonnage Cap for SO 2 , Unit Owners shall, with respect to

Units in which they have an Ownership Interest, ensure the use of SO 2 emission data obtained

from a CEMS in accordance with the pr ocedures specified in 40 C.F.R. Part 75.

G. Use and Surrender of SO 2 Allowances

109. Except as may be necessary to comply with Section XIV (Stipulated Penalties),

no Unit Owner shall use SO 2 Allowances to comply with any requirement of this Consent

27Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 31 of 107

Decree at Plants in which they have an Ownership Interest, including by claiming compliance

with any emission limitation required by this Consent Decree by using, tendering, or otherwise

applying SO 2 Allowances to offset any excess emissions.

110. Except as provided in this Consent Decree, and specifically in P arag raphs 111 and

112, beginning in calendar year 2013 and continuing each calendar year thereafter, no Unit

Owner shall sell, bank, trade, or transfer any SO 2 Allowances allocated to Units in the System.

111. Beginning in calendar year 2013, and continuing each calendar year thereafter,

the Unit Owners shall ensure the Surrender of all SO 2 Allowances allocated to the Units in the

System in which they have an Ownership Interest for that calendar year that are not needed to

meet federal and/or state CAA regulatory requirements for (a) the System Units, or (b) any

electricity generating unit in the State of Wisconsin in which any Unit Owner has an Operational

Interest or Ownership Interest, that is subject to a federal consent decree addressing PSD and/or

Nonattainment NSR violations to which the United States is a party.

112. Nothing in this Consent Decree shall prevent any Unit Owners from purchasing or

otherwise obtaining SO 2 Allowances from another source or from another Unit Owner for

purposes of complying with federal and/or state CAA regulatory requirements to the extent

otherwise allowed by law. The requirements of this Consent Decree pertaining to Unit Owners’

use and S urrender of SO 2 Allowances are permanent and are not subject to any termination

provision of this Consent Decree.

H. Super

- Compliant SO 2 Allowances

113. Notwithstanding Paragraphs 110 and 111, in each calendar year beginning in

2013, and continuing thereafter, each Unit Owner may sell, bank, use, trade, or transfer SO 2

28Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 32 of 107

Allowances allocated to the Units in the System for which they have an Ownership Interest that

are made available in that calendar year solely as a result of:

a. the installation and operation of any SO 2 air pollution control equipment that is

not otherwise required under this Consent Decree, and is not otherwise required

by law;

b. the use of DFGD prior to the date established by this Consent Decree; or

c. achievement and maintenance of an Emiss ion Rate below an applicable 30- Day

Rolling Average Emission Rate and 12-Month Rolling Average Emission Rate for

SO 2 ;

provided that such Unit Owners are also in compliance for that calendar year with all emission

limitations for SO 2 set forth in this Cons ent Decree. Each Unit Owner shall ensure the reporting

of the generation of such Super- Compliant Allowances in accordance with Section XII (Periodic

Reporting) of this Consent Decree.

I. Method for Surrender of SO 2 Allowances.

114. Each Unit Owner shall Surrender, or transfer to a non- profit third

- party selected

by that Unit Owner for Surrender, all SO 2 Allowances required to be Surrendered pursuant to

Paragraph 111 by June 30 of the immediately following calendar year. If any SO 2 Allowances

required to be Surrendered under this Consent Decree are transferred directly to a non- profit

third -party, the Unit Owner shall include a description of such transfer in the next report

submitted to EPA pursuant to Section XII (Periodic Reporting) of this Consent Decr ee. Such

report shall: (a) identify the non

- profit third

- party recipient(s) of the SO 2 Allowances and list the

serial numbers of the transferred SO 2 Allowances; and (b) include a certification by the third

29Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 33 of 107

party recipient(s) stating that the recipient(s) will not sell, trade, or otherwise exchange any of

the SO 2 Allowances and will not use any of the SO 2 Allowances to meet any obligation imposed

by any environmental law. No later than the third periodic report due after the transfer of any

SO 2 Allowances, the Unit Owner 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 115 within one year after the Unit Owner transferred the SO 2

Allowances to them. The Unit Owner 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.

115. For all SO 2 Allowances required to be Surrendered, each Unit Owner shall, with

respect to its SO 2 Allowances that the Unit Owner is to Surrender, ensure that an SO 2 Allowance

transfer request form is first submitted to EPA’s Office of Air and Radiation’s Clean Air Markets

Division directing the tr ansfer of such SO 2 Allowances to the EPA Enforcement Surrender

Account or to any other EPA account that EPA may direct in writing. Such SO 2 Allowance

transfer requests may be made in an electronic manner, using the EPA’s Clean Air Act Markets

Division Business System, or similar system provided by EPA. As part of submitting these

transfer requests, each Unit Owner shall ensure that the trans fer of its SO 2 Allowances are

irrevocably authorized and that the source and location of the SO 2 Allowances being Surrendered

are identified – by name of account and any applicable serial or other identification numbers and

station names.

30Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 34 of 107

VII. PM EMISSION REDUCTIONS AND CONTROLS

A. Optimization of ESPs and Baghouses

116. By no later than 90 Days from the Date of Entry of this Consent Decree, and

continuing thereafter, with respect to each Unit in which they have an Ownership Interest, the

Unit Owners s hall ensure the Continuous Operation of each PM Control Device on such Unit to

maximize PM emission reductions at all times when the Unit is in operation. Notwithstanding

the foregoing sentence in this Paragraph, the Unit Owners shall not be required to Continuously

O perate an ESP on any Unit if a Baghouse is installed and operating to replace the PM Control

Device function of the ESP at that Unit. Except as required during correlation testing under 40

C.F.R. Part 60, Appendix B, Performance Specification 11, and Quality Assurance Requirements

under Appendix F, Procedure 2, as required by this Consent Decree, with respect to each Unit in

which they have an Ownership Interest, the Unit Owners shall, at a minimum, ensure that to the

extent practicable: (a) where the PM Control Device is an ESP, each section of each ESP at such

Unit is fully energized, and where the PM Control Device is a Baghouse, each compartment,

except for any compartment specifically designated and designed as a spare compartment, of

each Baghouse at such Unit remains operational; (b) repair any failed ESP section or Baghouse

compartment at the next planned outage (or unplanned outage of sufficient length); (c) the

automatic control systems on each ESP at such Unit are operated to maximize PM collection

efficiency, where applicable; (d) each opening in the casings, ductwork, and expansion joints for

each ESP and each Baghouse at such Unit is inspected and repaired during the next planned Unit

outage (or unplanned outage of sufficient length ) to minimize air leakage; (e) the power levels

delivered to each ESP at such Unit are maintained, where applicable, consistent with

31Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 35 of 107

manufacturers’ specifications, the operational design of the Unit, and good engineering practices;

(f) the plate

- cleaning a nd discharge- electrode

- cleaning systems for each ESP at such Unit are

optimized, where applicable, by varying the cycle time, cycle frequency, rapper- vibrator

intensity, and number of strikes per cleaning event; and (g) for each such Unit with one or more

Baghouses, a bag leak detection program is developed and implemented to ensure that leaking

bags are promptly replaced.

B. Operation and Performance Requirements for PM Controls at Columbia Station

117. WPL, MGE, and WPSC shall ensure a Baghouse is installed on each of Columbia

Units 1 and 2. Commencing not later than December 31, 2014, and continuing thereafter, WPL,

MGE, and WPSC shall ensure each such Baghouse is Continuously Operated so that it achieves

and maintains a filterable PM Emission Rate of no g reater than 0.015 lb/mmBTU for each Unit

based on a 24-Hour Rolling Average Emission Rate determined by PM CEMS . Notwithstanding

this PM Emission Rate requirement, WPL, MGE, and WPSC may ensure that each of Columbia

Units 1 and 2 achieves a filterable PM Emission Rate of no greater than 0.030 lb/mmBTU during

periods of level 3 (high range) correlation testing under PS-11, Section 8.6(4), provided that such

correlation testing is conducted in accordance with the procedures approved by EPA as part of

the cor relation plan required by Paragraph 126. Once a Baghouse is in Continuous Operation at

a Unit, the PM optimization requirements of Paragraph 116 related to an ESP at that Unit are no

longer applicable.

C. Operation and Performance Requirements for PM Controls at Edgewater Station

118. WPL shall install a Baghouse on Edgewater Unit 5, and commencing on or before

December 31, 2016, and continuing thereafter, shall Continuously Operate such Baghouse so

32Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 36 of 107

that it achieves and maintains a filterable PM Emission R ate of no greater than 0.015 lb/mmBTU

based on a 24-Hour R olling A verage Emission Rate determined by PM CEMS. Notwithstanding

this PM Emission Rate requirement, WPL may ensure that Edgewater Unit 5 achieves a

filterable PM Emission Rate of no greater than 0.030 lb/mmBTU during periods of level 3 (high

range) correlation testing under PS-11, Section 8.6(4), provided that such correlation testing is

conducted in accordance with the procedures approved by EPA as part of the correlation plan

required by Paragr aph 126. Once a Baghouse is in Continuous Operation at a Unit, the PM

optimization requirements of Paragraph 116 related to an ESP at that Unit are no longer

applicable.

119. Commencing no later than December 31, 2013, and continuing thereafter, WPL

and WPSC shall ensure the Continuous Operation of the existing ESP on Edgewater Unit 4 so

that it achieves and maintains a filterable PM Emission Rate of no greater than 0.030 lb/mmBTU

based on a 3-hour average.

D. Operation and Performance Requirements for PM Con trols at Nelson Dewey Units 1 and 2

120. Commencing immediately upon the Date of Entry of this Consent Decree, and

continuing thereafter, WPL shall achieve and maintain at Nelson Dewey Units 1 and 2 a

filterable PM E mission Rate of no greater than 0.100 lbs/ mmBTU at each Unit based on a 3 -hour

average, and shall also comply with other applicable emission limitations.

E. Annual PM Stack Tests

121. Commencing in calendar year 2013, and continuing annually thereafter, for each

Unit in which they have an Ownership In terest, Unit Owners shall ensure that stack tests are

conducted for PM once per calendar year pursuant to Paragraphs 122 and 123, unless the Unit is

33Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 37 of 107

Retired, Refueled, or Repowered to Natural Gas by December 31 of the prior calendar year, at

which point this requirement shall no longer apply.

122. To determine compliance with the PM Emission Rates established in Paragraphs

119 and 120, the Unit Operator shall ensure that EPA Method 5 (filterable portion only), or any

alternate method approved by EPA under the terms of this Consent Decree, is employed during

stack testing required by Paragraph 1 21. Each stack test shall consist of three separate runs

performed under representative operating conditions not including periods of startup, shutdown,

or Malfunction. The sampling time for each run shall be at least 60 minutes and the volume of

each run shall be at least 0.85 dry standard cubic meters (30 dry standard cubic feet). The Unit

Operator shall ensure that the PM Emission Rate from the stack test results is calculated in

accordance with 40 C.F.R. § 60.8(f). The results of each PM stack test shall be submitted to

Plaintiffs by the Unit Operator within 60 Days of completion of each test.

123. Commencing in calendar year 2013, and continuing annually thereafter, for each

Unit in which they have an Ownership Interest, Unit Owners shall ensure that a PM stack test is

conducted for condensable PM using the reference methods and procedures set forth at 40 C.F.R.

Part 51, Appendix M, Method 202, or any alternate method approved by EPA under the terms of

this Consent Decree. Each test shall consist of three separate runs performed under

representative operating conditions not including periods of startup, shutdown, or Malfunction.

The sampling time for each run shall b e at least 60 minutes and the volume of each run shall be

at least 0.85 dry standard cubic meters (30 dry standard cubic feet). The Unit Operator shall

ensure that the number of pounds of condensable PM emitted per million BTU of heat input

(lb/mmBTU) fro m the stack test results are calculated in accordance with 40 C.F.R. § 60.8(f).

34Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 38 of 107

The results of the PM stack test conducted pursuant to this Paragraph shall not be used for the

purpose of determining compliance with the PM Emission Rates required by this Consent

Decree. The results of each PM stack test shall be submitted to Plaintiffs by the Unit Operator

within 60 Days of completion of each test.

124. When the Unit Operator submits the applications for amendment to the Title V

Permits pursuant to Paragraph 202, those applications shall include a Compliance Assurance

Monitoring (“CAM”) plan, under 40 C.F.R. Part 64, for the PM Emission Rate in Paragraphs

117, 118, 119, and 120. The PM CEMS required under Paragraph 125 may be used in that CAM

plan.

F. PM Contin uous Emissions Monitoring Systems (“CEMS”)

125. By no later than December 31, 2014, WPL, MGE, and WPSC shall ensure that

PM CEMS are installed, correlated, maintained , and operating on Columbia Units 1 and 2. By

no later than December 31, 2016, WPL shall install, correlate, maintain, and operate a PM

CEMS on Edgewater Unit 5. The PM CEMS shall comprise a continuous particle mass monitor

measuring filterable particulat e matter concentration, directly or indirectly, on an hourly average

basis and a diluent monitor used to convert the concentration to units expressed in lb/mmBTU.

The PM CEMS installed at each Unit must be appropriate for the anticipated stack conditions

and capable of measuring filterable PM concentrations on an hourly average basis. For each

Unit in the System that is subject to this Paragraph, the Unit Owners with an Ownership Interest

in such Unit shall ensure that there will be maintained, in an elect ronic database that maintains

data for at least five years, the hourly average emission values of all PM CEMS at such Unit in

lb/mmBTU. Except for periods of monitor Malfunction, maintenance, or repair, for each Unit in

35Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 39 of 107

the System that is subject to this Paragraph , the Unit Operator shall Continuously Operate the

PM CEMS at all times when the Unit it serves is operating.

126. By no later than December 31, 2013, WPL, MGE, and WPSC shall ensure that a

plan for the installation and correlation of the PM CEMS for Columbia Units 1 and 2 is

submitted to EPA for review and approval pursuant to Section XIII (Review and Approval of

Submittals) of this Consent Decree. By no later than December 31, 2015, WPL shall submit to

EPA for review and approval pursuant to Section XIII (Review and Approval of Submittals) of

this Consent Decree a plan for the installation and correlation of the PM CEMS for Edgewater

Unit 5.

127. By no later than June 30, 2014, WPL, MGE, and WPSC shall ensure that a

proposed Quality Assurance/Quality Control (“QA/QC”) protocol for Columbia Units 1 and 2 is

submitted to EPA for review and approval pursuant to Section XIII (Review and Approval of

Submittals) of the Consent Decree. By no later than June 30, 2016, WPL shall submit to EPA

for review and approval pursuant to Section XIII (Review and Approval of Submittals) of this

Consent Decree a proposed Quality Assurance/Quality Control (“QA/QC”) protocol that shall be

followed for the PM CEMS at Edgewater Unit 5.

128. In developing both the plan for installation and correlation of the PM CEMS and

the QA/QC protocol, Unit Owners shall ensure that the criteria set forth in 40 C.F.R. Part 60,

Appendix B, Performance Specification 11, and 40 C.F.R. Part 60, Appendix F, Procedure 2 are

used. Following EPA’s approval of the plan described in Paragraph 126 and the QA/QC

protocol described in Paragraph 127 , Unit Owners shall thereafter operate the PM CEMS in

accordance with the approved plan and QA/QC protocol.

36Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 40 of 107

129. By no later than December 31, 2014, for Columbia Units 1 and 2, and by no later

than December 31, 2016, for Edgewater Unit 5, WPL, MGE, and WPSC for Columbia Units 1

and 2 and WPL for Edgewater Unit 5 shall ensure that the PM CEMS at the Columbia and

Edgewater Generating Stations are installed, correlated, maintai ned, and Continuously Operated.

WPL, MGE, and WPSC for Columbia Units 1 and 2 and WPL for Edgewater Unit 5 shall ensure

that performance specification tests on the PM CEMS are conducted, and shall ensure

compliance with the PM CEMS installation and correl ation plans submitted to and approved by

EPA in accordance with Paragraphs 12 6 and 127 is demonstrated. The PM CEMS shall be

operated in accordance with the approved plan and QA/QC protocol. Pursuant to Section XII

(Periodic Reporting), the data recorded by the PM CEMS during Unit operation, expressed in

lb/mmBTU on a 24-Hour Rolling Average, shall be reported in electronic format to EPA,

identifying in the report any PM E mission R ates in excess of the applicable PM Emission Rate

and any concentrations me asured by the PM CEMS that are greater than 125% of the highest PM

concentration level used in the most recent correlation testing performed pursuant to

Performance Specification 11 in 40 C.F.R. Part 60, Appendix B.

130. For purposes of determining compliance with Paragraphs 119 and 120 of this

Consent Decree, stack testing using EPA Method 5 (filterable only) or any alternate method

approved by EPA under the terms of this Consent Decree shall be the compliance method for the

PM Emission Rates established by thi s Consent Decree.

131. 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. 8,314 (Feb. 24, 1997)), or

37Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 41 of 107

monitoring requirements of 40 C.F.R. Part 70, concerning the use of data for any purpose under

the Act.

VIII. PROHIBITION ON NETTING CREDITS OR OFFSETS

132. Except as provided in Paragraph 133, emission reductions that result from actions

to be taken by Unit Owners 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 under the CAA’s

Nonattainment NSR and PSD programs.

133. The limitations on the generation and use of Netting credits and offsets set forth in

the previous Paragraph do not apply to emission reductions achieved by a particular System Unit

that are greater than those required under this Consent Decree for that particular System Unit.

For purposes of this Paragraph, emission reductions from a System Unit are greater than those

required under this Consent Decree if they result from such Unit’s compliance with federally

enforceable emission limits that are more stringent than those limits imposed on the Unit under

this Consent Decree and under applicable provisions of the CAA or the Wisconsin SIP.

134. Nothing in this Consent Decree is intended to preclude the emission reductions

generated under this Consent Decree from being considered by the applicable state regulatory

agency or EPA for the purpose of attainment demonstrations submitted pursuant to § 110 of the

Act, 42 U.S.C. § 7410, or in determining impacts on Na tional Ambient Air Quality Standards,

PSD increment, or air quality related values, including visibility, in a Class I area.

38Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 42 of 107

IX. ENVIRONMENTAL MITIGATION PROJECTS

135. Each Defendant shall implement one or more of the Environmental Mitigation

Projects (“Proj ects”) described in Appendix A to this Consent Decree, or any other

Environmental Mitigation Project approved by the EPA pursuant to Section XIII (Review and

Approval of Submittals), in compliance with the approved plans and schedules for such Projects

and other terms of this Consent Decree. In implementing the Projects, each Defendant shall

spend no less than the amount described in Appendix A. The obligation of each Defendant to

i mplement and finance the Projects shall be limited to each individual Defendant’s obligation as

set forth in Appendix A. Defendants shall not include their own personnel costs in overseeing

the implementation of the Projects as Project Dollars.

136. The Projects described in Appendix A to be performed by each Defendant shall

be for the purpose of beneficially restoring and/or mitigating the environments that EPA and/or

the Sierra Club allege were damaged by the operation of the Defendants’ Units, including

en vironments allegedly damaged within the Defendants’ service territories.

