COLORADO DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT 

FINAL AGENCY-WIDE 

SUPPLEMENTAL ENVIRONMENTAL PROJECTS 

 POLICY

 

______________Signed_______________________ ____5/9/08____ 

Martha Rudolph, Director Date 

Environmental Programs 

 

______________Signed ________________________ ____5/9/08_____ 

Paul Tourangeau, Director Date 

Air Pollution Control Division 

 

______________Signed __________________________ ____5/9/08_____ 

Gary Baughman, Director Date 

Hazardous Materials and Waste Management Division 

 

______________Signed __________________________ ____5/9/08_____ 

Steve Gunderson, Director Date 

Water Quality Control Division 
Colorado Department of Public Health and Environment Revision Date: 5/5/08 

Revision No.: 3 Subject: Agency-wide Supplemental Environmental Projects Policy Page 2 of 18 

Colorado Department of Public Health and Environment 

Agency-wide Supplemental Environmental Projects Policy 

Note to reader: This policy is intended to be an integral part of each of the department’s 

environmental division’s entire Enforcement and Compliance Assurance Policy and procedures. 

It is not a stand-alone document, and must be read and implemented in conjunction with the 

larger enforcement program implementation strategies (for example, any agreements the 

department has reached with the U.S. Environmental Protection Agency).

I. Background 

In all settlements, violators are required to achieve and maintain compliance with all applicable 

regulations. All settlements include appropriate monetary penalties related to the environmental damage 

and financial gain the violator has received as a result of the violation. In some instances, violators may 

receive some penalty relief resulting from their commitment to implement Supplemental Environmental 

Projects (SEPs). SEPs are projects that benefit either the environment or public health that a violator 

agrees to undertake in settlement of an enforcement action, but that the violator is not otherwise legally 

required to perform. Whether the department decides to accept a proposed SEP as part of a settlement is 

purely within its discretion. Even though a project appears to satisfy all of the provisions of this policy, 

the department may decide for one or more reasons that a SEP is not appropriate, e.g., the cost of 

reviewing or overseeing the SEP is excessive, the SEP is not enforceable, or the department believes the 

violator may not have the ability or reliability to complete the proposed SEP. The department cannot 

accept SEP funds, nor can a SEP project fund efforts that the department is required to do pursuant to act 

or regulation. 

For the purposes of this policy the term “First Party SEP” refers to a SEP in which a violator chooses 

to complete a project within its own facilities. A “Third Party SEP” refers to a SEP where the violator 

makes a donation to a third party or, in certain circumstances, performs the SEP to the benefit of a third 

party. 

II. SEP Basic Guidelines 

A SEP will not be approved if the violator is otherwise legally required to perform the proposed 

activity. For example, the SEP must not include actions required by any federal, state, or local law, 

regulation, administrative or court order or permit. Further, SEPs cannot include actions that the violator 

may be required to perform as injunctive relief, as part of a settlement or order in another legal action, or 

by state or local requirements. 

SEPs may be used to mitigate some or all of a civil penalty in accordance with the following criteria: 

(1) While a First Party SEP may not be used to mitigate the economic benefit component of a monetary 

penalty1

 a donation to a third party can be used to mitigate economic benefit. A SEP performed by a 

violator to the benefit of a third party may also be approved to mitigate economic benefit at the 

department’s discretion; (2) the cost of a SEP will generally exceed the amount of penalty mitigation 

offered in exchange (see Section V, Extent to Which a SEP Can Mitigate a Penalty); (3) Because 

deterrence objectives must be met, SEPs may only mitigate 80% of the gravity portion of a penalty2

; (4) 

 

1

 Except as allowed in CDPHE’s Agency-wide Policy on Assessing Administrative Penalties Against Eligible Governmental 

Entities. 

2

 Unless a violator is a small business (See Section “Extent to Which a SEP Can Mitigate a Penalty”) or except as allowed in 
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Violators are precluded from seeking or receiving any tax benefit or favorable tax treatment associated 

with a SEP, including Third Party SEP donations; and (5) all SEPs must result in improvements to the 

environment or reduce the total risk burden posed to public health or the environment by the identified 

violations beyond what is required by law (“beyond compliance”).3

 If a SEP benefits a medium different 

from the medium in which the violation occurred, the medium benefited by the SEP will be consulted 

before approval of the SEP (e.g., if a water violation occurred, and a hazardous waste SEP is proposed, 

the Water Quality Control Division will consult with the Hazardous Materials and Waste Management 

Division prior to approval of the SEP). 

Although a media nexus is not required for SEPs, projects with a geographic nexus to the 

violation are given preference. The SEP should typically benefit the area or community adversely 

affected by the violation(s). However, the department does recognize that a facility’s operations may also 

have environmental and public health impacts outside of the immediate geographic area. 