137. Each Defendant shall maintain, and present to EPA and/or Sierra Club upon

request, documents to substantiate the Project Dollars expended to implement the Defendant’s

Projects describ ed in Appendix A, and shall provide these documents to EPA and/or Sierra Club

within 60 Days of a request for the documents.

138. All plans and reports prepared by Defendants for their respective P rojects

pursuant to the requirements of this Section IX of the Consent Decree and required to be

submitted to EPA shall be publicly available from Defendants without charge in paper or

electronic format.

39Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 43 of 107

139. For each Project undertaken, each Defendant shall certify, as part of each plan

submitted to EPA for the Project, th at Defendant is not otherwise required by law to perform the

Project described in the plan, that Defendant is unaware of any other person who is required by

law to perform the Project, and that Defendant will not use any Project, or portion thereof, to

sat isfy any obligations that it may have under other applicable requirements of law, including but

not limited to any applicable renewable or energy efficiency portfolio standards.

140. Each Defendant shall use good faith efforts to secure as much environmental

be nefit as possible for the Project Dollars it expends, consistent with the applicable requirements

and limits of this Consent Decree.

141. If a Defendant elects (where such an election is allowed) to undertake a Project by

contributing funds to another person or entity that will carry out the Project in lieu of one or

more Defendant(s), but not including a Defendant’s agents or contractors, that person or

instrumentality must, in writing: (a) identify its legal authority for accepting such funding; and

(b) identify its legal authority to conduct the Project for which one or more Defendant

contributes the funds. Regardless of whether one or more Defendant(s) elects (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, Defendant(s) acknowledge that a

Defendant will receive credit for the expenditure of such funds as Project Dollars only if the

Defendant(s) demonstrates that the funds have been actually spent by either one or more of the

Defendants or by the person or instrumentality receiving them, and that such expenditures met

all requirements of this Consent Decree.

40Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 44 of 107

142. Each Defendant shall comply with the reporting requirements described in

Appendix A.

143. Within 90 Days following the completion of each Project required under this

Consent Decree (including any applicable periods of demonstration or testing), the Defendant

performing the Project shall submit to the United States and Sierra Club a report that documents

the date that the Project was completed, Defendant’s results of implementing the Project,

including the emission reductions or other environmental benefits achieved, and the Project

Dollars expended by the Defendant in implementing the Project.

X. CIVIL PENALTY

144. Within 30 Days after the Date of Entry of this Consent Decree, Defendants shall

pay to the United States a civil penalty in the amount of $2,450,000. The civil penalty shall be

paid by Electronic Funds Transfer (“EFT”) to the United S tates Department of Justice, in

accordance with current EFT procedures, referencing USAO File Number 2010- CV -00328 and

DOJ Case Number 90 -5-2-1-09878 and the civil action case name and case number assigned to

the United States’ enforcement action in this c ase. 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 Western District of

Wisconsin. Any funds received after 2:00 p.m. EDT shall be credited on the next Working 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 case number, to the

Depar tment of Justice and to EPA in accordance with Section XIX (Notices) of this Consent

Decree.

41Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 45 of 107

145. 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 pre scribed 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.

146. Payments made pursuant to this Section are penalties within the meaning of

Section 162(f) of the Internal Revenue Code, 26 U.S.C. § 162(f), and are not tax-deductible

expenditures for purposes of federal law.

147. The obligations of Defendants to pay the civil penalty amount owed the United

States under this Cons ent Decree are joint and several. In the event of the failure of Defendants

to make the civil penalty payment amount required under this Consent Decree, the remaining

Defendants shall be responsible for such payment.

XI. RESOLUTION OF CLAIMS

A. Resolution of Civil Claims

148. Claims of the United States Based on Modifications Occurring Before the Date of

Lodging of this Consent Decree . Entry of this Consent Decree shall resolve all civil claims of

the United States against the Defendants that arose from any m odifications commenced at any

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

those modifications alleged in the NOV/FOV issued by EPA to Defendants on December 14,

2009, and the Complaint filed in this civil action, under any or all of: (a) Part C or D of

Subchapter I of the CAA, 42 U.S.C. §§ 7470-7492, 7501-7515, and the implementing PSD and

Nonattainment NSR provisions of the Wisconsin SIP; (b) Section 111 of the CAA, 42 U.S.C. §

7411, and 40 C.F.R. § 60.14; and (c) Title V of the CAA, 42 U.S.C. §§ 7661-7661f, but only to

42Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 46 of 107

the extent that such Title V claims are based on Defendants’ failure to obtain an operating permit

that reflects applicable requirements imposed under Part C or D of Subchapter I of the CAA.

149. Claims of the United States Based on Modifications after the Date of Lodging of

this Consent Decree . Entry of this Consent Decree also shall resolve all civil claims of the

United States that arise from a modification commenced before December 31, 20 18, for

pollutants regulated under Part C or D of Subchapter I of the CAA and under regulations, which

are promulgated thereunder as of the Date of Lodging, where:

a. such modification is commenced at any System Unit after the Date of Lodging of

this Cons ent Decree, or

b. 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 CAA, the Wisconsin SIP, and under the regulatio ns in effect as of the Date of Lodging

of this Consent Decree. The claims resolved by this Paragraph shall not include claims based on

modifications for Greenhouse Gases and sulfuric acid mist.

150. Reopener . The resolution of the United States’ civil claims against the Unit

Owners, as provided by this Subsection A, is subject to the provisions of Subsection B of this

Section. The resolution of claims against We Energies for claims based on modifications prior to

the lodging of the Consent Decree is not subject to Subsection B of this Section.

151. Claims of the Sierra Club.

a. Entry of this Consent Decree shall resolve all civil claims of the Sierra Club, and

the Sierra Club hereby releases all claims it made or could have made against the

43Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 47 of 107

Defendants that arose, dir ectly or indirectly, from any modifications commenced

at any System Unit prior to the Date of Lodging of this Consent Decree, including

but not limited to those set forth in the NOV/FOV issued by EPA to Defendants

on December 14, 2009; the Complaint filed in this civil action, in Sierra Club v.

Wisconsin Power and Light Company , United States District Court, Western

District of Wisconsin, Case No. 3:10- cv -511- wmc; Sierra Club v. Wisconsin

Power and Light Company , United States District Court, Eastern Distri ct of

Wisconsin, Case No. 2:10- cv -00835- aeg; and the Notice of Intent to Sue Letters

issued by Sierra Club to Defendants on October 10, 2009, December 14, 2009,

and December 21, 2009, and related to the System Units, under any or all of: (a)

Part C or D of Subchapter I of the CAA, 42 U.S.C. §§ 7470-7492, 7501-7515, and

the implementing PSD and Nonattainment NSR provisions of the Wisconsin SIP;

(b) Section 111 of the CAA, 42 U.S.C. § 7411, and 40 C.F.R. Section 60.14; (c)

Title V of the CAA, 42 U.S.C. §§ 7661-7661f, arising prior to the Date of

L odging of the Consent Decree at any of the System Units.

b. Entry of this Consent Decree shall also resolve all civil claims of the Sierra Club

against the Defendants, known or unknown, as to the System Units that arose,

directly or indirectly, from violations of opacity standards, carbon monoxide,

under 42 U.S.C. § 7412, under the Wisconsin SIP, or any federally- enforceable

air pollution control permit through the D ate of Lodging of this Consent Decree.

c. Sierra Club furth er agrees that it will not pursue Best Available Control

Technology or Lowest Achievable Emission Rate limits or New Source Review

44Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 48 of 107

applicability determinations related to the System Units in any administrative

action now pending or contemplated (including in response to EPA Clean Air Act

Title V orders related to Columbia and Edgewater) for modifications made prior

to the Date of Lodging of this Consent Decree through any filing with a court, any

administrative adjudication, or any formal comments submitted to any

governmental entity.

d. Sierra Club agrees not to file a legal challenge, including any lawsuit or any

petition for a contested case hearing, or take a litigation position or submit

comments to any governmental agency in any public forum challenging or

criticizing a Unit Owner’s or, if applicable, We Energies’ request(s) for rate

recovery for the costs incurred in achieving compliance with the Consent Decree

and/or the issuance of any permits or other regulatory approvals necessary for the

construction of any environmental control equipment or Environmental

M itigation P roject(s) required by the Consent Decree, except as provided in the

section of the Consent Decree concerning dispute resolution. Sierra Club further

agrees not to provide legal assistance by any Sierra Club staff, contract with any

outside counsel to prov ide legal assistance, or fund any third parties in any legal

challenge, including any lawsuit or any petition for a contested case hearing, or in

any public or private initiative challenging or criticizing the Unit Owners’

request(s) for rate recovery for the costs incurred in achieving compliance with

the Consent Decree and/or the issuance of any permits or other regulatory

approvals necessary for the construction of any environmental control equipment

45Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 49 of 107

or Environmental M itigation Project(s) required by the Consent Decree.

e. Sierra Club further releases all claims it made or could have made and will

withdraw and cause to be dismissed with prejudice, where appropriate, its petition

and related administrative and federal court litigation arising from In the Mat ter of

Wisconsin Power and Light Columbia Generating Station , U.S. EPA, Petition No.

V-2008-1 (October 8, 2009); In the Matter of Alliant Energy – WPL Edgewater

Generating Station (August 17, 2010) Petition No. V-2009-2; Petition to Reopen

and Correct the Title V Operating Permits Issued By the Wisconsin Department

of Natural Resources to the Nelson Dewey Generating Station in Cassville, Grant

County, Wisconsin, Permit No. 12201450-P11; and Sierra Club v. Lisa Jackson

,
United States Court, Western District of Wisconsin, Case No. 3:11- cv -00116.

f. Entry of this Consent Decree also shall resolve all civil claims of the Sierra Club

related to the System Units that arise from a modification commenced before

December 31, 2018, pursuant to Part C or D of the Act or 42 U.S.C. § 7411, that

arise prior to December 31, 2018, from the Title V program, 42 U.S.C. §§ 7661-

7661d, that arise prior to December 31, 2018, from emissions standards or

limitations in the existing Wisconsin SIP, or that arise prior to December 31,

2018, from a hazardous air pollutant standard in effect or proposed as of the date

of the entry of this Consent Decree and that is promulgated pursuant to 42 U.S.C.

§ 7412. The future claims resolved by this Paragraph shall not include claims

based on modifi cations that increase Greenhouse Gases or sulfuric acid mist

emissions.

46Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 50 of 107

g. Any dispute as to Paragraph 151 is subject to the Dispute Resolution provisions of

this Consent Decree, including the written notice and right to cure provisions.

Any remedy arising f rom commitments of Sierra Club pursuant to this Consent

Decree is limited to equitable relief ( i.e ., specific performance) and shall not

include monetary damages.

B. Pursuit of Civil Claims Otherwise Resolved by Subsection A

152. Bases for Pursuing Resolved Cl aims for the System . If: i) a Unit Owner or

Owners violate a Plant -Wide Annual Tonnage Limitation for SO 2 or NO x applicable to a Plant in

which it or they have an Ownership Interest; or ii) if a Unit Owner or Owners fail by more than

90 Days to Retire, Refuel, or Repower a Unit as required by this Consent Decree; or iii) if a Unit

Owner or Owners fail by more than 90 Days to install, upgrade, or commence Continuous

Operation of any emission control device required pursuant to this Consent Decree; or iv) if a

Unit Owner or Owners fail by more than 90 D ays to achieve any Emission Rate or other

obligation or limitation required pursuant to this Consent Decree for a Unit or Plant in which it

or they have an Ownership Interest; then the United States may pursue any claim against that

Unit Owner or Owners with respect to the Unit or Plant at issue that is otherwise resolved under

Subsection XI. A. (Resolution of Civil Claims) against the Unit Owner or Owners of that affected

Unit or Plant, subject to subparagraphs a. and b. below.

a. For any claims based on modifications undertaken at an Other Unit ( i.e., any unit

of the System that is not an Improved Unit for the pollutant in question), claims

may be pursued only regarding the pollutant that causes the Unit’s designation as

an Other Unit where the modification(s) on which such claim is based was

47Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 51 of 107

commenced within the 5 years preceding the violation or failure specified in this

Paragraph.

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

may be pursued only regarding the pollutant that causes the Unit’s designation as

an Improved Unit 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 5 years preceding the violation or failure specified in this Paragraph.

153. Additional Bases for Pursuing Resolved Claims for Modifications at an Improved

Unit . Solely with respect to the pollutant that causes the Unit’s designation as an Improved Unit,

the United States may also pursue claims against a Unit Owner of an Improved Unit arising from

the Unit Owner’s modification (or collection of modifications) at the Improved Unit that h ave

otherwise been resolved under Subsection XI. A. (Resolution of 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, and (b) individually (or co llectively) increased the

maximum hourly E mission Rate of that Unit for the pollutant that caused the Unit’s designation

as an Improved Unit (as measured by 40 C.F.R. §§ 60.14(b) and (h)) by more than 10%.

154. Additional Bases for Pursuing Resolved Claims for Modification at an Other Unit

. Solely with respect to the pollutant that causes the Unit’s designation as an Other Unit, the

United States may also pursue claims against a Unit Owner of an Other Unit arising from the

Unit Owner’s modification (or collection of modifications) at the Other Unit that have otherwise

been resolved under Subsection XI. A. (Resolution of Civil Claims), if the modification (or

48Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 52 of 107

collection of modifications) at the Other Unit which such claims are based was commenced

within 5 years preceding any of the following events:

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

after the Date of Lodging of this Consent Decree that increases the maximum

hourly E mission Rate for such pollutant that caused the Unit’ s designation as an

Other Unit (NO x or SO 2 ), as measured by 40 C.F.R. §§ 60.14(b) and (h);

b. The aggregate of all Capital Expenditures made at such Other Unit exceed s
$150/kW on the Other Unit’s Boiler Island (based on the generating capacities

identified in this Consent Decree) during the period from the Date of Entry of this

Consent Decree through December 31, 2018 (Capital Expenditures shall be

measured in calendar year 2012 constant dollars, as adjusted by the McGraw- Hill

Engineering News -Record Construction Cost Index); or

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

after the Date of Lodging of this Consent Decree that results in an emissions

increase for such pollutant that caused the Unit’s designation as an Other Unit

(NO x and/or SO 2 ) at such Other Unit, and such increase of such pollutant: (i)

presents, by itself, or in combination with other emissions or sources, “an

imminent and substantial endangerment” within the meaning of Section 303 of

the Act, 42 U.S.C. § 7603; (ii) causes or contributes to violation of a NAAQS in

any Air Quality Control Area that is in attainment with that NAAQS; (iii) causes

or contributes to violation of a PSD increment; or (iv) causes or contributes to any

adverse impact on any formally

- recognized air quality and related values in any

49Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 53 of 107

Class I area. The introduction of any new or changed NAAQS shall not, standing

alon e, provide the showing needed under this Subparagraph (c) to pursue any

claim for modification at an Other Unit resolved u nder Subsection A of this

Section.

XII. PERIODIC REPORTING

155. After entry of this Consent Decree, the Unit Owners shall, with respect to Units in

which they have an Ownership Interest, ensure that there shall be submitted to Plaintiffs a single

periodic rep ort, within 60 Days after the end of each half of the calendar year (January through

June and July through December). We Energies will join in this report for the purpose of

reporting progress on completing its Environmental Mitigation Projects as set for th in Appendix

A until the completion of the Project(s). The report shall include the following information:

a. all information necessary to determine compliance during the reporting period

with: all applicable 30

- Day Rolling Average Emission Rates for NO x , 30- Day

Rolling Average Emission Rates for SO 2 , and 24-Hour Rolling Average Emission

Rates for PM; all applicable 12 -Month Rolling Average Emission Rates for NO x

and all 1 2-Month Rolling Average Emission Rates for SO 2 ; all applicable 3 -hour

average PM Emission Rates; all applicable Unit -Specific Annual Tonnage Caps;

all applicable Plant -Wide Annual Tonnage Caps; the obligation to monitor NO x ,

SO 2 , and PM emissions; the obli gation to optimize PM emission controls; and the

obligation to Surrender NO x Allowances and SO 2 Allowances;

b. all periods of monitor Malfunction, maintenance, and/or repair as provided in

Paragraph 125;

50Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 54 of 107

c. emission reporting and Allowance accounting infor mation necessary to determine

Super- Compliant NO x and SO 2 Allowances that a Unit Owner claims to have

generated in accordance with Paragraphs 98 and 113 through control of emissions

beyond the requirements of this Consent Decree;

d. schedule for the installation or upgrade and commencement of operation of new

or upgraded pollution control devices required by this Consent Decree, including

the nature and cause of any actual or anticipated delays, and any steps taken by

the Unit Owners to mitigate such dela y;

e. all affirmative defenses asserted pursuant to Paragraphs 1 72 to 180 during the

period covered by the progress report;

f. an identification of all periods when any pollution control device required by this

Consent Decree to Continuously Operate was not operating, the reason(s) for the

equipment not operating, and the basis for each applicable Defendant’s

compliance or non-compliance with the Continuous Operation requirements of

this Consent Decree; and

g. a summary of each Defendant’s actions impleme nted and expenditures

(cumulative and in the current reporting period) made pursuant to implementation

of the Environmental Mitigation Projects required pursuant to Section IX.

156. In any periodic report submitted pursuant to this Section XII, Unit Owners may

incorporate by reference information previously submitted under its Title V permitting

requirements, provided that the Unit Owners attach the Title V Permit report (or the pertinent

51Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 55 of 107

portions of such report) and provide a specific reference to the provision s of the Title V Permit

report that are responsive to the information required in the periodic report.

157. In addition to the reports required pursuant to this Section, any Defendant that

violates or deviates from any provision of this Consent Decree shall s ubmit to Plaintiffs a report

on the violation or deviation within 15 Working Days after such Defendant knew or should have

known of the event. In the report, the Defendant shall explain the cause or causes of the

violation or deviation and all measures taken or to be taken by the applicable Defendant to cure

the reported violation or deviation or to prevent such violations or deviations in the future. If at

any time the provisions of this Consent Decree are included in Title V Permits, consistent with

the requirements for such inclusion in this Consent Decree, then the deviation reports required

under applicable Title V regulations shall be deemed to satisfy all the requirements of this

Paragraph.

158. Each report required by this Consent Decree shall be signed by the Responsible

Official as defined in Title V of the Clean Air Act for Columbia, Edgewater, or Nelson Dewey,

as appropriate, or other authorized representative for the Unit Owner or We Energies (with

respect to other Consent Decree requirements

, e.g. , Environmental Mitigation Project status), 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.

52Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 56 of 107

XIII. REVIEW AND APPROVAL OF SUBMITTALS

159. The Unit Owners shall, with respect to the Units in which they have an

Ownership Interest, ensure the submission of each plan, report, or other submission required by

this Consent Decree to Plaintiffs whenever and in the manner such a document is required to be

submitted for review or approval pursuant to this Consent Decree. EPA 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. Within 60 Days of receiving written

comments from EPA, the applicable Unit Owner or Owners shall either: (a) revise the submittal

consistent with the written comments and provide the revised submittal to EPA; or (b) submit the

matter for dispute resolution, including the period of informal negotiations, under Section XVI

(Dispute Resolution) of this Consent Decree.

160. Upon receipt of EPA’s final approval of the submittal, or upon completion of the

submittal pursuant to dispute resolution, the applicable Unit O wner or Owners shall ensure

implementation of the approved submittal in accordance with the schedule specified therein or

another EPA-approved schedule.

161. We Energies shall comply with this Section regarding reporting related to the

Environmental Mitigation Projects undertaken by We Energies as set forth in Appendix A and

the payment of the civil penalty.

XIV. STIPULATED PENALTIES

162. For any failure by one or more Defendants to comply with the terms of this

Consent Decree, and subject to the provisions of Sections XV (Force Majeure) and XVI (Dispute

Resolution) and the other paragraphs in this Section of the Consent Decree, such Defendant or

53Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 57 of 107

Defendants shall pay, within 30 Days after receipt of written demand to such Defendant or

Defendants by the United States, the following stipulated penalties to the United States, as

specified in this Consent Decree.

Consent Decree Violation Stipulated Penalty
a. Failure to pay the civil penalty as specified in Section X (Civil Penalty) of this Consent Decree $10,000 per Day

b. Failure to comply with any applicable 30- Day Rolling Average Emission Rate for NO x or SO 2 $2,500 per Day per violation where the violation is less than 5% in excess of the lb/mmBTU limits

$5,000 per Day per violation where the violation is equal to or greater than 5% but less than 10% in excess of the lb/mmBTU limits

$10,000 per Day per violation where the violation is equal to or greater than 10% in excess of the lb/mmBTU limits
c. Failure to comply with any applicable 12-Month Rolling Average SO 2 Emission Rate, where the violation is less than 5% in excess of the limits set forth in this Consent Decree $200 per D ay per violation

d. Failure to comply with any applicable 12-Month Rolling Average SO 2 Emission Rate, 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 $400 per D ay per violation

e. Failure to comply with any applicable 12-Month Rolling Average SO 2 Emission Rate, where the violation is equal to

o r greater than 10% in excess of the limits set forth in this Consent Decree $800 per D ay per violation

54Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 58 of 107

f. Failure to comply with the applicable Plant-Wide Annual (1) $5,000 per ton for first 100 Tonnage Limitations for NO x established by this Consent tons, $10,000 per ton for each Decree additional ton above 100 tons, plus (2) at the option of the Owner(s) of the Unit at issue either the Surrender of NO x Allowances in an amount equal to two times the number of tons of NO x emitted that exceeded the Plant -Wide Annual Tonnage Limitation for NO x , or the payment of $2,500 per ton for an amount of tons equal to two times the number of tons of NO x emitted that exceeded the Plant -Wide Annual Tonnage Limitation for NO x g. Failure to comply with Unit

- Specific Annual NO x (1) $5,000 per ton for first 100 Tonnage Cap for Edgewater Unit 3 tons, $10,000 per ton for each additional ton above 100 tons, plus (2) at the option of the Owner(s) of the Unit at issue either the Surrender of NO x Allowances in an amount equal to two times the number of tons of NO x emitted that exceeded the Unit- Specific Annual Tonnage Cap, or the payment of $2,500 per ton for an amount of tons equal to two times the number of tons of NO x emitted that exceeded the Unit

- Specific Annual Tonnage Cap

55Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 59 of 107

h. Failure to comply with any applicable Plant-Wide Annual SO 2 Tonnage Limitation required by this Consent Decree.

i. Failure to comply with any applicable Unit

- Specific Annual SO 2 Tonnage Cap for Edgewater Unit 3 (1) $5,000 per ton for the first 100 tons over the limit, and $10,000 per ton for each additional ton over the limit, plus (2) at the option of the Owner(s) of the Unit at issue either the Surrender of SO 2 Allowances in an amount equal to two times the number of tons of SO 2 emitted that exceeded Plant -Wide Annual Tonnage Limitation, or the payment of $2,500 per ton for an amount of tons equal to two times the number of tons of SO 2 emitted that exceeded the Plant

- Wide Annual Tonnage Limitation
(1) $5,000 per ton for the first 100 tons over the limit, and $10,000 per ton for each additional ton over the limit, plus (2) at the option of the Owner(s) of the Unit at issue either the Surrender of SO 2 Allowances in an amount equal to two times the num ber of tons of SO 2 emitted that exceeded Unit -Specific Annual Tonnage Cap, or the payment of $2,500 per ton for an amount of tons equal to two times the number of tons of SO 2 emitted that exceeded the Unit

- Specific Annual Tonnage Cap

56Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 60 of 107

j. Failure to comply with any applicable PM Emission Rate, where the violation is less than 5% in excess of the lb/mmBTU limit $2,500 per Unit Operating Day per violation, starting on the Unit Operating Day that a stack test result demonstrates a violation and continuing each Unit Operating Day thereafter until and excluding such Unit Operating Day on which a subsequent stack test demonstrates compliance with the applicable PM Emission Rate
k. Failure to comply with any applicable PM Emission Rate, where the violation is equal to or greater than 5% but less than 10% in excess of the lb/mmBTU limit $5,000 per Unit Operating Day per violation, starting on the Unit Operating Day a stack test result demonstrates a violation and continuing each Unit Operating Day thereafter until and excluding such Unit Operating Day on which a subsequent stack test demonstrates compliance with the applicable PM Emission Rate
l. Failure to comply with any appli cable PM Emission Rate, where the violation is equal to or greater than 10% in excess of the lb/mmBTU limit $10,000 per Unit Operating Day per violation, starting on the Unit Operating Day a stack test result demonstrates a violation and continuing each Un it Operating Day thereafter until and excluding such Unit Operating Day on which a subsequent stack test demonstrates compliance with the applicable PM Emission Rate
m. Failure to install, commence Continuous Operation, or $10,000 per Day per violation Continuously Operate a NO x , SO 2 , or PM control device as during the first 30 Days; required under this Consent Decree $37,500 per Day per violation thereafter

57Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 61 of 107

n. Failure to Retire, Refuel, or Repower a Unit as required under this Consent Decree $10,000 per Day per violation during the first 30 Days; $37,500 per Day per violation thereafter
o. Failure to cease burning petcoke in a Unit and instead burn 100% PRB coal or equivalent fuel $10,000 per Day per violation during the first 30 Days; $37,500 per Day per violation thereafter
o. Failure to conduct a stack test for PM as required by Paragraphs 121 to 123 of this Consent Decree $5,000 per Day per violation

p. Failure to install or operate NO x , SO 2 , and/or PM CEMS as required in this Consent Decree $1,000 per Day per violation

q. Failure to apply for any permit required by Section XVII (Permits) $1,000 per Day per violation

r. Failure to timely submit or implement, as approved, the reports, plans, studies, analyses, protocols, or other submittals required by this Consent Decree $750 per Day per violation during the first 10 Days; $1,000 per Day per violation thereafter
s. Failure to S urrender SO 2 Allowances as required under this Consent Decree $37,500 per Day. In addition, $1,000 per SO 2 All owance not Surrender ed

t. Failure to Surrender NO x Allowances as required under this Consent Decree $37,500 per Day. In addition, $1,000 per NO x Allowance not Surrender ed
u. Using, selling, banking, trading, or transferring NO x Allowances or SO 2 Allowances except as permitted under this Consent Decree At the option of the Owner(s) of the Unit at issue either the Surrender of Allowances in an amount equal to four times the number of Allowances used, sold, banked, traded, or transferred in violation of this Consent Decree, or the payment of $2,500 per ton for an amount of tons equal to four times the number of Allowances used, sold, banked, traded, or transferred in violation of this Consent Decree
v. Failure to optimize ESPs as required by Paragraph 116. $1,000 per Day per violation

58Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 62 of 107

w. Failure to undertake and complete as described in Appendix A any of the Environmental Mitigation Projects in compliance with Section IX (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

x. Any other violation of this Consent Decree $1,000 per Day per violation

163. Violations of any limit based on a 30- Day Rolling Average Emission Rate

constitutes 30 Days of violation, provided, however, that where such a violation (for the same

pollutant and from the same Unit) recurs within periods less than 30 Days, Unit Owners shall not

be obligated to pay a daily stipulated penalty for any Day of the recurrence for which a stipulated

penalty has already been paid.

164. Violations of any limit based on a 12-Month Rolling Average Emission Rate

constitutes 365 Days of violation, provided, however, that where such a violation (for the same

pollutant and from the same Unit) recurs within periods less than 12 months, Unit Owners shall

not be obligated to pay a daily stipulated penalty for any Day of the recurrence for which a

stipulated penalty has already been paid.

165. 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.

For examp le, emissions for one Day may be included in only one 30-Day Rolling Average

calculation. Nothing in this Consent Decree shall prevent the simultaneous accrual of separate

stipulated penalties for separate violations of this Consent Decree. The stipulate d penalties

provided for in this section are cumulative and shall not be increased due to a Unit having more

than one Owner.

59Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 63 of 107

166. For purposes of the stipulated penalty for failure to make any Allowance

Surrender required pursuant to Subparagraphs 162.s to 162.u, a Unit Owner shall make the

Surrender of any Allowances required by such Subparagraph by June 30 of the immediately

following calendar year.

167. All stipulated penalties shall be paid to the United States within 30 Days of

receipt of written demand to the applicable Defendant(s) from the United States, and the

applicable Defendant(s) shall continue to make such payments every 30 Days thereafter until the

violation(s) no longer continues, unless such Defendant(s) elect within 20 Days of receipt of

written de mand to such Defendant(s) from the United States to dispute the imposition or accrual

of stipulated penalties in accordance with the provisions in Section XVI (Dispute Resolution) of

this Consent Decree.

168. Stipulated penalties shall continue to accrue as pro vided in accordance with

Paragraph 165 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 the United States

pursuant to Section XVI (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 30 Days of the

effective date of the agreement or of the receipt of the United States’ decision;

b. If the dispute is appealed to the Court and the United States prevails in whole or

in part, the applicable Defendant(s) shall, within 30 Days of receipt of the Court’s

60Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 64 of 107

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;

c. If the Court’s decision is appealed by either Party, the applicable Defendant(s)

shall, within 15 Days of receipt of the final appellate court decision, pay all

accrued stipulated penalties determined to be owed, together with interest accrued

on such stipulated penalties determined to be owed by the appellate court.

Notwithstanding any other provision of this Consent Decree, the accrued stipulated penalties

agreed to by the United States and the applicable Defendants, or d etermined by the United States

through Dispute Resolution to be owed, may be less than the stipulated penalty amounts set forth

in Paragraph 162.

169. All monetary stipulated penalties shall be paid in the manner set forth in Section

X (Civil Penalty) of this Consent Decree and all Allowance Surrender stipulated penalties shall

comply with the Allowance Surrender procedures of Paragraphs 96 to 97 and 111 to 112. The

obligations of Defendants to pay stipulated penalties under subparagraph 162.a are joint and

several. The remaining obligations to pay stipulated penalties, including with respect to

subparagraph 162.p, are joint and several as to the Unit Owners with an Ownership Interest in

the Unit at issue, and individual as to the Defendant responsible for each Environmental

Mitigation Project at issue.

170. Should one or more 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 from such Defendant(s), as provided for in 28 U.S.C. § 1961.

61Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 65 of 107

171. The stipulated penalties provided for in this Consent Decree shall be in addition to

any other rights, re medies, or sanctions available to the United States and/or Sierra Club 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.

172. Affirmative Defense as to Stipulated Penalties for Excess Emissions Occurring

During Malfunctions . If any of the Units in the System exceed an applicable 30

- Day Rolling

Average Emission Rate set forth in this Consent Decree, due to Malfunction, the Unit Owner(s)

operating or owning such Units, bearing the burden of proof by a preponderance of the evidence,

have an affirmative defense to a claim for stipulated penalties under this Consent Decree, if such

Unit Owners have complied with the reporting requirements of Paragraphs 177 and 178 and

demonstrate all of the following:

a. the excess em issions were caused by a sudden, unavoidable breakdown of

technology, beyond the control of the Unit Operator;

b. the excess emissions (1) did not stem from any activity or event that could have

been foreseen and avoided, or planned for, and (2) could not have been avoided

by better operation and maintenance practices in accordance with manufacturers’

specifications and good engineering and maintenance practices;

c. to the maximum extent practicable, the air pollution control equipment and

processes were maintained and operated in a manner consistent with good

62Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 66 of 107

practice for minimizing emissions in accordance with manufacturers’

specifications and good engineering and maintenance practices;

d. repairs were made in an expeditious fashion when Unit Owners knew or should

have known that an applicable 30- Day Rolling Average Emission Rate was being

or would be exceeded. Off-shift labor and overtime must have been utilized, to

the extent practicable, to ensure that such repairs were made as expeditiously as

practicable;

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

minimized to the maximum extent practicable during periods of such emissions in

accordance with manufacturers’ specifications and good engineering and

maintenance prac tices;

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

ambient air quality;

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

accordance with manufacturers’ specifications and good engineering and

maintenance practices;

h. Unit Operator’s actions in response to the excess emissions were documented by

properly signed or otherwise validated, contemporaneous operating logs, or other

relevant evidence;

i. the excess emissions were not part of a recurring pattern indicative of inadequate

design, operation, or maintenance; and

63Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 67 of 107

j. Unit Owners properly and promptly notified EPA and Sierra Club as required by

this Consent Decree.

173. To assert an affirmative defense for Malfunction under Parag raph 172, the

applicable Unit Owners shall submit all data demonstrating the actual emissions for the Day the

Malfunction occurs and the 29-Unit Operating Day period following the Day the Malfunction

occurs. Unit Owners may, if they elect, submit emissions data for the same 30

- Unit Operating

Day period but that excludes the excess emissions.

174. Affirmative Defense as to Stipulated Penalties for Excess Emissions Occurring

During Startup and Shutdown . If any of the Units in the System exceed an applicable 30

- Da y

Rolling Average Emission Rate set forth in this Consent Decree, due to startup or shutdown, the

Unit Owners with an Ownership Interest in such Units, bearing the burden of proof by a

preponderance of the evidence, have an affirmative defense to a claim f or stipulated penalties

under this Consent Decree, if the Unit Owners have complied with the reporting requirements of

Paragraphs 177 and 178 and demonstrate all of the following:

a. the periods of excess emissions that occurred during startup and shutdow n were

short and infrequent and could not have been prevented through careful planning

and design in accordance with manufacturers’ specifications and good

engineering and maintenance practices;

b. the excess emissions were not part of a recurring pattern indicative of inadequate

design, operation, or maintenance or which could have been prevented by

following manufacturers’ specifications and recommendations and good

engineering and maintenance practices;

64Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 68 of 107

c. if the excess emissions were caused by a bypas s (an intentional diversion of

control equipment), then the bypass was unavoidable to prevent loss of life,

personal injury, or severe property damage;

d. at all times, the facility was operated in a manner consistent with good

engineering and maintenance practices and manufacturers’ specifications and

recommendations for minimizing emissions;

e. the frequency and duration of operation in startup or shutdown mode was

minimized to the maximum extent practicable in accordance with manufacturers’

specificati ons and good engineering and maintenance practices;

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

ambient air quality in accordance with manufacturers’ specifications and good

engineering and maintenance practices;

g. All emissions monitoring systems were kept in operation if at all possible in

accordance with manufacturers’ specifications and good engineering and

maintenance practices;

h. The Unit Operator’s actions during the period of excess emissions were

documented by properly signed or otherwise validated, contemporaneous

operating logs or other relevant evidence; and

i. The applicable Unit Owners properly and promptly notified EPA as required by

this Consent Decree.

175. To assert an affirmative defense for startup or shutdown under Paragraph 174, the

applicable Unit Owners shall submit all data demonstrating the actual emissions for the Day the

65Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 69 of 107

excess emissions from startup or shutdown occurs and the 29-Unit Operating Day period

following the Day the excess emissio ns from startup or shutdown occurs. Unit Owners may, if

they elect, submit emissions data for the same 30 -Unit Operating Day period but that excludes

the excess emissions.

176. If excess emissions occur due to a Malfunction during routine startup and

shutdown, then those instances shall be treated as other Malfunctions subject to Paragraphs 172

and 173.

177. For an affirmative defense under Paragraphs 1 72 and 174, applicable Unit

Owners, bearing the burden of proof by a preponderance of the evidence, shall demonstrat e,

through submission of the data and information under the reporting provisions of this Section,

that all reasonable and practicable measures in accordance with good engineering and

maintenance practices and within the Unit Operator’s control were impleme nted to prevent the

occurrence of the excess emissions.

178. Defendant(s) shall provide notice to Plaintiffs in writing of Defendant’s intent to

assert an affirmative defense for Malfunction, startup, or shutdown under Paragraphs 172 and

174 in Defendants semi -annual progress reports as required by Paragraph 155(e). This notice

shall be submitted pursuant to the provisions of Section XIX (Notices). The notice shall contain:

a. The identity of each stack or other emission point where the excess emissions

occurred;

b. The magnitude of the excess emissions expressed in lb/mmBTU and the operating

data and calculations used in determining the magnitude of the excess emissions;

c. The time and duration or expected duration of the excess emissions;

66Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 70 of 107

d. The identit y of the equipment causing the excess emissions;

e. The nature and suspected cause of the excess emissions;

f. The steps taken, if the excess emissions were the result of a Malfunction, to

remedy the Malfunction and the steps taken or planned to prevent the recurrence

of the Malfunction;

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

h. If applicable, a list of the steps taken to comply with permit conditions governing

Unit operation during periods of startup, shutdown, and/or Malfunction.

179. A Malfunction, startup, or shutdown shall not constitute a Force Majeure Event

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

as provided in Section XV (Force Majeure).

180. The affirmative defe nse provided herein is only an affirmative defense to

stipulated penalties for violations of this Consent Decree, and not a defense to any civil or

administrative action for injunctive relief.

XV. FORCE MAJEURE

181. For purposes of this Consent Decree, a “Force Majeure Event” shall mean an

event that has been or will be caused by circumstances beyond the control of one or more the

Unit Owners, their contractors, or any entity controlled by a Unit Owner that delays or prevents

the performance of any obligation under this Consent Decree or otherwise causes a violation of

any provision of this Consent Decree despite the Unit Owners’ 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

67Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 71 of 107

and (b) after it has occurred, such that the delay and/or violation are minimized to the greatest

extent possible and the emissions during such event are minimized to the greatest extent

possible. Specific references to Force Majeure in other parts of this Consent Decree do not

restrict the ability of the Unit Owners to assert Force Majeure pursuant to the process described

in this Section. Without limiting the applicability of this Section to an activity of any other

Defendant, the Force Majeure provisions apply to We Energies to the extent that a claim relates

to an Environmental Mitigation Project undertaken by We Energi es.