 SEPs are not intended to reward the violator for undertaking activities that are obviously in its 

economic self-interest (e.g., update or modernize a plant to become more competitive). If equipment 

replacement occurs as part of a SEP, the violator must subtract the value of any equipment sold in the 

calculation of expenditures. Although a SEP at times may benefit a violator, it must also provide 

significant benefit to public health and/or the environment. For First Party SEP proposal guidelines, 

please see Attachment C. 

 The department particularly encourages investments in pollution prevention or energy efficiency 

projects (see Attachment A). These types of projects are designed to make production more efficient 

and reduce the likelihood of noncompliance, and provide significant long-term environmental and health 

benefits to the public. Although pollution prevention generally pays off for the company in the long 

term, it may not appear attractive to the company because of the associated technical risk, temporary 

impacts on production rates during project implementation or a long payback period. A penalty reduction 

through a SEP can offset such concerns and make the project more attractive. For example, business 

decisions are often made based on the payback period of the project (in other words, the amount of time 

required for an investment to generate enough income to cover the initial capital cost of the project). The 

payback period of pollution prevention projects is often longer than the payback period a company uses 

to evaluate the economic attractiveness of an investment. A penalty reduction can decrease the up-front 

cost of the project, thus shortening the effective payback period. 

III. Third Party SEPs 

 The department may approve a donation to a third party for the implementation of a SEP or a SEP 

performed by the violator to the benefit of a third party to mitigate either the gravity and/or the economic 

benefit component of a penalty. Third Party SEP projects must meet all the requirements of a SEP as 

described in this policy with a few exceptions. A local government entity that is a recipient of SEP funds 

from a donation is able to use those funds for a project that would enable it to come into compliance with 

environmental regulations, provided that the donation comes from a violator that is not affiliated with 

that local government entity. It should also be noted that a cash donation will typically receive a 1 to 1 

ratio for penalty mitigation. While the SEP Coordinator at the department can assist a violator with 

tracking a SEP, it is the violator who is ultimately responsible and legally liable for ensuring that a SEP 

 

CDPHE’s Agency-wide Policy on Assessing Administrative Penalties Against Eligible Governmental Entities. 3

 The environmental benefit from a SEP is not required to be quantifiable, although quantifiable benefits are strongly 

preferred. 
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is completed satisfactorily. The violator may not transfer this responsibility and liability to a third party. 

For information on third party and community SEP proposal guidelines, please see Attachment D.

IV. Categories of Approvable SEPs 

The department considers the following seven (7) categories of projects for potential SEPs. Each 

project will be closely scrutinized to ensure that all aspects of the project(s) fulfill the legitimate 

objectives of the department’s SEP policy in all respects. 

1) Pollution Prevention Projects According to the Pollution Prevention Act of 1992, pollution 

prevention is defined as “any practice which reduces the use of any hazardous substance or amount of 

any pollutant or contaminant prior to recycling, treatment or disposal, and reduces the hazards to 

public health and the environment associated with the use or release or both of such substances, 

pollutants, or contaminants.” For the purposes of developing a SEP, a pollution prevention project is 

any project that substantially reduces or prevents the generation or creation of pollutants through: 

• Source reduction - eliminating the source of pollution by changing industrial processes or 

substituting less polluting fuels or less toxic raw materials in existing processes; 

• Alternative/Renewable Energy, Energy Efficiency – application of measures and technologies 

to reduce/eliminate dependency upon traditional resources. Examples include, but are not limited 

to: wind, solar, biomass and geothermal powered generation of electricity, ethanol-based (“E-85”) 

or bio-diesel fuels for vehicles, and sustainable building engineering; 

• Waste minimization - conserving those materials that are sources of pollution; this includes 

application of closed-loop processes or other resource-efficiency measures; 

• In-process recycling – returning waste materials produced during a manufacturing process 

directly to production within the same manufacturing process using dedicated, fixed, and 

physically integrated equipment so that no releases, including fugitive releases, occur; 

• Innovative recycling technologies - substantially reducing the discharge of generated pollutants 

through innovative recycling technologies that keep the pollutants out of the environment in 

perpetuity; and 

• Conservation - protecting natural resources through conservation or increased efficiency in the 

use of energy, water or other materials. A specific example of such a project that the department 

encourages is an up-front capital investment in energy efficiency improvements and reinvestment 

of the resulting cost savings into a long-term green energy program either on-site or in a 

community-based program, or a combination of both. Details of this type of energy efficiency 

project are provided in Attachment A. 

In order for a project to meet the definition of pollution prevention, there must be an overall decrease 

in the amount and/or toxicity of pollution released to the environment, not merely a transfer of 

pollution among media. 