182. Notice of Force Majeure Events . If any event occurs or has occurred that may

delay or prevent compliance with or otherwise cause a violation of any obligation under this

Consent Decree, as to which one or more Unit Owners intend to assert a claim of F orce Majeure,

then the applicable Unit Operator or Unit Owners shall notify Plaintiffs in writing as soon as

practicable, but in no event later than 14 Working Days following the date the Unit Operator or

the Unit Owners first knew, or by the exercise of d ue diligence should have known, that the

event caused or may cause such delay or violation. In this notice, the Unit Operator or the

applicable Unit Owners shall reference this Paragraph of this Consent Decree and describe the

anticipated length of time t hat the delay or violation may persist, the cause or causes of the Force

Majeure Event, all measures taken or to be taken by the Unit Operator or the Unit Owners to

prevent or minimize the delay or violation, the schedule by which the Unit Operator or Unit

Owners propose to implement those measures, and the applicable Unit Operator’s or Unit

Owners’ rationale for attributing the failure, delay , or violation to a Force Majeure Event. A

copy of this Notice shall be sent electronically, as soon as practicable , to Plaintiffs. The

applicable Unit Operator and Unit Owners shall adopt all reasonable measures to avoid or

68Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 72 of 107

minimize such failures, delays, or violations. The Unit Operator and Unit Owners shall be

deemed to know of any circumstance which they, their contractors, or any entity controlled by

them, knew or should have known.

183. Failure to Give Notice . If the applicable Unit Operator or one or more of the

applicable Unit Owners fail to comply with the notice requirements of this Section, the United

States ( after consultation with the Sierra Club) may void such Unit Owner’s claim for Force

Majeure as to the specific event for which the Unit Operator or Unit Owners have failed to

comply with such notice requirement.

184. Plaintiffs’ Response . The United States sha ll notify the applicable Unit Owners

in writing regarding Unit Owners’ claim of Force Majeure as soon as reasonably practicable. If

the United States (after consultation with Sierra Club) agrees that a delay in performance has

been or will be caused by a Force Majeure Event, the Plaintiffs and the Unit Owners 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, in which case the

delay at issue s hall be deemed not to be a violation of the affected requirement(s) of this Consent

Decree. In such circumstances, an appropriate modification shall be made pursuant to Section

XXIII (Modification) of this Consent Decree.

185. Disagreement . If the United States (after consultation with Sierra Club) does not

agree with the Unit Owners’ claim of Force Majeure, or if the United States and the Unit Owners

cannot agree on the length of the delay actually caused by the Force Majeure Event, the matter

shall be reso lved in accordance with Section XVI (Dispute Resolution) of this Consent Decree.

69Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 73 of 107

186. Burden of Proof . In any dispute regarding Force Majeure, the applicable Unit

Owner(s) of the Unit at issue shall bear the burden of proving that any delay in performance, or

any other violation of any requirement of this Consent Decree, was caused by or will be caused

by a Force Majeure Event. The applicable Unit Owners shall also bear the burden of proving

that the Unit Owners gave the notice required by this Section and the anticipated duration and

extent of any failure, delay, or violation(s) attributable to a Force Majeure Event. An extension

of one compliance date may, but will not necessarily, result in an extension of a subsequent

compliance date.

187. Events Excluded . Un anticipated or increased costs or expenses associated with

the performance of the Unit Owners’ obligations under this Consent Decree shall not constitute a

Force Majeure Event.

188. Potential Force Majeure Events . The Parties agree that, depending upon the

circumstances related to an event and the applicable Unit Owners’ response to such

circumstances, the kinds of events listed below are among those that could qualify as Force

Majeure Events within the meaning o f 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 terrorism; and orders by a government

off icial, government agency, other regulatory authority, or a regional transmission organization

(e.g., the Midwest Independent System Operator), acting under and authorized by applicable law

or tariff as accepted by the Federal Energy Regulatory Commission, that directs the Unit Owners

to supply electricity so long as such order is a response to a state- wide or regional emergency or

is necessary to preserve the reliability of the bulk power system. Depending upon the

70Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 74 of 107

circumstances and the Unit Owners’ respo nse to such circumstances, failure of a permitting

authority or the Public Service Commission of Wisconsin to issue a necessary permit or order

with sufficient time for the Unit Owners to achieve compliance with this Consent Decree may

constitute a Force M ajeure Event where the failure of the authority to act is beyond the control of

the Unit Owners and the Unit Owners have taken all steps available to them to obtain the

necessary permit or order, including, but not limited to: submitting a complete permit application

or request; responding to requests for additional information by the 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 authority.

189. Extended Schedule . As part of the resolution of any matter submitted to this

Court under Section XVI (Dispute Resolution) of this Consent Decree regarding a claim of Force

Majeure, the United States and one or more Unit Owners by agreement, or this Court by order,

may in appropriate circumstances extend or modify the schedule for completion of work and/or

obligations under this Consent Decree to account for the delay in the work and/or obligations

that occurred as a result of any delay agreed to by the United States or approved by the Court.

The applicable Unit Owners shall be liable for stipulated penalties pursuant to Section XIV

(Stipulated Penalties) for their failure thereafter to complete the work and/or obligations in

accordance with the e xtended or modified schedule (provided that the applicable Unit Owners

shall not be precluded from asserting that a further Force Majeure Event has caused or may cau se

a delay in complying with the extended or modified schedule).

71Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 75 of 107

XVI. DISPUTE RESOLUTION

190. 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 othe r Party. The

provisions of this Section XVI shall be the sole and exclusive mechanism to resolve disputes

arising under or with respect to this Consent Decree.

191. The dispute resolution procedure required herein shall be invoked by one Party

giving written n otice to the other Party, as well as all other Defendants, advising of a dispute

pursuant to this Section. The notice shall describe the nature of the dispute and shall state the

noticing Party’s position with regard to such dispute. The Party receiving such a notice shall

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

meeting to discuss the dispute informally not later than 14 Days following receipt of such notice.

192. Disputes submitted to dispute resolution und er this Section shall, in the first

instance, be the subject of informal negotiations between the Parties. Such period of informal

negotiations shall not extend beyond 30 Days from the date of the first meeting between the

Parties’ representatives unless they agree in writing to shorten or extend this period.

193. If the Parties are unable to reach agreement during the informal negotiation

period, the Plaintiff or Plaintiffs shall provide those Defendants seeking dispute resolution with a

written summary of the ir position (s) regarding the dispute. The written position provided by the

Plaintiff or Plaintiffs

, or by the United States if Plaintiffs have different position s, shall be

considered binding unless, within 45 Days thereafter, the applicable Defendants , o r Sierra Club if

Plaintiffs have different positions, seeks judicial resolution of the dispute by filing a petition with

72Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 76 of 107

this Court. Any Party opposing such petition may submit a response to the petition within 45

Days of filing.

194. 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.

195. This Court shall not draw any inferences nor establish any presumptions adverse

to either Party as a result of invocation of this Section or the Parties’ inability to reach

agreement.

196. As part of the resolution of any dispute under this Section, in appropriate

circumstances the Parties may agree, or thi s 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. The applicable Defendants shall be

liable for stipulated penalties pursuant to Section XIV (Stipulated Penalties) for their failure

thereafter to complete the work in accordance with the extended or modified schedule, provided

that such Defendants shall not be precluded from asserting that a Force Ma jeure Event has

caused or may cause a delay in complying with the extended or modified schedule.

197. The Court shall decide all disputes pursuant to applicable principles of law for

resolving such disputes. In their filings with the Court under Paragraph 193, the Parties shall

state their respective positions as to the applicable standard of law for resolving the particular

dispute.

73Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 77 of 107

XVII. PERMITS

198. Unless expressly stated otherwise in this Consent Decree, in any instance where

otherwise applicable law or this Consent Decree requires one or more of the Unit Owners or the

Unit Operator to secure a permit to authorize construction or operation of any device, including

all preconstruction, construction, and operating permits required under State law, the Unit

Oper ator or, where appropriate, the Unit Owners shall ensure that such application is made in a

timely manner. Recognizing that the Wisconsin Department of Natural Resources is the SIP

approved permitting authority, EPA will use best efforts to review expeditiously, to the extent

applicable, all permit applications submitted by Unit Owners to meet the requirements of this

Consent Decree. Sierra Club agrees not to submit any agency comments in a public forum, file a

legal challenge, take a litigation position, file a request for a contested case hearing, a request for

state circuit court review, or a petition pursuant to 42 U.S.C. § 7661d(b), regarding, criticizing

and/or challenging the issuance of any permits or other regulatory approvals necessary for the

construction or operation of any environmental control equipment or Environmental M itigation

Project(s) required by this Consent Decree, except as provided in the Dispute Resolution

provisions in Section XVI of this Consent Decree. Any disputes regarding S ierra Club’s

compliance with this provision is subject to the Dispute Resolution provisions in Section XVI,

including written notice and period to cure, and Unit Owners’ remedies for alleged breaches by

Sierra Club shall be limited to specific performance and shall exclude any monetary damages.

199. Notwithstanding the previous Paragraphs, nothing in this Consent Decree shall be

construed to require one or more Unit Owners or the Unit Operator to apply for, amend, or

obtain a PSD or Nonattainment NSR permit or p ermit modification for any physical change in,

74Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 78 of 107

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

resolved by Section XI (Resolution of Claims) of this Consent Decree.

200. When permits are required, the applicable Unit Owners shall complete and submit

applications for such permits to the applicable State agency to allow sufficient time for all legally

required processing and review of the permit request, including requests for additional

information by the applicable St ate agency. Any failure by Unit Owners to submit a timely

permit application for a System Unit in which they have an Ownership Interest, as required by

permitting requirements under state and/or federal regulations, shall bar any use of Section XV

(Force Majeure) of this Consent Decree where a Force Majeure claim is based on permitting

delays.

201. Notwithstanding the reference to the Title V Permits for the System Units in this

Consent Decree, the enforcement of such permits shall be in accordance with their o wn terms

and the CA A and its implementing regulations. Such Title V Permits shall not be enforceable

under this Consent Decree, although any term or limit established by or under this Consent

Decree shall be enforceable under this Consent Decree regardless of whether such term has or

will become part of a Title V Permit, subject to the terms of Section XXVII (Conditional

Termination of Enforcement Under Decree) of this Consent Decree.

202. Within 180 Days after the Date of Entry of this Consent Decree, the Uni t

Operator shall amend any applicable Title V Permit application(s), or apply for amendments of

its Title V Permits, to include a schedule for all Unit

- specific, P lant

- specific, and S ystem

- specific

performance, operational, maintenance, and control technology requirements established by this

Consent Decree including, but not limited to, any (a) 12-Month Rolling Average Emission Rate,

75Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 79 of 107

(b) 30 -Day Rolling Average Emission Rate for NO x , (c) 30

- Day Rolling Average Emission Rate

for SO 2 , (d) Plant-Wide Annual Ton nage Limitation, (e) Unit -Specific Annual Tonnage Cap, (f)

requirements pertaining to the Surrender of SO 2 and NO x Allowances, (g) requirements to cease

burning petcoke and commence burning 100% PRB coal or equivalent, (h) PM Emission Rate

and annual stack test requirements, (i) PM CEMS monitoring equipment, and (j) the Retirement,

Refueling, or Repowering of any Unit as required under this Consent Decree.

203. Within one year from the Date of Entry of this Consent Decree, with respect to

any Unit in which they have an Ownership Interest, Unit Owners shall either apply to

permanently include the requirements and limitations enumerated in this Consent Decree into a

federally enforceable permit or request a site -specific amendment to the Wisconsin SIP, such that

th e requirements and limitations enumerated in this Consent Decree become and remain

‘applicable requirements’ as that term is defined in 40 C.F.R. Part 70.2. The permit or

Wisconsin SIP amendment shall require compliance with the following: any applicable (a) 12

-
Month Rolling Average Emission Rate, (b) 30- Day Rolling Average Emission Rate for NO x , (c)

30- Day Rolling Average Emission Rate for SO 2 , (d) Plant-Wide Annual Tonnage Limitation, (e)

Unit -Specific Annual Tonnage Cap, (f) requirements pertaining to the Surrender of SO 2 and NO x
Allowances, (g) requirements to cease burning petcoke and commence burning 100% PRB coal

or equivalent, (h) PM Emission Rate and annual stack test requirements, (i) PM CEMS

monitoring equipment, and (j) Retirement requirements.

204. Unit Owners shall ensure that the Plaintiffs are provided with a copy of each

application for a federally enforceable permit or Wisconsin SIP amendment filed by them in

relation to any Unit in which they have an Ownership Interest, as well as a copy of any permit

76Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 80 of 107

proposed as a result of such application, to allow for timely participation in any public comment

opportunity.

205. Prior to conditional termination of enforcement through this Consent Decree,

Unit Owners shall ensure that enforceable provisions are obtained in their respective Title V

P ermits that incorporate all applicable Unit

- specific, P lant

- specific, and S ystem

- specific

performa nce, operational, maintenance, and control technology requirements established by this

Consent Decree including, but not limited to, any applicable (a) 12-Month Rolling Average

Emission Rate, (b) 30- Day Rolling Average Emission Rate for NO x , (c) 30

- Day Rol ling Average

Emission Rate for SO 2 , (d) Plant-Wide Annual Tonnage Limitation, (e) Unit- Specific Annual

Tonnage Cap, (f) the requirements pertaining to the Surrender of SO 2 and NO x Allowances, (g)

requirement to cease burning petcoke and commence burning 100% PRB coal or equivalent, (h)

PM Emission Rate and annual stack test requirements, (i) PM CEMS monitoring equipment, and

(j) the Retirement, Refueling, or Repowering of any Unit as required or elected under this

Decree.

XVIII. INFORMATION COLLECTION A ND RETENTION

206. Any authorized representative of the United States, including its attorneys,

contractors, and consultants, upon presentation of credentials, shall have a right of entry upon the

premises of a System Unit 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;

77Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 81 of 107

c. obtaining samples and, upon request, splits of any samples taken by Unit Owners

or their representatives, contractors, or consultants; and

d. assessing Unit Owners’ compliance with this Consent Decree.

207. Where applicable, Defendants shall retain, and instruct their contractors and

agents to preserve, a ll non -identical copies of all records and documents (including records and

documents in electronic form) now in their or their contractors’ or agents’ possession or control,

and that directly relate to Defendants’ performance of their respective obligatio ns under this

Consent Decree for the following periods: (a) until December 31, 2023, for records concerning

physical or operational changes undertaken in accordance with Section V (NO x Emission

Reductions and Controls), Section VI (SO 2 Emission Reductions and Controls), and Section VII

(PM Emission Reductions and Controls); and (b) until December 31, 2021, for all other records.

This record retention requirement shall apply regardless of any corporate document retention

policy to the contrary.

208. All informa tion and documents submitted by Defendants pursuant to this Consent

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

documents unless (a) the information and documents are subject to legal privileges or protection

or (b) Defendants claim and substantiate in accordance with 40 C.F.R. Part 2 that the information

and documents contain confidential business information.

209. Nothing in this Consent Decree shall limit the authority of EPA to conduct tests

and inspections at Unit Owners’ facilities under Section 114 of the Act, 42 U.S.C. § 7414, or any

other applicable federal laws, regulations, or permits.

78Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 82 of 107

XIX. NOTICES

210. 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 of America:

(if by mail service) 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# 90-5-2-1-09878

(if by commercial delivery service) Chief, Environmental Enforcement Section Environment and Natural Resources Division U.S. Department of Justice ENRD Mailroom, Room 2121 601 D Street, NW Washington, DC 20004 DJ# 90-5-2-1-09878

(if by mail or commercial delivery service) Chief, Civil Division United States Attorney’s Office Western District of Wisconsin 660 W. Washington Ave., Suite 303 Madison, WI 53703

and

(if by mail serv ice) Director, Air Enforcement Division Office of Enforcement and Compliance Assurance U.S. Environmental Protection Agency Mail Code 2242A 1200 Pennsylvania Avenue, NW Washington, DC 20460

79Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 83 of 107

(if by commercial delivery service) Director, Air Enforcement Division Office of Enforcement and Compliance Assurance U.S. Environmental Protection Agency Ariel Rios South Building, Room 1119 1200 Pennsylvania Avenue, NW Washington, DC 20004

and

Director, Air Division U.S. EPA Region 5 77 W. Jackson Blvd. (AE-17J) Chicago, IL 60604

As to the Sierra Club:

Director, Environmental Law Program Sierra Club 85 Second Street, 2 nd Fl. San Francisco, CA 94105

and

David C. Bender Pamela McGillivray McGillivray Westerberg & Bender LLC 211 S. Paterson St., Ste 320 Madison, WI 53703

As to Defendants :

As to Wisconsin Power and Light Company:

President, Wisconsin Power and Light Company 4902 N. Biltmore Lane Madison, WI 53718

and

General Counsel, Wisconsin Power and Light Company 4902 N. Biltmore Lane Madison, WI 53718

80Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 84 of 107

and

Vice President, Environmental Affairs, Wisconsin Power and Light Company 4902 N. Biltmore Lane Madison , WI 53718

As to We Energies :

Vice President, Environmental Wisconsin Electric Power Company 231 W. Michigan St. Milwaukee, WI 53203

and

General Counsel Wisconsin Electric Power Company 231 W. Michigan St. Milwaukee, WI 53203

As to Madison Gas and Electric Company:

President Madison Gas and Electric Co. P.O. Box 1231 Madison, WI 53701-1231

and

Vice President and General Counsel Madison Gas and Electric Co. P.O. Box 1231 Madison, WI 53701-1231

and

Director of Safety and Environmental Affairs Madison Gas and Electric Co. P.O. Box 1231 Madison, WI 53701-1231

81Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 85 of 107

As to Wisconsin Public Service Corporation:

President Wisconsin Public Service Corporation 700 N. Adams Green Bay, WI 54301

and

General Counsel Wisconsin Public Service Corporation 700 N. Adams Green Bay, WI 54301

211. All notifications, communications, or submissions made pursuant to this Section

shall be sent either by: (a) overnight mail or overnight delivery service with signature required

for delivery, or (b) certified or registered mail, return receipt requested. All notifications,

communications, and transmissions (a) sent by overnight, certified, or registered mail shall be

deemed submitted on the date they are postmarked, or (b) sent by overnight delivery service shall

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

212. Any Party may change either the notice recipient or the address for providing

notices to it by serving the other Parties with a notice setting forth such new notice recipient or

address.

XX. SALES OR TRANSFERS OF OPERATIONAL OR OWNERSHIP INTERESTS

213. If a Unit Owner proposes to sell or transfer an Operational Interest or Ownership

Interest to any entity other than another Unit Owner or to a Unit Owner’s successors or assigns

(“Third Party Purchaser”), such Unit Owner shall advise the Third Party Purchaser in writing of

the existence of this Consent Decree prior to such sale or transfer, and shall send a copy of such

written notification and a copy of any written agreement proposing the transfer of an Operation

82Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 86 of 107

or Ownership Interest to the EPA pursuant to Section XIX (Notices) of this Consent Decree at

least 60 Days before such proposed sale or transfer. Recipients of this notice shall treat it as

confidential for the 60 days if requested by the notifying Unit Owner.