2) Pollution Reduction Projects 

A pollution reduction project is defined as a project that goes substantially beyond compliance 

with permit or regulatory limitations to further reduce the amount of pollution discharged into the 

environment. Where a pollutant or waste stream already has been generated or released, a pollution 

reduction approach (recycling, treatment, containment, or disposal techniques) may be appropriate, so 
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Revision No.: 3 Subject: Agency-wide Supplemental Environmental Projects Policy Page 5 of 18 

long as it does not create an increased or adverse cross-media impact on public health or the 

environment. Examples include: (a) a project that reduces the discharge of pollutants through more 

effective end-of-pipe or stack removal technologies; (b) improved operation and maintenance; and, 

(c) recycling of residuals for use as raw materials in production off-site, thereby reducing the need for 

treatment, disposal, or consumption of energy or natural resources. 

3) Environmental Restoration and Protection Projects 

The objective of an environmental restoration project is to repair damage done to the environment 

beyond the need to remediate the damage done by the violation. Cross-media projects are a preferred 

option for this type of project. Examples of approvable projects include: (a) reductions in discharges 

of pollutants that are not the subject of the violation or the subject of other regulatory requirements 

within an affected air basin or watershed; (b) restoration of a wetland; (c) development of a 

conservation program or protection of habitat critical to the well-being of a species or ecosystem; and 

(d) purchase and management of a watershed area as an open space buffer zone to protect sensitive 

species or drinking water supply; and conservation easements. 

Environmental restoration projects could include, in appropriate circumstances, projects that 

involve the remediation of facilities and buildings, provided such activities are not otherwise legally 

required. This includes the removal/mitigation of contaminated materials, such as contaminated 

soils, asbestos, and leaded paint, which are a continuing source of releases and/or threats to 

individuals. 

4) Environmental Assessments 

Under the category of environmental assessments, two types of environmental assessment 

projects have been approved by the department to date: (a) pollution prevention assessments; and (b) 

development and implementation of environmental management systems. These SEPs can only be 

approved where the violator commits to provide the department with copies of all assessments and 

reports and commits to implementation of technically feasible and economically reasonable steps 

identified in the assessments. If the violator chooses not to implement all recommendations in the 

assessment, it must submit a justification for not implementing certain recommendations. 

Environmental audits that merely represent compliance-focused, general good business practices are 

not acceptable SEPs. 

Pollution prevention assessments are independent, systematic reviews of processes and operations 

conducted internally by a violator. The goal of the assessment is to identify opportunities to reduce 

the use, production, and generation of hazardous and other pollutants. 

An environmental management system (EMS) assessment is a systematic, independent and 

documented verification process, conducted by a third party EMS auditor. The auditor objectively 

obtains and evaluates evidence to determine whether an entity’s EMS conforms to the EMS 

requirements, which closely reflect the ISO 14001 (2004) criteria. This type of evaluation may 

identify the need for: (a) a formal corporate environmental compliance policy and enforceable 

procedures for implementation of that policy; (b) the need for planning processes as they pertain to an 

EMS, such as hazard identification and risk assessments, environmental programs, etc.; (c) 

implementation and operation criteria which includes: educational and training programs for 

employees, communication activities, EMS documentation requirements, operation and maintenance 
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programs and in-plant and community emergency plans; (d) checking and corrective action criteria, 

which includes monitoring and measurement systems, record keeping and reporting systems and 

internal audit criteria; and (e) management review activities. 

Any pollution prevention assessment or environmental management system development 

conducted as part of a SEP should include a materials accounting component that estimates the 

amounts of certain [or all] materials entering and exiting the facility (see Attachment B for a full 

definition of materials accounting). 

The calculation of an appropriate mitigation for assessment projects will take place in two phases. 

In the first phase, the violator will receive penalty mitigation for the cost of undertaking the 

assessment. Upon completion of the assessment, the violator may receive further mitigation for 

implementation of activities recommended in the assessment, provided that such activities meet all 

other requirements for a SEP described elsewhere in this policy and are reviewed and approved by 

the department. The SEP settlement shall establish a timeframe within which the second phase must 

be completed, but generally no later than 24 months from the effective date of the agreement. If the 

violator opts not to complete the second phase, the balance of the unpaid penalty becomes due and 

payable to the department.

5) Environmental Education and Training

a) Environmental education projects are intended to improve environmental behavior, raise the 

public’s awareness of actions it can take to prevent pollution, and promote environmental 

sustainability. Environmental education projects increase public awareness and knowledge about 

environmental issues and provide the skills necessary to make informed decisions and take 

responsible actions. It teaches individuals how to weigh various sides of an issue through critical 

thinking and it enhances their own decision-making skills. The department will give priority to 

projects that include an action component. An action component is needed to provide measurable 

quantifiable outcomes. An example of an acceptable project would be a lesson plan given to 

schoolchildren on energy efficiency. The action component could be to purchase compact 

fluorescent light bulbs for the homes of the children. The children would then calculate how 

much energy and money they are saving through the installation of the energy saving measure, 

reporting the cumulative results in the SEP completion report. Education projects that focus on 

fostering environmentally beneficial behavior using social marketing tools4

 and/or follow 

National Guidelines for Excellence in Environmental Education (where applicable) are preferred. 

The violator must contract with an appropriate external expert to develop and implement an 

environmental education project. 

b) Environmental training projects are defined as the use of publications, broadcasts, or seminars 

that underscore the importance of complying with environmental laws or disseminate technical 

information about the means of complying with environmental laws. These projects provide 

necessary training and technical support to identify, achieve, and maintain compliance with 

applicable regulatory requirements; avoid violations; and, go beyond compliance by reducing the 

generation, release or disposal of pollutants beyond legal requirements. Public awareness 

projects may include: (a) sponsoring industry-wide seminars directly related to correcting 

 

4

 For more information on social marketing tools and techniques, please see www.toolsofchange.com, www.cbsm.com or 

contact the SEP Coordinator at 303-692-2976 for additional assistance. 
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Revision No.: 3 Subject: Agency-wide Supplemental Environmental Projects Policy Page 7 of 18 

widespread or prevalent violations within an industry; or (b) organizing a conference on pollution 

prevention solutions for compliance in a particular sector. The violator must contract with an 

appropriate external expert to develop and implement an environmental training project. 

Environmental training projects using social marketing techniques3 are encouraged. 

6) Public Health 

A public health project provides preventive, screening, diagnostic, therapeutic health care or 

education related to actual or potential threats to human health. This may include epidemiological 

data collection and analysis, medical examinations of potentially at-risk or affected persons, 

collection and analysis of blood/fluid/tissue samples, medical treatment and rehabilitation therapy. 

7) Other Types of Projects

Facilities may propose other types of projects as long as those projects meet all additional 

requirements of a SEP as described in this policy. 

Note: SEPs for research will only be allowed if the study investigates innovative practical 

pollution prevention or reduction solutions. In addition, the entity conducting the SEP must commit 

to implement the results of the study, as feasible, and make available the technology or solution to 

other interested facilities. 

V. Extent to Which a SEP Can Mitigate a Penalty 

There are two steps in determining the extent to which a SEP can mitigate a penalty. The first step is 

to calculate the minimum portion of the penalty assessment that must be collected in cash. The second 

step is to determine the amount of credit each dollar spent on the SEP will receive against the penalty. 

1) Penalties are comprised of a gravity component and, when applicable, an economic benefit 

component. 

a) With regard to the gravity component, the minimum cash component of the penalty 

must equal 20%. There are exceptions for small businesses (defined as having fewer 

than 50 employees) as well as for eligible governmental entities5

. These entities may 

be allowed to mitigate 100% of the gravity component with a SEP with no cash 

penalty. The department, however, retains complete discretion in allowing SEPs to 

mitigate penalties. 

b) With regard to the economic benefit component, 100% of the economic benefit should 

be collected in cash, unless the department allows a violator to mitigate economic 

benefit through a Third Party SEP. Eligible Governmental Entities may be allowed to 

mitigate the entire penalty in accordance with the department’s Agency-wide Policy 

on Assessing Administrative Penalties Against Eligible Governmental Entities. 

2. In general, the department will consider how well SEPs perform against the five factors listed 

below in allowing penalty mitigation. Only exceptional projects will be allowed the 

maximum mitigation. 

a) Benefits to the Public or Environment at Large - All SEPs must meet this objective. 

For example, the extent to which a project reduces discharges of pollutants to the 

 

5

 See the department’s Policy on Settling Administrative and/or Civil Penalties Against Eligible Governmental Entities 
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environment and/or reduces risk to the general public resulting in a higher positive 

environmental effect, rate higher in these factors. 

b) Innovations - SEPs that further the development and implementation of innovative 

processes, technologies, or methods to more effectively reduce the use, generation, 

release, or disposal of pollutants; conserve natural resources; or, promote compliance 

do well in this factor. 

c) Environmental Justice - SEPs that mitigate damage or reduce risk to minority or lowincome populations that have been disproportionately exposed to pollution, or are at 

environmental risk, perform well in this factor. 

d) Cross-media Impacts - SEPs that reduce emissions to more than one medium perform 

well in this factor. 

e) Pollution Prevention - SEPs that develop and implement pollution prevention 

techniques and practices perform well in this factor. 

f) Community Input - SEPs that perform well on this factor will have been developed 

taking into consideration input received from the affected community. No credit 

should be given for this factor if the defendant/respondent did not actively participate 

in soliciting and incorporating public input into the SEP. 