214. No earlie r than 30 days after providing the notice in Paragraph 213, the Unit

Owner may file a motion with the Court to modify this Consent Decree to make the terms and

conditions of this Consent Decree applicable to the Third Party Purchaser. No sale or transfer to

a Third Party Purchaser of an Operational Interest or Ownership Interest shall take place before

the Third Party Purchaser has executed, and the Court has approved, a modification pursuant to

Section XXIII (Modification) of this Consent Decree making th e Third Party Purchaser a party to

this Consent Decree and liable for the selling Defendant’s applicable requirements of this

Consent Decree.

215. This Consent Decree shall not be construed to impede the transfer of any

Operational Interests or Ownership Inte rests between a Unit Operator or Unit Owner and any

Third Party Purchaser so long as the requirements of this Consent Decree are met. This Consent

Decree shall not be construed to prohibit a contractual allocation – as between a Unit Operator or

Unit Owne r and any Third Party Purchaser of Operational Interests or Ownership Interests – of

the burdens of compliance with this Consent Decree.

216. No sale or transfer of an Operational or Ownership Interest, whether in

compliance with the procedures of this Section or otherwise, shall relieve a Unit Owner of its

obligation to ensure that the terms of this Consent Decree are implemented, unless (1) the

transferee agrees to undertake all of the obligations required by this Consent Decree that may be

applicable to the t ransferred or purchased Operational or Ownership Interests, and to be

83Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 87 of 107

substituted for the Unit Owner as a Party under the Decree pursuant to Section XXIII

(Modification) and thus be bound by the terms thereof, and (2) the United States consents to

relieve the Unit Owner of its obligations. The United States may refuse to approve the

substitution of the transferee for the Unit Owner if it determines that the proposed transferee

does not possess the requisite technical abilities or financial means to comply with the Consent

Decree. Notwithstanding the foregoing, however, Defendants may not assign, and may not be

released from, any obligation under this Consent Decree that is not specific to the purchased or

transferred Operational Interest or Ownership Inter ests, including the obligations set forth in

Sections IX (Environmental Mitigation Projects) and X (Civil Penalty).

217. Plaintiffs expressly acknowledge that a Unit Owner may sell or transfer an

Operational Interest or Ownership Interest to another existin g Unit Owner, or a Unit Owner’s

successors or assigns, at any time and without Plaintiffs’ pre-approval and without any obligation

to comply with the requirements of this Section. The selling or transferring Unit Owner shall

promptly (but not later than 30 D ays after such sale or transfer) notify in writing the Plaintiffs

and other Unit Owners. Upon the consummation of the sale or transfer, all applicable

requirements of this Consent Decree related to the applicable Unit or Units that are being sold or

tr ansferred shall apply to the new Unit Owner and all such applicable requirements shall

terminate and no longer be applicable to the selling or transferring Unit Owner, with the

exception of the obligations set forth in Sections IX (Environmental Mitigation Projects) and X

(Civil Penalty).

218. Paragraphs 213 to 214 of this Consent Decree do not apply if an Ownership

Interest is sold or transferred solely as collateral security in order to consummate a financing

84Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 88 of 107

arrangement (not including a sale-leaseback), so lo ng as the transferring Unit Owner: (a) remains

the O wner or O perator (as those terms are used and interpreted under the Clean Air Act) of the

subject Unit(s); (b) remains subject to and liable for all obligations and liabilities of this Consent

Decree; and (c) supplies Plaintiffs with the following certification within 30 Days of the sale or

transfer:

“Certification of Change in Ownership Interest Solely for Purpose of Consummating Financing . We, the Chief Executive Officer and General Counsel of [insert n ame of Unit Owner], hereby jointly certify under Title 18 U.S.C. Section 1001, on our own behalf and on behalf of [insert name of Unit Owner], that any change in [insert name of Unit Owner]’s Ownership Interest in any Unit that is caused by the sale or tra nsfer as collateral security of such Ownership Interest in such Unit(s) pursuant to the financing agreement consummated on [insert applicable date] between [insert name of Unit Owner] and [insert applicable entity]: a) is made solely for the purpose of pro viding collateral security in order to consummate a financing arrangement; b) does not impair [insert name of Unit Owner]’s ability, legally or otherwise, to comply timely with all terms and provisions of the Consent Decree entered in United States v. Wisconsin Power and Light Company, et al., Civil Action 13- cv -266 ; c) does not affect [insert name of Unit Owner]’s ownership or operational control of any Unit covered by that Consent Decree in a manner that is inconsistent with [insert name of Unit Owner]’s performance of its obligations under the Consent Decree; and d) in no way affects the status of [insert name of Unit Owner]’s obligations or liabilities under that Consent Decree.”

XXI. EFFECTIVE DATE

219. The effective date of this Consent Decree shall be the Date of Entry.

XXII. RETENTION OF JURISDICTION

220. The Court shall retain jurisdiction of this case after entry of this Consent Decree

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

action necessary or appropriate for the interpretation, construction, execution, or modification of

the Consent Decree, or for 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.

85Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 89 of 107

XXIII. MODIFICATION

221. The terms of this Consent Decree may be modified only by a subsequent written

agreement signed by Plaintiffs and the applicable Defendants. Where the modification

constitutes a material change to any term of this Consent Decree, it shall be e ffective only upon

approval by the Court. This section shall not apply to any Defendant for which this Consent

Decree has been terminated.

XXIV. GENERAL PROVISIONS

222. When this Consent Decree specifies that a Unit Owner or Unit Owners shall

achieve and maintain a 30

- Day Rolling Average Emission Rate, the Parties expressly recognize

that compliance with such 30- Day Rolling Average Emission Rate shall commence immediately

upon the date specified and that compliance as of such specified date (e.g., December 30) shall

be determined based on data from that date and the 29 prior Unit Operating Days.

223. When this Consent Decree specifies that a Unit Owner or Unit Owners shall

achieve and maintain a 12 -Month Rolling Average Emission Rate, then the Month containing

t hat Day if that Day is the first Day of the Month, or if that Day is not the first Day of the Month

then the next complete Month, shall be the first Month used in the calculation of the specified

12- Month limitation. For example, if the specified 12 -Month Rolling Average Emission Rate is

to be achieved starting January 1, 2013, then January 2013 is the first Month used in the

calculation of the first applicable 12 -Month Rolling Average Emission Rate, such that the first

complete 12 -Month Rolling Average Emission Rate period would, provided that the Unit fires

Fossil Fuel in each month, include January 2013 through December 2013.

86Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 90 of 107

224. This Consent Decree is not a permit. Compliance with the terms of this Consent

Decree does not guarantee compliance with all applicable federal, state, or local laws or

regulations. The emission rates set forth herein do not relieve Unit Owners from any obligation

to comply with other state and federal requirements under the CAA, including Unit Owners’

obligation to satisfy any State modeling requirements set forth in the Wisconsin SIP.

225. This Consent Decree does not apply to any claim(s) of alleged criminal liability.

226. In any subsequent administrative or judicial action initiated by the United States

or Sierra Club for injunctive r elief or civil penalties relating to the Columbia Station, Edgewater

Station, or Nelson Dewey Station, as covered by this Consent Decree, Unit Owners 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 the United States or Sierra Club in the subsequent

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

that nothing in this Paragraph is intended to affect the validity of Section XI (Resolution of

Claims) or in any way compromise or diminish the waivers, releases , and covenants provided by

Plaintiffs in Section XI (Resolution of Claims).

227. Nothing in this Consent Decree shall relieve Unit Owners from their obligations

to comply with all applicable federal, state, and local laws and regulations, including laws,

regulations, and compliance deadlines that become applicable after the D ate of Entry of the

Consent Decree. Such laws and regulations include, but are not limited to, the Utility MACT,

the Utility NSPS requirements, and the obligation to apply for a Clean Water Act NPDES

permit(s) for the discharge of wastewater, and in connection with any such application or

87Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 91 of 107

application for permit renewal, to provide the NPDES permitting authority with all information

necessary to appropriately characterize effluent from their operations and develop appropriate

effluent limitations, including but not limited to all information necessary for the NPDES

permitting authority to appropriately evaluate discharges of total dissolved solids (“TDS”) for

their operations. Nothing in this Consent Decree should be construed to provide any relief from

the emission limits or deadlines specified in such regulations, including, but not limited to,

deadlines for the installation of pollution controls required by any such regulations, nor shall this

Decree be construed as a pre -determination of eligibility for the one ye ar extension that may be

provided under 42 U.S.C. § 7412(i)(3)(B).

228. Subject to the provisions in Section XI (Resolution of Claims), Section XVI

(Dispute Resolution), and XIV (Stipulated Penalties) nothing contained in this Consent Decree

shall be cons trued 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. However, in

addition to the provisions of Paragraph 151 (d)

, Sierra Club agre es not to file a legal challenge,

take a litigation position, file a request for a contested case hearing, a request for state circuit

court review, or a petition pursuant to 42 U.S.C. § 7661d(b), challenging the issuance of any

permits or other regulatory approvals that are necessary for the construction or operation of

environmental control equipment, or for any Environmental Mitigation Project identified in

Appendix A, which is required by this Consent Decree. Nothing in this Paragraph prevents

Sierra C lub from making use of the Dispute Resolution provisions in section XVI of this Consent

Decree. Any disputes regarding Sierra Club's compliance with this provision is subject to the

Dispute Resolution provisions in Section XVI, including written notice and period to cure, and

88Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 92 of 107

Unit Owners' remedies for alleged breaches by Sierra Club shall be limited to specific

performance and shall exclude any monetary damages.

229. Each limit and/or other requirement established by or under this Consent Decree

is a separate, independent requirement.

230. 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. Unit Owners 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 li mit is expressed to three or two significant digits. For example, if an actual

Emission 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. Unit Owners shall report data to

the number of significant digits in which the standard or limit is expressed.

231. This Consent Decree does not limit, enlarge, or affect the rights of any Party to

this Consent Decree as against any third parties.

232. 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 supersed es 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, n or shall they be used

in construing the terms of this Consent Decree.

89Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 93 of 107

233. Except as provided below, each Party to this action shall bear its own costs and

attorneys’ fees. Defendants shall pay Sierra Club’s reasonable attorneys’ fees and costs,

pursuant to 42 U.S.C. § 7604(d), for the time and expenses incurred in this case, in Sierra Club v.

Wisconsin Power and Light Company , United States District Court, Western District of

Wisconsin, Case No. 3:10- cv -511-wmc, and in Sierra Club v. Wisconsin Power and Light

Company , United States District Court, Eastern District of Wisconsin, Case No. 2:10

- cv -00835-

aeg. The deadline for Sierra Club to file a motion for costs of litigation (including attorneys’

fees) for activities prior to entry of this Consent Decree by the Court is hereby extended until 30

Days after this Consent Decree is entered by the Court. Prior to and/or during this 30-D ay

period, Sierra Club and Defendants shall seek to resolve informally any claim for costs of

litigation (including attorneys’ fees) , and, if they cannot, will submit that issue to the Court for

resolution. An award of fees for activities prior to entry of this Consent Decree by the Court

under this Paragraph does not waive Sierra Club’s ability to seek recovery for costs of litigation

(including attorneys' fees) incurred to monitor and/or enforce the provisions of this Consent

Decree.

234. As a former owner of Edgewater Unit 5, We Energies is subject to the

requirements of Section IX (Environmental Mitigation Projects) and Section X (Civi l Penalty).

The requirements of Sections XII (Periodic Reporting), XIII (Review and Approval of

Submittals), XIV (Stipulated Penalties), XV (Force Majeure), XVI (Dispute Resolution) and

XVIII (Information Collection and Retention) only apply to We Energie s to the extent that they

relate to We Energies’ obligations as set forth in Sections IX and X.

90Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 94 of 107

XXV. SIGNATORIES AND SERVICE

235. Each undersigned representative of Defendants and Sierra Club, and the Assistant

Attorney General for the Environment and Natural Resources Division of the Department of

Justice, 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.

236. This Consent Decree may be signed in counterparts, and such counterpart

signature pages shall be given full force and effect.

237. 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.

238. Unless otherwise ordered by the Court, the United States agrees that none of the

Defendants will be required to file any answer or other pleading responsive to the United States’

concurrently filed Complaint in this matter until and unless the Court expressly declines to enter

this Consent Decree, in which case each Defendant shall have no less than 30 D ays after

receiving notice of such express declination to file an answer or other pleading in response to the

Complaint.

XXVI. PUBLIC COMMENT/AGENCY REVIEW

239. The Parties agree and acknowledge that final approval by the United States and

entry of this Consent Decree is subject to the procedures of 28 C.F.R. § 50.7, which provides for

notice of the lodging of this Consent Decree in the Federal Register, an opportunity for public

comment, and the right of the United States to withdraw or withhold consent if the comments

91Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 95 of 107

disclose facts or considerations which indicate that this Consent Decree is inappropriate,

improper, or inadequate. Neither the Sierra Club nor Defendants shall oppose entry of this

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

United States has notified the Sierra Club and Defendants, in writing, that the United States no

longer supports entry of this Consent Decree. Additionally, the Parties agree and ackn owledge

that final approval of this Consent Decree by the Court is subject to 42 U.S.C. § 7604(c)(3),

which provides that a consent judgment in a citizen suit action must provide for review and

comment by the Attorney General and the U.S. EPA Administrator for 45 D ays.

XXVII. CONDITIONAL TERMINATION OF ENFORCEMENT UNDER CONSENT DECREE

240. Termination as to Completed Tasks . As soon as any individual Defendant

completes a construction project, retirement 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.

241. Termination as to We Energies . Following the successful completion of its

obligations under Sections IX (Environmental Mitigation Projects) and X (Civil Penalty),

including all associated reporting obl igations, We Energies may so certify these facts to the

Plaintiffs, all other Defendants and this Court, and We Energies may move the Court for

termination of the provisions of this Consent Decree as to We Energies. If the Plaintiffs do not

object in writ ing with specific reasons within 45 D ays of receipt of We Energies’ certification,

then We Energies shall be terminated from the requirements of this Consent Decree.

242. Conditional Termination of Enforcement Through this Consent Decree . Subject

to the provisions of Paragraph 243, after all projects, tasks, or requirements of this Consent

92Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 96 of 107

Decree have been completed as to a Unit Owner(s), a Unit Owner(s) may, by motion to this

Court, seek termination of this Consent Decree if the Unit Owner(s):

a. have succe ssfully completed construction, and have maintained operation, of all

pollution controls on Units owned or operated by them as required by this

Consent Decree for a period of two years and have successfully completed all

actions necessary to Retire, Refuel , or Repower any Unit as required by this

Consent Decree; and

b. have obtained all the final permits and/or site

- specific SIP amendments (i) as

required by Section XVII (Permits) of this Consent Decree for the applicable Unit

and (ii) that include as fede rally enforceable permit terms, all Unit -specific, and

Plant -specific, operational, maintenance, and control technology requirements

established by this Consent Decree for the applicable Unit.

Unit Owner(s) may so certify these facts to the Plaintiffs and this Court. If the Plaintiffs do not

object in writing with specific reasons within 45 Days of receipt of Unit Owner’(s) certification,

then, for any violations of this Consent Decree that occur after the filing of notice, the Plaintiffs

shall pursue enforcement of the requirements through the applicable permits and/or other

enforcement authorities and not through this Consent Decree. If Plaintiffs object, the dispute

will be resolved pursuant to the procedures in Section XVI (Dispute Resolution).

243. Enfor cement under this Consent Decree . Notwithstanding Paragraph 242 , if

enforcement of a provision in this Consent Decree cannot be pursued by the United States under

the applicable permit(s) issued pursuant to the CAA or its implementing regulations (“CAA

Pe rmit”), or if a Consent Decree requirement was intended to be part of a CAA Permit and did

93Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 97 of 107

not become or remain part of such permit, then such requirement may be enforced under the

terms of this Consent Decree at any time.

XXVIII. FINAL JUDGMENT

244. Upon approval and entry of this Consent Decree by the Court, this Consent

Decree shall constitute a final judgment between the Plaintiffs and each and all of the

Defendants.

94Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 98 of 107Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 99 of 107Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 100 of 107Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 101 of 107Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 102 of 107Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 103 of 107Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 104 of 107Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 105 of 107Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 106 of 107Case: 3:13-cv-00266 Document #: 3-1 Filed: 04/22/13 Page 107 of 107Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 1 of 32



## APPENDIX A

ENVIRONMENTAL MITIGATION PROJECTS

To fulfill each Defendant’s individual obligations to comply with the requirements in Section IX (Environmental Mitigation Projects) of the Consent Decree, Defendants shall spend no less than $8,500,000 in total Project Dollars, consistent with the requirements of this Appendix. Defendants shall spend no less than, and nothing in the Consent Decree or this Appendix shall require a Defendant to spend any more than, each Defendant’s respective amounts listed below on Environmental Mitigation Projects:

• Wisconsin Power and Light Company: $6,583,500

• Wisconsin Public Service Corporation: $1,272,167

• Madison Gas and Electric Company: $623,333

• Wisconsin Electric Power Company: $21,000

I. Schedule and Budget for Environmental Mitigation Projects Other Than Payments to the National Park Service and United States Park Service (Each Defendant)

A. Within 120 Days from the Date of Entry of this Consent Decree, as further described below, each Defendant shall submit proposed project plan(s) to EPA for review and approval pursuant to Section XIII of the Consent Decree (Review and Approval of Submittals) for completing each Defendant’s Environmental Mitigation Project expenditure commitments over a period of not more than 5 years from the date of plan approval. The Project Dollars shall be spent on Projects outlined in Sections II through V of this Appendix. Each Defendant also may elect to spend Project Dollars on Projects pursuant to Section VI of this Appendix. EPA reserves the right to disapprove any of the proposed plans should the Agency determine, based on an analysis of the plans submitted by a Defendant and all the potential environmental impacts, that the project is not consistent with the requirements of thi s Consent Decree

. If a Defendant opts not to or is unable to perform one of the Projects detailed in Sections II through IV of this Appendix, Defendant shall not have any obligation for such Project pursuant to this Consent Decree, including performance, reporting, or closure requirements for that Project, provided that the Defendant is otherwise in compliance with the Environmental Mitigation Project requirements of this Consent Decree, which may include performing one or more Projects approved by EPA pursuant to Section VI of this Appendix or Paragraph 135 of the Consent Decree. If a Defendant subsequently opts not to perform a Project for which it has submitted a plan that has been approved by EPA, then it shall indicate withdrawal from theCase: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 2 of 32

Project in i ts next periodic report pursuant to Paragraph 155 of the Consent Decree

. Defendants that commit to make specific payments to the National Park Service or United States Forest Service in this Appendix A are not required to submit a project plan for those payments

.

B. Each Defendant may, at its election, consolidate the Project plans for which it is responsible under this Consent Decree into a single plan. Where expressly authorized in the Project descriptions in Sections II – V, upon approval of EPA of its project plan, each Defendant may complete, in whole or in part, the Project through a third-party non-profit organization or through a foundation to which that Defendant would provide the funds required for the implementation or funding of the Project(s).

C. The Parties agree that each Defendant is entitled to spread its payments for Environmental Mitigation Projects over the 5 -year period commencing upon the date of plan approval

. Each Defendant is not, however, precluded from accelerating payments to better effectuate a proposed mitigation plan, provided that the Defendant shall not be entitled to any reduction in the nominal amount of the required payments by virtue of the early expenditures.