In determining the amount of credit each dollar spent on a SEP should receive, the ratio of penalty 

mitigation to SEP cost shall typically be no less than 1 to 1.5 (e.g., to receive $100,000 in penalty 

mitigation, a violator must spend $150,000 on a SEP). The 1 to 1.5 ratio of civil penalty mitigation 

recognizes the potential cost savings, public relations, and other benefits associated with SEP 

expenditures that may accrue to the violator. SEP costs may be lower than 150% and, at times, as low as 

100% of the amount of the penalty mitigation, if the violator chooses a pollution prevention or energy 

efficiency SEP and/or can prove there is no benefit to the violator associated with the expenditures6

. 

Credit for a SEP cannot be given for a project planned or initiated before the enforcement action because 

it credits a project that would otherwise occur. A cash donation to a department-approved third party for 

an approved SEP will typically receive a 1 to 1 ratio. 

VI. Legal Guidelines for Negotiating SEPs

• SEPs are not required to have a media nexus to the violation. 

• Projects with a geographic nexus are given preference. 

• A project cannot be inconsistent with any underlying statute and generally must advance at least 

one of the declared objectives of state or federal requirements.

• Since the primary purpose of this policy is to obtain environmental or public health benefits that 

may not have occurred "but for" the settlement, First Party projects started before the department 

identifies a violation are not eligible as SEPs. Projects developed or implemented before the 

identification of a violation may mitigate the penalty in other ways. Depending on the specifics, if 

 

6

 Except as allowed in CDPHE’s Agency-wide Policy on Assessing Administrative Penalties Against Eligible Governmental 

Entities. 
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a company had initiated environmentally beneficial projects before the enforcement commenced, 

the initial penalty calculation could be lower or the violation deemed less severe due to the 

absence of recalcitrance, no history of other violations, good faith efforts or other factors 

enumerated in the statutes. 

• The department may neither play a role in managing or controlling funds to be set aside or 

escrowed for performance of a SEP, nor retain authority to manage or administer the SEP. 

Further, the department will not approve SEPs that require the violator to fulfill a function that is 

otherwise required by statute. The department may provide oversight to ensure that a project is 

implemented pursuant to the provisions of the settlement and will retain legal recourse if the SEP 

is not adequately performed. 

VII. Drafting Enforceable SEPs 

Generally, the SEP must be set forth in sufficient detail in a signed settlement agreement. The 

settlement agreement must accurately and completely describe the SEP, including the specific actions to 

be performed. If the SEP is to be in the form of a donation to a department-approved third party, the 

project(s) can be identified at a later date so long as the department has the final approval of the 

project(s). In addition, the agreement should provide for a reliable and objective means to verify that the 

violator has completed the project in a timely manner. To the extent feasible, the violator should be 

required to estimate, at the outset, the benefits associated with the SEP and to subsequently track and 

measure those benefits. The violator is ultimately responsible and legally liable for ensuring that a SEP is 

completed satisfactorily. The violator may not transfer this responsibility and liability to a third party. The 

settlement agreement should require a violator to clearly state that the project was undertaken as part of 

an enforcement action whenever the violator publicizes the SEP and/or the results of the SEP. 

VIII. Measurement 

When feasible, the initial SEP proposal should include an estimate of all environmental benefits, a 

description of the methodology used to estimate those benefits, and baseline data regarding the relevant 

environmental impact in order to measure progress. 

The violator may be required to submit status reports as appropriate. A “SEP Completion Report” 

must be submitted to the department no later than 2 months after project completion. If more time is 

needed for outcome measurements or project evaluation, a deadline extension should be requested in 

writing to the department. At a minimum, the SEP Completion Report should include: 

1) A detailed description of the project as implemented; 

2) A description of any operating problems encountered and the solutions thereto; 

3) Itemized costs, documented by copies of purchase orders and receipts or canceled checks; 

4) Certification and demonstration that the SEP has been fully implemented pursuant to the 

provisions of the Consent Order; and 

5) A description of the environmental and public health benefits resulting from implementation 

of the SEP along with quantification of the outcomes and benefits. 

 The calculation of the cost and benefits of the SEP must include actual costs and economic benefits to 

the violator. For example, the violator must clearly document any benefits received by the sale of 

equipment being replaced by the SEP or benefits received from land donations. 

Please see Appendix E for SEP Completion Report Guidelines. 
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IX. Failure to Complete a SEP and Penalties

If a SEP is not completed to the satisfaction of the department within the time periods specified, or the 

violator fails to implement the terms of the SEP for the entire life of the agreement, the remaining penalty 

mitigation attributed to the SEP and/or a stipulated penalty shall be paid to the department as an 

administrative penalty. The department may impose a stipulated penalty, in addition to the remaining 

penalty mitigation attributed to the SEP, for the violator’s failure to comply with the specific 

requirements of the SEP (e.g., failure to meet deadlines in the agreement or adequate completion of the 

SEP). The determination of whether a SEP has been satisfactorily completed is in the sole discretion of 

the department. Although it is the violator who is ultimately responsible for ensuring that a SEP is 

completed satisfactorily, third party SEP recipients should recognize that any failure on their part to 

complete a SEP or submit a SEP completion report would result in a loss of eligibility for receiving future 

SEP funding. 
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Attachment A: Specific elements of an energy efficiency/green energy SEP 

(1) Determine last year’s energy use and cost. 