D. All proposed project plans shall include the following:

1. A plan for implementing the project;

2. A summary level budget for the project;

3. A time line for implementation of the project;

4. A description of the anticipated environmental benefits of the project, including an estimate of any emission reductions or emission mitigation ( e.g. , SO 2 , NO x , PM, CO 2 ) expected to be realized, and the methodology and any calculations used in the derivation of such expected benefits, reductions, or mitigation; and

5. For each Project undertaken, a certification, as part of each plan submitted to EPA for the Project, that prior to the Date of L odging of this Consent Decree, Defendant had not otherwise committed to perform the Pr oject generally described in the plan, that Defendant is unaware of any other person who is committed to perform the same Project, and that Defendant will not use any portion of the Project to satisfy any obligations that it may have under other applicable requirements of law, including but not limited to any applicable renewable or energy efficiency portfolio standards.

E. As qualified by Section I.A. of this Appendix, upon EPA approval of the Project plan(s) required by this Appendix , each Defendant shall c omplete the

2Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 3 of 32

approved Projects according to the approved plan(s). Nothing in this Consent Decree shall be interpreted to prohibit any Defendant from completing the Projects ahead of schedule

.

F. Commencing with the first periodic report due pursuant to Section XII (Periodic Reporting) of the Consent Decree, and continuing biannually thereafter until completion of the Project(s), each Defendant shall include in the periodic report information describing the progress of the Project and the Project Dollars exp ended on the Project.

G. In accordance with the requirements of Paragraph 143 of the Consent Decree, within 90 Days following the completion of each Project, the Defendant responsible for that Project shall submit to EPA for approval of Project closure, a Project completion report that documents:

1. The date the Project was completed;

2. The results and documentation of implementation of the Project, including an estimate of any emission reductions or emission mitigation ( e.g. , SO 2 , NO x , PM, CO 2 ) expected to be realized, and the methodology and any calculations used in the derivation of such expected benefits, reductions, or mitigation;

3. The Project Dollars incurred by the Defendant in implementing the Project; and

4. Certification by an authorize d representative in accordance with Paragraph 158 of the Consent Decree that the Project has been completed in full satisfaction of the requirements of the Consent Decree and this Appendix

.

H. If EPA (after consultation with the Sierra Club) concludes based on the Project completion report or subsequent information provided by a Defendant that a Project has been performed and completed in accordance with the Consent Decree, then EPA will approve completion of the Project for purposes of the Consent Decree.

II. WPL’s Potential Environmental Mitigation Projects

A. National Park Service and United States Forest Service Land and Ecological Restoration ($500,000 total)

1. National Park Service Mitigation : Within 45 Days from the Date of Entry of this Consent Decree or 10 Working Days from the receipt of payment instructions from the National Park Service, whichever is later, WPL shall pay $250,000 to the National Park Service in

3Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 4 of 32

accordance with 16 U.S.C. § 19jj, for the restoration of land, watersheds, vegetation, and forests using techniques designed to improve ecosystem health and mitigate harmful effects from air pollution. The P roject(s) shall focus on one or more areas alleged by Plaintiffs to have been injured by emissions from a Plant covered by the Consent Decree, including but not limited to, Indiana Dunes National Lakeshore, Sleeping Bear Dunes National Lakeshore, Mississippi National River and Recreation Area, Saint Croix National Scenic Waterway, Herbert Hoover National Historic Park, and Effigy Mounds National Monument.

2. Payment of the amount required by Section II.A.1 of this Appendix shall be made to the Natural Resources Damage and Assessment Fund managed by the United States Department of the Interior . Instructions for transferring funds will be provided to WPL by the National Park Service . Upon payment of the required funds into the Natural Resource Damage and Assessment Fund, WPL shall have no further responsibilities regarding the implementation of any P roject selected by the National Park Service in connection with this provision.

3. United States Forest Service Mitigation : Within 45 Days from the Date of Entry of this Consent Decree or 10 Working Days from the receipt of payment instructions from the United States Forest Service, whichever is lat er, WPL shall pay $250,000 to the United States Forest Service in accordance with 16 U.S.C. § 579c, for the improvement, protection, or rehabilitation of lands under the administration of the United States Forest Service

. The Project(s) shall focus on on e or more areas alleged by Plaintiffs to have been injured by emissions from a Plant in the System, including but not limited to, the Chequamegon- Nicolet National Forest and the Manistee National Forest

.

4. Payment of the amount required by Section II.A.3 of this Appendix shall be made to the Forest Service pursuant to payment instructions provided to WPL. Upon payment of the required funds, WPL shall have no further responsibilities regarding the implementation of any P roject selected by the Forest Service in connection with this provision.

B. Land Acquisition and Restoration Projects (Up to $1,000,000)

1. Consistent with the requirements of Section I of this Appendix, WPL may submit a plan to EPA for review and approval for the use of up to $1,000,000 in Project Dollars for acquisition and restoration of ecologically significant lands, watersheds, vegetation, and/or forests that are part of, adjacent to, or near WPL ’s service territories (“Land

4Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 5 of 32

Acquisition and Restoration Project”). The Project Doll ars for this Project are in addition to the funding described in Section II.A. of this Appendix (Forest Service/Park Service Mitigation)

.

2. The goal of the Land Acquisition and Restoration Project is the protection through acquisition and/or restoration o f ecologically significant lands, watersheds, vegetation, and/or forests using adaptive management techniques designed to improve ecosystem health and mitigate harmful effects from air pollution . In addition, the funding shall be used to provide for publi c use of acquired areas in a manner consistent with the ecology of the area

.

3. For purposes of this Appendix and Section IX of this Consent Decree (Environmental Mitigation Projects), land acquisition means purchase (on behalf of the Defendant or a third-party) of interests in land, including fee ownership, easements, or other restrictions that run with the land that provide for the perpetual protection of the acquired land. Restoration may include , but is not limited to, reforestation or revegetation (u sing plants native to the area) and/or removal of nonnative, invasive plant species. Any restoration action must incorporate the acquisition of an interest in the restored lands sufficient to ensure perpetual protection of the restored land.

4. In addit ion to the requirements of Section I of this Appendix, the proposed Land Acquisition and Restoration Project plan shall also satisfy the following criteria:

a. Describe generally the areas proposed to be acquired or restored, including a map clearly identif ying the location of the land relative to the Units addressed in this Consent Decree and all city, state, or federal publicly protected lands/parks in the area surrounding the proposed land to be acquired/restored.

b. Provide a justification of why the area should be considered ecologically and/or environmentally significant and warrants preservation and/or restoration.

c. Provide the projected cost of the project and a schedule for completing and funding each portion of the project.

d. Identify any person or entity(s) other than WPL that will be involved in the project, including all owners with interests in the land

. WPL shall describe all third -party roles in the action and the basis for asserting that such entity is able and suited to perform the intended role . Any proposed third-party must be legally authorized to perform the proposed action and to

5Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 6 of 32

receive Project Dollars

.

5. Upon EPA’s approval of the Land Acquisition and Restoration Project plan, WPL may transfer up to $1,000,000 of Project Dollars to one or more land acquisition funds, provided that the use of such funds by the recipient is conditioned to use for partial or full implementation of the land acquisition and restoration described in the Land Acquisition and Restoration Project plan

. If WPL elects to transfer funds as described in this Paragraph, all Project Dollars shall be transferred within 2 years of the Date of E ntry of the Consent Decree.

6. In addition to the information required to be included in the report pursuant to Section I.G of this Appendix, WPL shall include in that report any reports related to this Land Acquisition and Restoration Project that any applicable third -party fund or organization provided to WPL

.

7. All Land Acquisition and Restoration Project lands shall be acquired within 5 years of plan approval. If all Land Acquisition and Restoration Project lands are acquired earlier than 5 years after plan approval, WPL shall have no further responsibilities regarding the implementation of the Land Acquisition and Restoration Project upon EPA approval of the report described in Section I.G of this Appendix.

C. Major Solar Photovoltaic Development Project (Up to $5,000,000 total across solar Projects covered by this Section II of Appendix A, less any expenditures on hydro boost or wind boost Projects under Sections II.F . and G. of this Appendix A)

1. Consistent with the requirements of Section I of this Appendix, WPL may propose a plan to execute a long

- term power purchase agreement (“PPA”) with one or more third-party proj ect developers (the “Project Developers”) with respect to the development of a new or an expansion of an ex isting major solar photovoltaic (“PV”) installation or installations located in WPL’s service territory

.

2. WPL shall execute the PPA as quickly as practicable, but in any event, no later than 2 years after plan approval. WPL shall only be credited Project Dollars on this Project within the first 5 years of performance (as measured from the day that power is first purchased under each PPA). For purposes of calculating the Project Dollars, Defendant shall only count the increment between the wholesale price of solar generated electricity (including the cost of Renewable Resource

6Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 7 of 32

Credits (“RECs”) 1 ) that Defendant is charged under the PPA( s) with respect to any period, minus Defendant’s average market clearing price at the Midwest Independent Transmission System Operator (“MISO”) system level for such period.

3. The PPA wi ll include a term of at least 10 years for which WPL commits to purchase the power generated and, if generated, acquire associated RECs from the solar PV installations . The PPA shall allow the developer to recoup all of its investment costs within the first 5 years of performance.

4. WPL shall not use and will retire all RECs generated during the first 10 years of performance (as measured from the day that power is first purchased under each PPA) (the “Initial 10 Years”) in accordance with all applicable rules, and shall identify these RECs as retired in the Midwest Renewable Energy Tracking System (“M

- RETS”) or any other tracking system designated as acceptable by the program recognizing the REC s. WPL shall not use the RECs generated during the Initial 10 Years of the PPA (s) for compliance with any renewable portfolio standard (“RPS”) or for any other compliance purpose during or after the Initial 10 Years

.

5. The Project shall be considered completed for purposes of this Consent Decree after the Initial 10 Years . WPL may choose to continue to purchase power or otherwise continue the project(s) following the Initial 10 Years, but will no longer be bound by the terms governing Environmental Mitigation Projects identified in Section IX of the Consent Decree and this Appendix, including but not limited to limitations on the use of RECs

. RECs generated following the Initial 10 Years may be used for any purpose authorized by law, including but not limited to satisfying regul atory requirements or sales of RECs to help offset the additional costs of the PPA.

6. In addition to the requirements of Section I of this Appendix, the plan required to be submitted pursuant to this Section of this Appendix shall satisfy the following criteria:

a. Describe how the proposed project in the plan is consistent with the requirements of this Section and the Consent Decree, and how the project will result in the emission reductions projected to be reduced pursuant to this Section.

RECs refer to a program in which credits are generated from the creation of renewable power sources, such as solar or wind developments. REC s are known as Renewable Resource Credits in Wisconsin and Renewable Energy Credits in Minnesota, and may have another name in different states

.

7 1Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 8 of 32

b. Provide that WPL will enter into a long term PPA with one or more major solar PV developers by no later than 2 years after the date of plan approval

.

c. Include an anticipated schedule for issuing Requests for Proposals (“RFP”) for major solar PV developments and an

ov erall schedule for implementing this project.

d. Describe the process that WPL will use to solicit bids and select appropriate PV development(s) to participate in the project.

e. Identify the Project Developer that WPL proposes for the PPA, including any proposed third-party who would have a coordination or project management role in the project, but not including prospective developers who would respond to a RFP.

f. Provide that each major solar PV development will have at least 500 kW of capacity (direct curren t) and will be interconnected with the utility grid with appropriate metering and monitoring to track the net power output and identify the expected capacity (kW) and energy output of the major PV development(s); and

g. Provide that WPL shall report the actu al kW hours generated each year for the Initial 10 Years in each report required by Paragraph 155 of the Consent Decree.

7. In addition to the information required to be included in the report pursuant to Section I.G of this Appendix, WPL shall include in that report details of the major PV developments including the total capacity (kW) of each system, components installed, total cost, expected energy output and environmental benefits, and the actual kW hours generated for the Initial 10 Years.

D. Solar Photo voltaic Panel Installation Projects to be Owned by Third

- Parties (Up to $2,000,000, but no more than $5,000,000 total across solar Projects covered in this Section II of Appendix A)

1. Consistent with the requirements of Section I of this Appendix, WPL
may p ropose a plan to spend up to $2,000,000 Project Dollars to install conventional flat panel or thin film solar photovoltaics (“PV Project(s)”) at state, local, or Tribal government -owned buildings, schools, and/or buildings owned by nonprofit organizations at any location within WPL’s service territory

. WPL shall implement the PV

8Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 9 of 32

Project(s) as described below.

2. A PV Project shall, at a minimum, consist of: (1) the installation of solar panels at a single location with unrestricted solar access, producing at least 10 kW direct current, or, provided WPL can demonstrate in its Project plan that it has the same cost

- effectiveness of a 10 kW direct current project (e.g., kW capacity per Project Dollar expenditure), producing at least 5 kW direct current, but no t to exceed the total annual electricity baseload of the building the project serves; (2) a grid -tied inverter, appropriately sized for the capacity of the solar panels installed at the location; (3) the appropriate solar panel mounting equipment for the type of roof or project site location; (4) wiring, conduit, and associated switchgear and metering equipment required for interconnecting the solar generator to the utility grid; and (5) appropriate monitoring equipment supported by kiosk-delivered educational software ( or comparable educational method ) to enable the school students and/or staff to monitor the total and hourly energy output of the system (kW hours), environmental benefits delivered (e.g., approximate pounds of NO x , SO 2 , CO 2 avoided), hourly ambient temperature and cell temperature (C°), irradiance (W/M 2 ), as well as time sensitive voltage, power, and current metrics.

3. The PV Project shall be installed on the customer side of the meter and ownership of the system, and any environmental bene fits that result from the installation of the PV Project(s), including associated RECs, shall be conveyed to the building owner at the site (the “Project Beneficiary”).

4. Defendant shall use North American Board of Certified Energy Practitioners (“NACEP” ) to perform the design and installation of the PV Project(s) to ensure the highest quali ty installation and performance of the system

.

5. Defendant shall ensure that there is a manufacturer parts warranty (“Parts Warranty”) in place for the major subcomp onents of the PV Project(s) , which, at a minimum, covers the solar panels for 25 years and the invertors for 10 years

.

6. Defendant also shall fund one or more service contracts (“Project Service Contract(s)”) for the benefit of the Project Beneficiary that provides for operation and maintenance of the PV Project(s) for 25 years from the date of its installation. The Project Service Contract (s) shall, at a minimum, provide for annual system checkups and solar module cleaning, and for normal component replacements, including installation of new system components as needed to ensure the ongoing maintenance and performance of the PV Project(s) for no less

9Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 10 of 32

than 25 years.

7. Defendant shall fund the Project Service Contract (s) by depositing funds in an escr ow account (“Project Escrow”) that limits the use of the Project Escrow funds by the Project Beneficiary to use for purposes of maintaining the system for the life of the PV Project

.

8. Services under the Parts Warranty and the Project Service Contract sh all be performed by third -party provider(s) but be administered by the Project Beneficiary by way of payment from the Project Escrow

. Other than with respect to its funding of the escrow, WPL is not responsible for any repair and maintenance costs for the PV Project(s)

.

9. In addition to the requirements of Section I of this Appendix, the proposed PV Project(s) plan shall also satisfy the following criteria:

a. Describe how the proposed project(s) in the plan are consistent with the requirements of this Section and the Consent Decree, and how the p roject(s) will result in the emission reductions projected to be reduced pursuant to this Section.

b. Include a schedule and budget for completing each portion of the p roject(s).

c. Describe the process that Defendant will use to notify potential Project Beneficiaries that they are eligible to participate in the project(s) and solicit their participation

.

d. Describe the process and criteria Defenda nt will use to select potential Project Beneficiaries , including such factors as base electricity usage, solar access availability, and other relevant criteria

.

e. Provide detailed accounting supporting the costs and activities associated with the Project Service Contract, including the schedule and monetary installments for deposits to the Project Escrow to support the operation and maintenance activities over the life of the system and a demonstration that the Project Escrow includes appropriate restricti ons on the Service Contract Beneficiary’s use of escrow funds, in accordance with the requirements of this Section.

f. Identify any person or entity other than WPL that will be involved in the project and describe the third-party’s role in the project, the basis for asserting that such entity is able and suited to perform the intended role, and the competitive bidding

10Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 11 of 32

process used to solicit third-party interest, if applicable. Any proposed third-party must be legally authorized to perform the proposed role and to receive Project Dollars.

10. In addition to the information required by Section II.D.9 of this Appendix, WPL’s final report for the Project(s) shall also identify the government/nonprofit owned buildings where the PV Project(s) were installed, the siz e of the system(s), the components installed, the total cost(s), and expected energy output and environmental benefits.

E. Fleet Replacement Program (Up to $1,250,000)

1. Consistent with the requirements of Section I of this Appendix, WPL may propose to spend up to $1,250,000 to replace its or publicly owned gasoline and diesel powered fleet vehicles (passenger cars, light trucks, and heavy duty service vehicles) with newly manufactured Alternative Fuels Vehicles (as defined below) and/or compressed natural gas (“CNG”) vehicles

. The replacement of gasoline and diesel vehicles with such vehicles will reduce emissions of NOx, PM, VOCs, and other air pollutants. Such vehicles shall be owned by WPL or shall be publicly-owned motor vehicles.

2. Definitions:

a. “Alternative Fuels Vehicle” means a Hybrid Vehicle, Plug -in Hybrid Vehicle, Plug

- in Battery Vehicle, or Electric Vehicle.

b. “Hybrid Vehicle” means a vehicle that can generate, store, and utilize electric power to reduce the vehicle’s consumption of fossil fuel.

c. “Plug

- in Hybrid Vehicle” means a vehicle that can be charged from an external source and can generate, store, and utilize electric power to reduce the vehicle’s consumption of fossil fuel

. These vehicles typically include a larger battery pack to allow an extended range of operation without the use of the gasoline or diesel engine.

d. “Plug

- in Battery Vehicle” means a vehicle that does not utilize an internal combustion engine and instead relies entirely on battery power for propulsion.

3. With respect to cost s associated with vehicles, Defendant shall only receive credit toward Project Dollars for the incremental cost of Alternative Fuels Vehicles or CNG Vehicles, as compared to the cost of a newly manufactured, similar motor vehicle powered by

11Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 12 of 32

conventional diesel or gasoline engines.

4. In addition to the requirements of Section I of this Appendix, the plan required to be submitted pursuant to this Section of this Appendix shall satisfy the following criteria:

a. Describe how the plan is consistent with the requir ements of this Section and the Consent Decree, and how the projects will result in the emission reductions projected to be reduced pursuant to this Section.

b. Prioritize the replacement or retrofit of diesel powered vehicles to the greatest extent practical and available.

c. Identify the portions of WPL’s fleet and/or publicly-owned fleets in WPL’s service territory for participation in this project.

d. Provide that all vehicles proposed for inclusion in this program will be regular production models that meet all applicable engine standards, certifications, or verifications.

e. Describe the process and criteria WPL will use to select any fleet operators and owners to participate in the program, consistent with the requirements of this Section.

f. Describe the rationale and basis (including a discussion of cost) for selecting the make and model of the Alternative Fuel Vehicle(s), CNG Vehicle(s) chosen for this project, including information about other available vehicles and why such vehicles were not selec ted.

g. Describe the final disposition of the vehicles that are being replaced.

h. Propose a method to account for the amount of Project Dollars that will be credited for each replaced vehicle, in accordance with the requirements of this Section

.

i. Certify that the replacement program vehicles will be retained and operated for their useful life.

j. Identify any person or entity, other than WPL, that will be involved in the project, including any proposed third-party who would have a coordination or project management role, but not including vehicle manufacturers or dealers who would provide

12Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 13 of 32

vehicles.

F. Wind Boost Projects (Up to $2,000,000, but no more $2,000,000 total across wind and hydro Projects covered in this Section II of Appendix A)

1. Consistent with the requirements of Section I of this Appendix, WPL may propose a plan to spend up to $2,000,000 in Project Dollars on Projects designed to increase the renewable power production potential of existing wind farms in Wisconsin that are owned by WPL. Producing additional MW generation from renewable wind power is expected to offset coal generation . As required by Paragraph 139 of the Consent Decree, such projects shall be in addition to any other legal obligations, including WPL’s obligations under any state Renewable Portfolio Standard (“RPS”).

2. Prior to implementation of the project, WPL shall complete a study of equipment, historic production, and wind conditions to customize optimizations and maximize production from individual turbines and the wind site as a whole

. The potential improvements may include a control system upgrade, blade tip extensions, winter icing prevention, turbine pitch optimization, and turbine control software.

3. Project Dollar credit shall reflect the difference between WPL’s cos t in implementing the Project and any economic benefit resulting from the Project

. Project Dollar credit shall include those improvements necessary to increase the actual energy output of the resource and shall exclude any regular maintenance costs, Proj ect studies or feasibility analysis . Any additional RECs generated from such Projects (due to such Projects) shall not be available for sale or use toward any State RPS obligation

.

G. Hydro Boost Projects (Up to $2,000,000, but no more $2,000,000 total across wind and hydro Projects covered in this Section II of Appendix A)

1. Consistent with the requirements of Section I of this Appendix, WPL may propose a plan to spend up to $2,000,000 in Project Dollars on activities designed to increase the existing hy droelectric facility water utilization and energy output. Producing additional MW generation from renewable hydro power is expected to offset coal generation

. As required by Paragraph 139 of the Consent Decree, such Projects shall be in addition to any other legal obligations, including WPL’s obligations under any state RPS.

2. The potential improvements may include improving the water wheel design for increased energy output while maintaining the current river water flow and making control system enhan cements to maintain

13Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 14 of 32

water levels at lower flow rates while continuing electrical generation

. The intent of the Projects would be to gain electrical energy production from the renewable resource without changing the river flow characteristics . Such P roj ects shall comply with the eligibility requirements of EPA’s Green Power Partnership ( http://www.epa.gov/greenpower/documents/gpp_partnership_reqs.pdf ).

3. Project Dollar credit shall reflect the difference between WPL’s cost in implementing the Project and any economic benefit resulting from the Project

. Project Dollar credit shall include those improvements necessary to increase the actual energy output of the resource and shall exclude any regular maintenance costs, Project studies

, or feasibility

an alysis . Any additional RECs generated from such Projects (due to such Projects) shall not be available for sale or use toward any State RPS obligation

.

H. Manure Digester Projects (Up to $750,000)

1. Consistent with the requirements of Section I of this A ppendix, WPL may propose a plan for the reduction of pollutants through conversion of food and/or animal waste to biogas or electricity within one or more of WPL’s service territories . In its plan, WPL shall propose the purchase and installation of a man ure digester for electric production

. The manure digester will be owned by a public or nonprofit entity. Installation at a farm , at a school ( e.g

. a university-owned farm), government-owned facilities, or farms or facilities owned by nonprofit groups will be prioritized, but the manure digester may be installed at any farm within WPL’s service territory . WPL may spend up to $750,000 in Project Dollars on the manure digester to be expended within 5 years of the date of plan approval. Such a Project will promote solutions to the water quality issues posed by phosphorus and nutrient-containing runoff and generate a biogas that would be used to generate renewable electricity for offsite or facility use.

2. In undertaking this Projec t, WPL may partner with third

- party organizations to handle funding and selection of locations in WPL’s service territory. Locations sought shall maximize the “brown power” generation displaced and the phosphorus loading reduced in the host watershed

.

3. In addition to the requirements of Section I of this Appendix, the plan required to be submitted pursuant to this Section of this Appendix shall satisfy the following criteria:

a. Describe how the proposed project is consistent with the

14Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 15 of 32

requirements of this Section and the Consent Decree, and how the project will result in the emission reductions projected to be reduced pursuant to this Section.

b. Include a budget and schedule for completing the project on a phased schedule, and the supporting methodologies and calculations for the budget.

I. Energy Efficiency Projects (Up to $200,000)

1. Consistent with the requirements of Section I of this Appendix, WPL may propose a plan to spend Project Dollars in an amount up to $200,000 for the purchase and installation of environmentally beneficial energy efficiency technologies designed to have long

- lasting benefits and to minimize the use of electricity and/or natural gas at state, local, or Tribal government -owned buildings, schools, buildings owned by nonprofit organ izations , commercial, and/or industrial buildings within WPL’s service territory

.

2. In addition to the requirements of Section I of this Appendix, the plan required to be submitted pursuant to this Section II of this Appendix A shall satisfy the following criteria:

a. Describe how the proposed projects in the plan are consistent with the requirements of this Section and the Consent Decree, and how the projects will result in the emission reductions projected to be reduced pursuant to this Section.

b. Include a budget and schedule for completing the project on a phased schedule, and the supporting methodologies and calculations for the budget.

c. Describe how WPL shall achieve and maintain the emission reductions associated with the energy efficiency projects.

III. WPSC Potential Environmental Mitigation Projects

A. Grandfather Falls Penstock Upgrade Project (Up to $1,100,000)

1. WPSC may submit a plan to replace two 1310- foot -long, 13.5-foot and 11-foot-diameter wood stave penstocks at the Grandfather Falls hyd roelectric facility in accordance with the requirements of this Section (“Grandfather Falls Penstock Upgrade Project”). The Grandfather Falls facility has a total installed capacity of 17.240 MW and is located on the Wisconsin River, Section 31, Rock Fal ls Township, Lincoln County, Wisconsin. The Grandfather Falls facility

15Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 16 of 32

was originally constructed in 1907 and reconstructed in 1938 by WPSC to its current configuration. The Grandfather Falls Penstock Upgrade Project is designed to significantly modern ize the facility by replacing the wood stave, concrete cradle suspended construction of the current penstocks with that of steel construction founded on earthen ballast . The current penstocks, by the nature of their construction, have exhibited excessive waste of the water resource through leakage at the many seams formed by the wood staves. The leakage bypasses the two hydroelectric turbines and is returned to the river system, unused. The leakage is measured by monitoring instruments and has ranged be tween 2 ,000 to 4,000 gallons per minute, which equates to 0.6% of penstock flow or approximately 0.1 MW. The Grandfather Falls Penstock Upgrade Project is expected to increase the gross generating capacity of the facility by over 400,000 kW hours/year, without changing current river flow characteristics

, and to offset fossil fuel generation, thereby reducing emission of SO 2 , NO x , PM and other air pollutants.

2. Up to $1,100,000 in Project Dollars may be credited towards Grandfather Falls Penstock Upgrade P roject. These Project Dollars shall act as seed funding for the entire Grandfather Falls Penstock Upgrade Project , which is expected to cost significantly more. The total expected cost of the Grandfather Falls Penstock Upgrade Project is expected to be over $17,000,000 dollars, on the order of 15 to 18 times the Project Dollar amount

.

3. Project Dollar credit shall reflect the difference between WPSC ’s cost in implementing the Project and any economic benefit resulting from the Project

. Project Dolla r credit shall include those improvements necessary to increase the actual energy output of the resource and shall exclude any regular maintenance costs, Project studies

, or feasibility analysis . Any additional RECs generated from such Projects (due to

s uch Projects) shall not be available for sale or use toward any State RPS obligation . Other such work may be performed by WPSC along with the work required by the Grandfather Falls Penstock Upgrade Project, in which case WPSC shall not count its expendit ures for any other such work as Project Dollars.

4. Notwithstanding Paragraph 139 of the Consent Decree, nothing in this Consent Decree or Appendix shall prevent WPSC from using the Grandfather Falls Penstock Upgrade Project to satisfy capacity reserve or other similar requirements that it may have, including but not limited to obligations im posed by a regional transmission operator such as the Midwest Independent Transmission System Operator. Furthermore, for purposes of the last clause of Paragraph 139 of the Consent Decree only ( i.e., “Defendant will not use any Project, or

16Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 17 of 32

portion thereof, to satisfy any obligations that it may have under other applicable requirements of law, including but not limited to any applicable renewable or energy efficiency portfolio standards”), the Project shall be construed as including the equipment and/or wo rk funded by the expenditure of up to $1,100,000 in Project Dollars only.

5. Under existing Wisconsin Law (Act 141), the Grandfather Falls facility is considered a “baseline” hydro facility, which means its ability to generate RECs for RPS compliance is assumed to be fixed at the average of its 2001, 2002, and 2003 annual generation. In accordance with Act 141, if a baseline hydroelectric facility is modified to increase its generation capability, that amount of additional capacity resulting from such m odification can be certified to create RECs above the facility’s baseline . WPSC shall not seek to certify any additional capacity resulting from penstock replacement

, thereby ensuring additional RECs are not available for sale or use towards any state R PS obligation

.

B. Land Acquisition and Restoration Projects (Up to $1,100,000)

1. Consistent with the requirements of Section I of this Appendix, WPSC may submit a plan to EPA for review and approval for the use of up to $1,100,000 in Project Dollars for acquisition and restoration of ecologically significant lands, watersheds, vegetation, and/or forests that are part of, adjacent to, or near WPSC ’s service territories (“Land Acquisition and Restoration Project”).

2. The goal of the Land Acquisition and Rest oration Project is the protection through acquisition and/or restoration of ecologically significant lands, watersheds, vegetation, and/or forests using adaptive management techniques designed to improve ecosystem health and mitigate harmful effects from air pollution . In addition, the funding shall be used to provide for public use of acquired areas in a manner consistent with the ecology of the area

.

3. For purposes of this Appendix and Section IX of this Consent Decree (Environmental Mitigation Projects ), land acquisition means purchase (on behalf of the Defendant or a third-party) of interests in land, including fee ownership, easements, or other restrictions that run with the land that provide for the perpetual protection of the acquired land. Restor ation may include , but is not limited to, reforestation orrevegetation (using plants native to the area) and/or removal of nonnative, invasive plant species. Any restoration action must incorporate the acquisition of an interest in the restored lands s ufficient to ensure perpetual protection of the restored land.

17Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 18 of 32

4. In addition to the requirements of Section I of this Appendix, the proposed Land Acquisition and Restoration Project plan shall also satisfy the following criteria:

a. Describe generally the areas proposed to be acquired or restored, including a map clearly identifying the location of the land relative to the Units addressed in this Consent Decree and all city, state, or federal publicaly protected lands/parks in the area surrounding the proposed land to be acquired/restored.

b. Provide a justification of why the area should be considered ecologically and/or environmentally significant and warrants preservation and/or restoration.

c. Provide the projected cost of the project and a schedule for completing and funding each portion of the project.

d. Identify any person or entity(s) other than WPSC that will be involved in the project, including all owners with interests in the land. WPSC shall describe all third -party roles in the action and the basis for asserting that such entity is able and suite d to perform the intended role. Any proposed third- party must be legally authorized to perform the proposed action and to receive Project Dollars.

5. Upon EPA’s approval of the Land Acquisition and Restoration Project plan, WPSC may transfer up to $1,100,000 of Project Dollars to one or more land acquisition funds, provided that the use of such funds by the recipient is conditioned to use for partial or full implementation of the land acquisition and restoration described in the Land Acquisition and Rest oration Project plan. If WPSC elects to transfer funds as described in this Paragraph, all Project Dollars shall be transferred within 2 years of the Date of Entry of the Consent Decree.

6. In addition to the information required to be included in the repo rt pursuant to Section I.G of this Appendix, WPSC shall include in that report any reports related to this Land Acquisition and Restoration Project that any applicable third -party fund or organization provided to WPSC

.

7. All Land Acquisition and Restoration Project lands shall be acquired within 5 years of plan approval. If all Land Acquisition and Restoration Project lands are acquired earlier than 5 years after plan approval, WPSC shall have no further responsibilities regarding the implementation of the Land Acquisition and Restoration Project upon EPA approval of the report described in Section I.G of this Appendix.

18Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 19 of 32

C. Fleet Replacement Program (Up to $1,100,000)

1. Consistent with the requirements of Section I of this Appendix, WPSCmay propose to spend up to $1,100,000 to replace its or publiclyowned gasoline and diesel powered fleet vehicles (passenger cars, light trucks, and heavy duty service vehicles) with newly manufactured Alternative Fuels Vehicles (as defined below) and/or compressed natural ga s (“CNG”) vehicles

. The replacement of gasoline and diesel vehicles with such vehicles will reduce emissions of NO x , PM, VOCs, and other air pollutants. Such vehicles shall be owned by WPSC or shall be publicly-owned motor vehicles.

2. Definitions:

a. “Alternative Fuels Vehicle” means a Hybrid Vehicle, Plug -in Hybrid Vehicle, Plug

- in Battery Vehicle, or Electric Vehicle.

b. “Hybrid Vehicle” means a vehicle that can generate, store, and utilize electric power to reduce the vehicle’s consumption of fossil f uel.

c. “Plug

- in Hybrid Vehicle” means a vehicle that can be charged from an external source and can generate, store, and utilize electric power to reduce the vehicle’s consumption of fossil fuel

. These vehicles typically include a larger battery pack to al low an extended range of operation without the use of the gasoline or diesel engine.

d. “Plug

- in Battery Vehicle” means a vehicle that does not utilize an internal combustion engine and instead relies entirely on battery power for propulsion.

3. With respect t o costs associated with vehicles, Defendant shall only receive credit toward Project Dollars for the incremental cost of Alternative Fuels Vehicles or CNG Vehicles, as compared to the cost of a newly manufactured, similar motor vehicle powered by conventional diesel or gasoline engines.

4. In addition to the requirements of Section I of this Appendix, the plan required to be submitted pursuant to this Section of this Appendix shall satisfy the following criteria:

a. Describe how the plan is consistent with the requirements of this Section and the Consent Decree, and how the projects will result in the emission reductions projected to be reduced

19Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 20 of 32

pursuant to this Section.

b. Prioritize the replacement or retrofit of diesel powered vehicles to the greatest extent practical and available.

c. Identify the portions of WPSC ’s fleet and/or publicly owned fleets in WPSC’s service territory for participation in this project.

d. Provide that all vehicles proposed for inclusion in this program will be regular production models t hat meet all applicable engine standards, certifications, or verifications.

e. Describe the process and criteria WPSC will use to select any fleet operators and owners to participate in the program, consistent with the requirements of this Section.

f. Describe the rationale and basis (including a discussion of cost) for selecting the make and model of the Alternative Fuel Vehicle(s), CNG Vehicle(s) chosen for this project, including information about other available vehicles and why such vehicles were not selec ted.

g. Describe the final disposition of the vehicles that are being replaced.

h. Propose a method to account for the amount of Project Dollars that will be credited for each replaced vehicle, in accordance with the requirements of this Section

.

i. Certify that the replacement program vehicles will be retained and operated for their useful life.

j. Identify any person or entity, other than WPSC , that will be involved in the project, including any proposed third party who would have a coordination or project management role, but not including vehicle manufacturers or dealers who would provide vehicles.

D. Energy Efficiency Projects (Up to $200,000 )

1. Consistent wit h the requirements of Section I of this Appendix, WPSC may propose a plan to spend Project Dollars in an amount up to $200,000 for the purchase and installation of environmentally beneficial energy efficiency technologies designed to have long

- lasting benefits and to minimize the use of electricity and /or natural gas at

20Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 21 of 32

state, local, or T ribal government

- owne d buildings, schools, buildings owned by nonprofit organizations , commercial and/or industrial buildings within WPSC’s service territory

.

2. In addition to the requirements of Section I of this Appendix, the plan required to be submitted pursuant to this Section III of this Appendix A shall satisfy the following criteria:

a. Describe how the proposed projects in the plan are consistent with the requirements of this Section and the Consent Decree, and how the projects will result in the emission reductions projected to be reduced pursuant to this Section.

b. Include a budget and schedule for completing the project on a phased schedule, and the supporting methodologies and calculations for the budget.

c. Describe how WPSC shall achieve and maintain the emissi on reductions associated with the energy efficiency projects.

IV. MGE’s Potential Environmental Mitigation Projects

A. Fleet Replacement Program (Up to $250,000)

1. Consistent with the requirements of Section I of this Appendix, MGE may propose to spend up to $250,000 to replace its or publicly-owned gasoline and diesel powered fleet vehicles (passenger cars, light trucks, and heavy duty service vehicles) with newly manufactured Alternative Fuels Vehicles (as defined below) and/or compressed natural gas (“CNG”) vehicles

. The replacement of gasoline and diesel vehicles with such vehicles will reduce emissions of NO x , PM, VOCs, and other air pollutants. Such vehicles shall be owned by MGE or shall be publicly-owned motor vehicles.

2. Definitions:

a. “Alternative Fuel s Vehicle” means a Hybrid Vehicle, Plug -in Hybrid Vehicle, Plug

- in Battery Vehicle, or Electric Vehicle.

b. “Hybrid Vehicle” means a vehicle that can generate, store, and utilize electric power to reduce the vehicle’s consumption of fossil fuel.

c. “Plug -in Hybrid Vehicle” means a vehicle that can be charged from an external source and can generate, store, and utilize electric power to reduce the vehicle’s consumption of fossil

21Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 22 of 32

fuel

. These vehicles typically include a larger battery pack to allow an extended range of operation without the use of the gasoline or diesel engine.

d. “Plug

- in Battery Vehicle” means a vehicle that does not utilize an internal combustion engine and instead relies entirely on battery power for propulsion.

3. With respect to costs associa ted with vehicles, Defendant shall only receive credit toward Project Dollars for: (1) the incremental cost of Alternative Fuels Vehicles, CNG Vehicles, hybrid gasoline electric vehicles, and/or hybrid diesel electric vehicles, as compared to the cost of a newly manufactured, similar motor vehicle powered by conventional diesel or gasoline engines; and (2) costs associated with infrastructure needed to support such Project.