(2) If known energy efficiency improvements are planned or have been identified prior to the SEP, the 

company can implement these ideas. If energy efficiency improvements are not planned, an energy 

audit should be conducted. An outside third party should be considered for this work. The Division 

can assist a company in locating a third party assessor, if needed. 

(3) List all possible energy efficiency projects, capital costs and estimated savings. 

(4) Decide on top-priority projects and implement them. The company can mitigate the civil penalties 

assessed against the cost of capital improvements and other up-front costs of projects. 

(5) Energy usage should be tracked on a monthly basis to determine energy efficiency savings. 

(6) The savings should be deposited into an interest-bearing account that will be used to: 

a) Invest in an on-site green energy program (see sample calculations below). For example, the 

company would purchase x number of blocks of wind energy (1 block = 100 kilowatt-hours @ 

$2.50/block of wind energy from Xcel’s Windsource Program) for a ten-year period; or, 

b) Fund and market a community-based green energy program. The fund would be setup as a cost 

share opportunity for utility customers in the community to purchase Windsource at a reduced 

premium rate of $.01/kWh and the fund would pay the remaining $.015 premium for a minimum 

of x number of years; or, 

c) Invest 1⁄2 the savings from energy efficiency improvements in a community fund to implement a 

Windsource buy-down program and the other 1⁄2 of the savings in a fund for the purchase of x

number of blocks of Windsource to be used on-site. 
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Sample Calculations and Worksheet for 

Determining Windsource Purchase

Step I - Determining Electricity Use:

If actual electricity use data are not available, use can be estimated by multiplying the square footage of your facilities by 20 

kWh/yr./sq. ft. For example, if the rented or occupied square footage for your agency is 129,592-sq. ft. then your estimated 

annual electricity use is: 

129,592 sq. ft. x 20 kWh/yr./sq. ft. = 2,591,840 kWh/yr. 

Your estimate: ___________ sq. ft. x 20 kWh/yr./sq. ft. = _______________ kWh/yr. 

Step II - Determining Electricity Cost:

If actual electricity cost data are not available, electricity cost can be approximated by multiplying the electricity use by 

$0.05/kWh. For example, if the actual or estimated electricity use for your facility is 2,591,840 kWh/yr., then your estimated 

annual electricity cost is: 

2,591,840 kWh/yr. X $0.05/kWh = $129,592/yr. 

Your estimate: ___________ kWh/yr. X $0.05/kWh = $_____________/yr. 

Step III – Determining Windsource Goal & Purchase:

Determining the Windsource purchase goal will depend on the settlement agreement. The end Windsource goal will be the 

percentage of the electricity that will be purchased from Windsource times the annual electricity use. For example: if 25% of 

the facilities electricity will be purchased through Windsource, then: 

25% x 2,591,840 kWh/yr. = 647,960 kWh/yr. 

Your Goal: _______% x _____________ kWh/yr = ________________ kWh/yr. 

647,960 kWh/yr. ÷ 1,200 Wh/yr./block = 540 blocks (rounded up) 

Your Block Purchase: _________ kWh/yr. ÷ 1,200 kWh/yr./block = _________ blocks 

Step IV – Determining Environmental Benefits

The Xcel Energy of Colorado estimates that for every annual block of Windsource purchased, the benefit to the earth’s climate 

is the same as planting one-half acre of trees, not driving an auto for 2,400 miles or not burning 1,800 pounds of coal. For 

example: 

540 blocks x 1⁄2 acre of trees/block = 270 acres of trees planted each year 

540 blocks x 2,400 vehicle miles traveled/block = 1,296,000 vehicle miles not traveled each year 

540 blocks x 1,800 lbs. of coal burned/block = 972,000 lbs. of coal not burned each year 

Your Impact: 

______ blocks x 1⁄2 acres of trees/block = ____________ acres of trees planted each year 

______ blocks x 2,400 vehicle miles/block = _____________ miles not driven each year 

______ blocks x 1,800# of coal burned/block = ______________ # of coal not burned each year 

Step V – Determining Incremental Cost

The cost of all the Windsource energy you purchase will be based on your actual metered electricity usage billed at the base 

electric rate plus a Monthly Wind Energy Service Adjustment. The cost of the Windsource Adjustment differs according to 

your base electric rate and currently varies from $0.87 - $0.91 per 100kWh block per month or $10.44 - $10.92 per 100 kWh 

per year. For more information, please contact Xcel Energy at 1-800-481-4700.

540 blocks x $10.92/yr./block = $16,200/year 

Your estimate: ______ blocks x $10.92/yr./block = $_____________/year 

$ ____________/yr. x 10 years = $_________________ total incremental cost 
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Attachment B: Definition of Materials Accounting

Materials accounting is an estimate of the inputs and outputs of hazardous or polluting substances 

over a given time period, i.e., a calendar year. If all inputs and outputs are properly accounted for, inputs 

should equal outputs. Estimating the inputs and outputs of all substances allows facility managers to 

clearly see how materials are used and to identify areas for pollution prevention. 

Inputs include substances: 

• stored at the facility at the beginning of the calendar year; 

• brought on site as raw materials; 

• manufactured as products, co-products, or non-product output; and/or 

• recycled and used on site as raw materials (this includes all materials recycled on site but not 

in-process). 

Outputs include substances: 

• stored at the facility at the end of the calendar year; 

• consumed at the facility (e.g. molecularly altered so they no longer exist); 

• shipped off-site as product; and 

• generated as non-product output (this includes all substances that are generated by a 

production product that are neither consumed nor shipped as product, prior to recycling, 

treatment and out-of-process recycling. 
Colorado Department of Public Health and Environment Revision Date: 5/5/08 

Revision No.: 3 Subject: Agency-wide Supplemental Environmental Projects Policy Page 14 of 18 

Attachment C: First Party SEP Proposal Guidelines

This proposal guideline is to be used by a respondent in an enforcement action who requests to mitigate 

the administrative civil penalty of a department enforcement action by a SEP. In order for the 

enforcement staff to begin its evaluation of a proposed SEP, the following information is expected:

• Enforcement Action - Indicate the name of the entity and the location of the site associated with the 

enforcement action. Include the city and county. 

• Project Name - SEP title 

• Project Manager - Provide the name, mailing address and telephone number for the project 

manager, organization conducting the project (if different from the violator), and the person who will 

be responsible for submitting status reports (if different from the project manager). 

• CDPHE Contact Person - Provide the name, division, and telephone number of any department 

staff person who has assisted with the development of this project. 

• Geographical Area to Benefit From Project - Identify cities, counties, and watersheds that would 

benefit from the project. 

• Type of Project:

o Pollution Prevention o Environmental Education and Training 

o Pollution Reduction o Public Health 

o Environmental Restoration and Protection o Other: Please Specify 

o Environmental Assessments 

• Project Description - Describe the project including implementation tasks such as technology, 

operation, or process changes. Describe any efficiency, production or other benefits to the 

respondent. 

• Expected Environmental and/or Public Health Benefits - Describe the expected environmental or 

public health benefits of this project and quantify the environmental benefits to the extent practical. 

o For pollution prevention or reduction projects - Quantify the amount of each pollutant that is 

expected to be reduced beyond the level required for environmental compliance. Specify the 

media (air, water, land) to be benefited. 

o For all other types of projects - Quantify the number of sites cleaned, types of contamination 

contained/removed, acres restored or affected, etc. 

• Project Budget - Provide projected project costs. Costs must be clearly and solely attributable to the 

proposed SEP and cannot include any costs internal to the violator, such as: administrative overhead 

or staff salaries. Please also include calculations of any economic benefit to the respondent. 

• Project Schedule - Provide a proposed schedule that addresses project implementation, the submittal 

of status reports to the department and the anticipated completion date. Project implementation must 

not commence until after the department has approved the SEP in an executed enforcement action. 

• Reporting - Project reports must provide sufficient information for the department to monitor the 

project implementation status, to verify and document the proper expenditure of SEP funds, and to 

evaluate the effectiveness and benefits of the SEP. A SEP completion report must be submitted 

within 2 months of project completion (please refer to Section VIII Measurement as well as 

Appendix E for more information on SEP completion report requirements). 

If you have any questions please contact your Enforcement Case Person. 
Colorado Department of Public Health and Environment Revision Date: 5/5/08 

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Attachment D: Third Party and Community SEP Proposal Guidelines

This guidance is intended for use by local governments and organizations seeking the 

department’s consideration for potential SEP funding in their community in the event that a department 

enforcement action settlement negotiations may include a SEP located in their area. The entity proposing 

the SEP must be able to provide detailed documentation to support all statements made in a proposal. The 

project request will be retained for three years for future consideration during department enforcement 

action settlements. There are no guarantees the project will be selected. In order for the department to 

begin its evaluation of a proposed SEP, the information specified below is required. 

• Project Recipient - Provide the name, mailing address and telephone number for the project 

manager, organization desiring the project be performed, and the person who will be 

responsible for submitting status reports (if different from the project manager). The proposal 

should be accompanied by a letter or resolution from the appropriate board, governing body, 

or executive staff expressing the organization's commitment to the project if approved. 