4. In addition to the requirements of Section I of this Appendix, the plan required to be submitted pursuant to this Section of this Appendix shall satisfy the following criteria:

a. Describe how the plan is consistent with the requirements of this Section and the Consent Decree, and how the projects will result in the emission reductions pro jected to be reduced pursuant to this Section

.

b. Prioritize the replacement or retrofit of diesel powered vehicles to the greatest extent practical and available.

c. Identify the portions of MGE ’s fleet and/or publicly owned fleets in MGE’s service territor y for participation in this project.

d. Provide that all vehicles proposed for inclusion in this program will be regular production models that meet all applicable engine standards, certifications, or verifications.

e. Describe the process and criteria MGE will use to select any fleet operators and owners to participate in the program, consistent with the requirements of this Section.

f. Describe the rationale and basis (including a discussion of cost) for selecting the make and model of the Alternative Fuel Vehicle(s), CNG Vehicle(s) chosen for this project, including information about other available vehicles and why such vehicles were not selected.

22Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 23 of 32

g. Describe the final disposition of the vehicles that are being replaced.

h. Propose a method to account for the amount of Project Dollars that will be credited for each replaced vehicle, in accordance with the requirements of this Section.

i. Certify that the replacement program vehicles will be retained and operated for their useful life.

j. Identify any person or entity, other than MGE, that will be involved in the project, including any proposed third party who would have a coordination or project management role, but not including vehicle manufacturers or dealers who would provide vehicles.

B. Source Separated Organic Waste Project (Up to $100,000)

1. Consistent with the requirements of Section I of this Appendix, MGE may spend up to $100,000 to help support a source separated organics Project within MGE’s service territory . The money sha ll be used to develop a program to separately collect organic refuse material ( e.g ., food waste, soiled paper products, diapers, and pet waste) and convert the separated organics to methane gas for electric generation or vehicle fuel.

2. In addition to the information required by Section I of this Appendix, MGE’s final report for the Project shall also identify the total cost(s) and expected energy output and environmental benefits.

C. Residential Woodstove/Fireplace Change -Out Program (Up to $250,000)

1. Consistent with the requirements of Section I of this Appendix, MGE may propose a plan to spend no less than $75,000 and up to $250,000 to sponsor a wood burning appliance ( e.g. , stoves, boilers and fireplaces) replacement and retrofit program that would be implemented by one or more third -party nonprofit organizations or a government entity (the “Woodstove/Fireplace Program”).

2. Defendant shall sponsor the implementation of the Woodstove/Fireplace Program within MGE’s service territories in Dane County and within MGE’s extended service territor ies in Columbia, Crawford, Iowa, Juneau, Monroe and Vernon Counties, but with a prioritization to funding in Dane County.

3. The air pollutant reductions shall be obtained by replacing, retrofitting,

23Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 24 of 32

or upgrading inefficient, higher polluting wood burni ng appliances, including fireplaces, with cleaner burning appliances and technologies, such as: (1) retrofitting older hydronic heaters (aka outdoor wood boilers) to meet EPA Phase II hydronic heater standards; (2) replacingolder hydronic heaters with EPA Phase II hydronic heaters, EPAcertified woodstoves, other cleaner burning, more energy efficient hearth appliances ( e.g. , wood pellet, gas or propane appliances), orEPA Energy Star qualified heating appliances; (3) replacing non EPAcertified woodstoves with EPA

- certified woodstoves or cleaner burning, more energy- efficient hearth appliances ; (4 ) replacing spent catalysts in EPA -certified woodstoves ; and (5) replacing/retrofitting wood burning fireplaces with EPA Phase 2 Qualified Retrofit devices

or cleaner burning natural gas fireplaces. To qualify for replacement, retrofitting, or upgrading, the wood burning appliance/fireplace must be in regular use in a primary residence during the home-heating season, and preference shall be given to replacement, retrofitting, or upgrading wood burning appliances/fireplaces that are a primary or significant source of residential heat.

4. MGE and the nonprofit organization(s) or government entity that will implement the Woodstove/Fireplace Program shall consult wi th EPA’s Residential Wood Smoke Reduction Team and shall implement the Woodstove/Fireplace Program consistent with the materials available on EPA’s Burn Wise website at http://www.epa.gov/burnwise.

5. MGE shall limit the use of Woodstove/Fireplace Program Do llars for third

- party administrative costs associated with implementation of the Woodstove/Fireplace Program to no greater than 10% of the Project Dollars that MGE provides to a third

- party.

6. The Woodstove/Fireplace Program shall provide incentives for the wood burning appliance and fireplace replacements, retrofits , and upgrades described above in this Section through rebates, vouchers, and/or discounts.

7. The Woodstove/Fireplace Program shall provide educational information and outreach regarding the energy efficiency, health, and safety benefits of cleaner wood burning appliances and the proper operation of appliances. The costs associated with this element of the Woodstove/Fireplace P rogram shall count towards Project Dollars and will not be considered part of the 10% administrative costs described in Section IV.C.5; however, the costs associated with this element of the Woodstove/Fireplace Program shall be marginal as compared to the total Project Dollars attributed to the Woodstove/Fireplace Program.

24Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 25 of 32

8. In addition to the requirements of Section I of this Appendix, the Woodstove/Fireplace Program plan proposed by MGE shall:

a. Describe how the plan is consistent with the requirements of this Section and the Consent Decree, and how the project will result in the emission reductions projected to be reduced pursuant to this Section.

b. Identify the governmental entity or nonprofit organization(s) that have agreed to implement the proposed Woo dstove/Fireplace Program.

c. Describe the schedule and the budgetary increments in which MGE shall provide the necessary funding to implement the proposed Woodstove/Fireplace Program.

d. Describe all of the elements of the proposed Woodstove/Fireplace Program, including measures, to ensure that it is implemented in accordance with the requirements of this Appendix, and that the Program Dollars will be used to support the actual replacement, retrofitting, and/or upgrading of wood burning appliances and fireplaces currently in regular use in a primary residence during the home- heating season.

e. If the plan proposes to provide rebates or vouchers for the full cost of replacing older hydronic heaters or non EPA- certified woodstoves for income-qualified residential homeowners, describe and estimate the number of energy efficient appliances it intends to make available, the cost per unit, and the criteria the government entity will use to determine which residential homeowners should be eligible for such full cost replacement.

f. If applicable, identify any organizations or entities with which the governmental entity or nonprofit organization(s) will partner to implement the proposed Woodstove/Fireplace Program, including wood burning appliance trade associations, national or local health organizations, facilities that will dispose of old stoves so that they cannot be resold or reused, individual woodstove/fireplace retailers, propan e dealers, housing assistance agencies, local fire departments, and local green energy organizations.

g. Describe how the program will ensure the inefficient, higher polluting wood burning stoves and fireplaces that are replaced under the proposed Woodstove/ Fireplace Program will be properly recycled or disposed.

25Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 26 of 32

h. Describe how the government entity or nonprofit organization(s) will conduct outreach within the geographic area of the proposed Woodstove/Fireplace Program.

9. Performance . Upon approval of the Woo dstove/Fireplace Program plan by EPA, MGE shall complete the Program according to the approved plan and schedule. Should MGE, despite its best efforts to fund the Woodstove/Fireplace Program at the levels required by and in compliance with this Section, be unable to spend at least $75,000 on the Program, MGE may request EPA’s approval to allocate such Program Dollars towards another of the Projects specified in this Appendix pursuant to Section VI.

D. Nitrogen Impact Mitigation in the Yahara River Watershed (Up to $100,000)

1. Consistent with the requirements of Section I of this Appendix, MGE may propose a plan for the mitigation of adverse impacts of nitrogen on the Yahara River Watershed (“Yahara River Watershed Project”)

. MGE shall spend a total not to exceed $100,000 in Project Dollars on the Yahara River Watershed Project

.

2. In addition to the requirements of Section I of this Appendix, the plan required to be submitted pursuant to this Section of this Appendix shall satisfy the following criteria:

a. Describe how the proposed plan is consistent with the requirements of this Section and the Consent Decree, and is projected to mitigate adverse impacts, pursuant to this Section

.

b. Provide that project(s) proposed under the plan shall reduce nitrogen loading in the Yahara River Watershed or otherwise mitigate the adverse effects of nitrogen in the Yahara River Watershed that maximize the expected ecological/environmental benefit(s) in relation to the cost and maximize the permanence of the expected ben efit(s). Projects that may be approved include, by way of illustration, projects to address eutrophication of the Yahara River or lakes in the watershed from nitrogen loading.

c. Describe generally the expected environmental benefit of the proposed Yahara River Watershed Project, including, to the extent practicable , any e xpected loading benefits and any co

benefits that would result from reducing nitrogen runoff such as reducing phosphorous runoff and preventing algal blooms.

26Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 27 of 32

d. Describe the expected cost of each element of the proposed Yahara River Watershed Project, including the fair market value of any interests in land to be acquired, as applicable.

e. Identify any person or entity other than MGE that will be involved in any aspect of the proposed Yaha ra River Watershed Project. MGE shall describe the third

- party’s role in the action and the basis for asserting that such entity is capable of and suited to perform the intended role. For purposes of this Section of the Appendix, third- parties shall only include nonprofits; federal, state, and local agencies; special purpose districts; or universities . Any proposed third

party must be legally authorized to perform the proposed action and to receive Project Dollars.

f. Include a budget and schedule for completing the project on a phased schedule, and the supporting methodologies and calculations for the budget.

3. Actions taken under this Section shall not be counted as a reduction for purposes of offsetting, reducing, or eliminating the pollution control required of any point source discharge National Pollution Discharge Elimination System/Wisconsin Pollution Discharge Elimination System permittee in the Yahara River Watershed. Without limitation because of listing here, the pollution reduction steps taken under this Section may not be counted as a method of phosphorus and nitrogen reduction in any point source’s alternative effluent limitation; may not be counted as a verifiable reduction in any adaptive management option; may not generate credits for use in any water quality trading program; and may not be used to comply with cropland or livestock performance standards.

E. S olar Photovoltaic Panel Installation Projects to be Owned by Third- Parties (Up to $500,000 less any expenditures on energy efficiency Projects under Section I V.F of this Appendix A)

1. Consistent with the requirements of Section I of this Appendix, MGE may propose a plan to spend up to $500,000 Project Dollars to install conventional flat panel or thin film solar photovoltaics ( “PV Project(s)”) at state, local, or Tribal government owned buildings, schools, and/or buildings owned by non-profit organizations at any location within MGE’s service territory

. MGE shall implement the PV Project(s) as described below

.

2. A PV Project shall, at a minimum, consist of: (1) the installation of solar panels at a single location with unrestricted solar access,

27Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 28 of 32

producing at least 10 kW direct current, or, provided MGE can demonstrate in its Project plan that it has the same cost

- effectiveness of a 10 kW direct current project ( e.g. , kW capacity per Project Dollar expenditure), producing at least 5 kW direct current, but not to exceed the total annual electricity baseload of the building the project serves; (2) a grid

- tied inverte r, appropriately sized for the capacity of the solar panels installed at the location; (3) the appropriate solar panel mounting equipment for the type of roof or project site location; (4) wiring, conduit, and associated switchgear and metering equipment required for interconnecting the solar generator to the utility grid; and (5) appropriate monitoring equipment supported by kiosk-delivered educational software ( or comparable educational method ) to enable the school students and/or staff to monitor the total and hourly energy output of the system (kW hours), environmental benefits delivered ( e.g. , approximate pounds of NO x , SO 2 , CO 2 avoided), hourly ambient temperature and cell temperature (C°), irradiance (W/M 2 ), as well as time sensitive voltage, power

, and current metrics

.

3. The PV Project shall be installed on the customer side of the meter and ownership of the system, and any environmental benefits that result from the installation of the PV Project(s), including associated RECs, shall be conveyed to the building owner at the site (the “Project Beneficiary”)

.

4. Defendant shall use North American Board of Certified Energy Practitioners (“NACEP”) to perform the design and installation of the PV Project(s) to ensure the highest quality installation an d performance of the system

.

5. Defendant shall ensure that there is a manufacturer parts warranty (“Parts Warranty”) in place for the major subcomponents of the PV Project(s), which, at a minimum, covers the solar panels for 25 years and the invertors fo r 10 years.

6. Defendant also shall fund one or more service contracts (“Project Service Contract(s)”) for the benefit of the Project Beneficiary that provides for operation and maintenance of the PV Project(s) for 25 years from the date of its installation

. The Project Service Contract(s) shall, at a minimum, provide for annual system checkups and solar module cleaning, and for normal component replacements, including installation of new system components as needed to ensure the ongoing maintenance and per formance of the PV Project(s) for no less than 25 years.

7. Defendant shall fund the Project Service Contract(s) by depositing funds in an escrow account (“Project Escrow”) that limits the use of

28Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 29 of 32

the Project Escrow funds by the Project Beneficiary to use f or purposes of maintaining the system for the life of the PV Project

.

8. Services under the Parts Warranty and the Project Service Contract shall be performed by third-party provider(s) but be administered by the Project Beneficiary by way of payment from the Project Escrow

. Other than with respect to its funding of the escrow, MGE is not responsible for any repair and maintenance costs for the PV Project(s)

.

9. In addition to the requirements of Section I of this Appendix, the proposed PV Project(s) pl an shall also satisfy the following criteria:

a. Describe how the proposed project(s) in the plan are consistent with the requirements of this Section and the Consent Decree, and how the project(s) will result in the emission reductions projected to be reduced pursuant to this Section.

b. Include a schedule and budget for completing each portion of the project(s).

c. Describe the process that Defendant will use to notify potential Project Beneficiaries that they are eligible to participate in the project(s) and solicit their participation.

d. Describe the process and criteria Defendant will use to select potential Proj ect Beneficiaries, including such factors as base electricity usage, solar access availability, and other relevant criteria.

e. Provide detailed accounting supporting the costs and activities associated with the Project Service Contract, including the sche dule and monetary installments for deposits to the Project Escrow to support the operation and maintenance activities over the life of the system and a demonstration that the Project Escrow includes appropriate restrictions on the Service Contract Benefici ary’s use of escrow funds, in accordance with the requirements of this Section.

f. Identify any person or entity other than MGE that will be involved in the project and describe the third-party’s role in the project, the basis for asserting that such entity is able and suited to perform the intended role, and the competitive bidding

29Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 30 of 32

process used to solicit third-party interest, if applicable. Any proposed third-party must be legally authorized to perform the proposed role and to receive Project Dollars.

10. In addition to the information required by Section IV. E.9 of this Appendix, MGE’s final report for the Project(s) shall also identify the government/nonprofit owned buildings where the PV Project(s) were installed, the size of the system(s), the components in stalled, the total cost(s), and expected energy output and environmental benefits.

F. Energy Efficiency Projects (Up to $200,000, but no more $500,000 total across solar and energy efficiency Projects covered in this Section IV of Appendix A)

1. Consistent wit h the requirements of Section I of this Appendix, MGE may propose a plan to spend Project Dollars in an amount up to $200,000 for the purchase and installation of environmentally beneficial energy efficiency technologies designed to have long

- lasting benef its and to minimize the use of electricity and/or natural gas at state, local, or Tribal government owned buildings, schools, buildings owned by nonprofit organizations , commercial and/or industrial buildings within MGE’s service territory

.

2. In addition to the requirements of Section I of this Appendix, the plan required to be submitted pursuant to this Section of this Appendix shall satisfy the following criteria:

a. Describe how the proposed projects in the plan are consistent with the requirements of this Section and the Consent Decree, and how the projects will result in the emission reductions projected to be reduced pursuant to this Section.

b. Include a budget and schedule for completing the project on a phased schedule, and the supporting methodologies and calculations for the budget.

c. Describe how MGE shall achieve and maintain the emission reductions associated with the energy efficiency projects.

V. We Energies’ Potential Environmental Mitigation Projects

A. National Park Service or United States Forest Service Land and Ecological Restoration ($21,000 )

1. National Park Service Mitigation : Within 45 Days from the Date of Entry of this Consent Decree or 10 Working Days from the receipt of

30Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 31 of 32

payment instructions f rom the National Park Service, whichever is later, We Energies sha ll pay $10,500 to the National Park Service in accordance with 16 U.S.C. § 19jj for the restoration of land, watersheds, vegetation, and forests using techniques designed to improv e ecosyste m health and mitigate harmful effects from air pollution. The project(s) shall focus on one or more areas alleged by Plaintiffs to have been injured by emissions from a Plant covered by the Consent Decree, including but not limited to, Indiana Dunes Nati onal Lakeshore, Sleeping Bear Dunes National Lakeshore, Mississippi National River and Recreation Area, Saint Croix National Scenic Waterway, Herbert Hoover National Historic Park, and Effigy Mounds National Monument.

2. Payment of the amount required by Section V.A.1 of this Appendix shall be made to the Natural Resources Damage and Assessment Fund managed by the United States Department of the Interior . Instructions for transferring funds will be provided to We Energies by the National Park Service . Upon payment of the required funds into the Natural Resource Damage and Assessment Fund, We Energies shall have no further responsibilities regarding the implementation of any project selected by the National Park Service in connection with this provision.

3. United States Forest Service Mitigation : Within 45 Days from the Date of Entry of this Consent Decree or 10 Working Days from the receipt of payment instructions from the United States Forest Service, whichever is later, We Energies shall pay $10,500 to th e United States Forest Service in accordance with 16 U.S.C. § 579c, for the improvement, protection, or rehabilitation of lands under the administration of the United States Forest Service

. The project(s) shall focus on one or more areas alleged by Plaintiffs to have been injured by emissions from a Plant covered by the Consent Decree, including but not limited to, the Chequamegon- Nicolet National Forest and the Manistee National Forest.

4. Payment of the amount required by Section V.A.3 of this Appendix shall be made to the Forest Service pursuant to payment instructions provided to We Energies

. Upon payment of the required funds, We Energies shall have no further responsibilities regarding the implementation of any project selected by the Forest Service i n connection with this provision.

VI. Unspent Project Dollars (Each Defendant)

A. If, as of 5 years from Date of Entry of this Consent Decree , there are any funds allocated for a Defendant’s individual Project Dollar obligations to

31Case: 3:13-cv-00266 Document #: 3-2 Filed: 04/22/13 Page 32 of 32

comply with the requirements in Section IX (Environmental Mitigation Projects) and this Appendix of the Consent Decree that have not been expended, and are not expected to be expended (“Unspent Project Dollars”), the Defendant may, upon approval of EPA (in consultation with Sierra Club), allocate those “Unspent Project Dollars” towards another of the Projects specified in this Appendix, whether or not such Defendant was originally designated to perform such Project. Defendant shall provide notice pursuant to Section XIX (Notices) and Section XIII (Review and Approval of Submittals) of the Consent Decree of the amount of such Unspent Project Dollars and provide a proposed plan and schedule for one or more new Environmental Mitigation Projects to satisfy the requirements of this Consent Decree

.

B. In addition to the requirements of Section I of this Appendix, the plan required to be submitted pursuant to this Section of this Appendix shall satisfy the following criteria:

1. Provide for the expenditure of all remaining Unspent Project Dol lars

.

2. Describe the reason all remaining Unspent Project Dollars have not been allocated and/or spent.

3. Describe how the proposed p rojects in the plan are consistent with the requirements of this Section and the Consent Decree, and how the
pr ojects will result in the emission reductions projected to be reduced pursuant to this Section.

4. Include a budget and schedule for completing the project on a phased schedule, and the supporting methodologies and calculations for the budget.

32