• Name of Project - Title which identifies the SEP 

• CDPHE Contact Person - Provide the name, division, and telephone number of any 

department staff contacted regarding this project. 

• Geographical Area to Benefit from Project - Identify communities, cities, counties, 

watersheds, etc. benefiting from this environmental project. 

• Type of project: 

o Pollution Prevention o Environmental Education and Training 

o Pollution Reduction o Public Health 

o Environmental Restoration and Protection o Other: Please Specify 

o Environmental Assessments 

• Project Description - Describe project including: need for the project; availability of other 

similar services or projects in the area; and project implementation tasks such as technology, 

operation, or process changes. 

• Expected Environmental/Public Health Benefits - Explain expected environmental and/or 

public health benefits of this project and quantify the environmental benefits to the extent 

practical. 

o For pollution prevention or reduction projects - Identify the type of each pollutant 

expected to be reduced. 

o Specify the media (air, water, land) to be benefited. 

o For all other projects - Identify the sites cleaned, types of contamination 

contained/removed, acres restored or benefited, number of participants, programs offered, 

etc. 

• Project Cost - Provide estimated project costs with specific line item expenditures. Costs 

must be clearly and solely attributable to the proposed SEP. The department may approve a 

limited amount of SEP funds to be used for administrative or overhead costs. 

• Project Schedule - Provide a proposed schedule addressing project implementation and 

submittal of status reports to the department. 
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• Availability of Other Funding - Describe the availability of funding for this project from 

sources other than SEP contributors. Include sources of funding secured and applied for 

directly related to this SEP. Matching funds are not required. 

• Reporting - Project reports must provide sufficient information for the department to monitor 

the project implementation status, to verify and document the proper expenditure of SEP 

funds, and to evaluate the effectiveness and benefits of the SEP. A SEP completion report 

must be submitted to the department within 2 months after completion (please refer to 

section VIII. Measurement as well as Appendix E for more information on SEP completion 

report requirements). 

• Additional Information – The department reserves the right to require additional 

information prior to approval of the proposed SEP. 

Note: Although it is the violator who is ultimately responsible for ensuring that a SEP is completed 

satisfactorily, third party SEP recipients should recognize that any failure on their part to complete a SEP 

or submit a SEP completion report would result in a loss of eligibility for receiving future SEP funding. 

If you have any questions please contact your Enforcement Case Person or the SEP Coordinator @ 303-

692-2976 or rachel.wilson-roussel@state.co.us . 
Colorado Department of Public Health and Environment Revision Date: 5/5/08 

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Attachment E: SEP Completion Report Guidelines

• Enforcement Action Information – Include the enforcement case number and the name and 

contact information of the enforcement action respondent. 

• Project Manager - Provide the name, mailing address and telephone number for the project 

manager and organization performing the project (if different than above). 

• Name of Project - Title that identifies the SEP. 

• CDPHE Contact Person - Provide the name and division of any department staff contacted 

regarding this project. 

• Geographical Area that Benefited from Project - Identify communities, cities, counties, 

watersheds, etc. benefiting from this environmental project. 

• Type of project: Select from the categories below: 

• Project Summary: Briefly describe project and include any significant results. This summary 

should be no more than 150 words. 

• Project Description - Describe project as implemented in more detail. Include any operating 

problems encountered and the solutions thereto. 

• Environmental/Public Health Benefits - Explain environmental and/or public health benefits 

gained from this project and quantify the environmental benefits to the extent possible. (Please 

include assumptions made for calculations) 

o For pollution prevention or reduction projects - Identify each pollutant reduced and 

quantities. Include calculations and assumptions used. 

o Specify the media (air, water, land) that was benefited. 

o For other projects - Identify the sites cleaned, types of contamination 

contained/removed, acres restored or benefited, number of participants, programs 

offered, gallons of water conserved, etc. 

o Identify dollars and environmental benefits leveraged due to SEP funding 

• Project Budget – Include actual itemized costs. Documentation of the expenses MUST be 

included as an appendix to the completion report. Documentation includes: copies of purchase 

orders and receipts, invoices marked paid or with a zero balance or canceled checks. 

• Certification Statement– The respondent must certify that the SEP has been fully implemented 

pursuant to the provisions in the Consent Order. 

o Pollution Prevention 

o Pollution Reduction 

o Environmental 

Education and Training 

o Environmental Restoration and o Public Health 

o Environmental Assessments o Other Projects 
Colorado Department of Public Health and Environment Revision Date: 5/5/08 

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• Other Relevant Information – Include any other relevant information you feel is necessary to 

demonstrate the success of the project. Examples include: press releases, media reports and 

articles, letters of appreciation, etc. 

If you have any questions please contact your Enforcement Case Person or the SEP Coordinator @ 

303-692-2976 or rachel.wilson-roussel@state.co.us.