STATE OF INDIANA ) BEFORE THE INDIANA DEPARTMENT

) SS: OF ENVIRONMENTAL MANAGEMENT

COUNTY OF MARION )

COMMISSIONER OF THE DEPARTMENT )

OF ENVIRONMENTAL MANAGEMENT, )

)

Complainant, )

)

v. ) CASE NO. 2000-9024-A

)

NORTHERN INDIANA PUBLIC )

SERVICE COMPANY, )

)

Respondent. )

AGREED ORDER

The Complainant and the Respondent desire to settle and compromise this action without hearing or adjudication of any issue of fact or law, and consent to the entry of the following Findings of Fact and Order. Pursuant to IC 13-30-3-3, entry into the terms of this Agreed Order does not constitute an admission of any violation contained herein. Respondent's entry into this Agreed Order shall not constitute a waiver of any defense, legal or equitable, which Respondent may have in any future administrative or judicial proceeding.

I. FINDINGS OF FACT

1. Complainant is the Commissioner (hereinafter referred to as "Complainant") of the Indiana Department of Environmental Management, a department of the State of Indiana created by IC 13-13-1-1.

2. Respondent is Northern Indiana Public Service Company (hereinafter referred to as "Respondent"), which owns and operates R. M. Schahfer Generating Station located in Wheatfield, Indiana.

3. The Indiana Department of Environmental Management ("IDEM") has jurisdiction over the parties and subject matter of this action.

4. Pursuant to IC 13-30-3-3, IDEM issued a Notice of Violation via Certified Mail to:

Jack Watkins, Principal Nina A. Rausch

Environmental Compliance Registered Agent

Northern Indiana Public Service Co. NiSource, Inc.

5265 Hohman Avenue 801 E. 86^th Avenue

Hammond, IN 46320 Merrillville, IN 46410

5. Pursuant to 326 IAC 3-5, affected facilities are required to continuously monitor the applicable emissions. Respondent's Boiler Unit 18 at R. M. Schahfer Generating Station is required to continuously monitor opacity emissions.

• During the fourth quarter of 1999 (4Q99), Respondent experienced opacity monitor downtime at Boiler Unit 18's west opacity monitor for 86.8 hours or 5.48% of the 1584 operating hours, violating 326 IAC 3-5.

• Boiler Unit 18 was taken offline from October 1 through 30, 1999, for routine maintenance. During this maintenance period, an electrical short occurred which destroyed the west opacity monitor.



• Respondent submitted to IDEM monitoring data for Boiler Unit 18's east opacity monitor for the fourth quarter of 1999. The data for the east opacity monitor did not reveal any opacity excursions for the east monitor while the west opacity monitor was not operating.

9. In recognition of the settlement reached, Respondent waives any right to administrative and judicial review of this Agreed Order.

II. ORDER

1. This Agreed Order shall be effective ("Effective Date") when it is approved by the Complainant or her delegate, and has been received by the Respondent. This Agreed Order shall have no force or effect until the Effective Date.

• By August 15, 2001, Respondent shall develop and submit to IDEM's Office of Enforcement for approval standard operating procedures (SOPs) to prevent unscheduled monitor downtime. The SOPs shall include regularly scheduled preventive maintenance program which increases the continuous opacity monitor (COM) inspections to a minimum frequency of once a shift when problems are detected. In addition, the SOPs shall include an inventory system of maintenance parts for the COMs. The inventory shall consist at the minimum of spare parts which Respondent has observed a history of malfunctions. Also, the SOPs shall include an alternative monitoring and operating procedure for events when a COM's downtime exceeds one hour in length during required daylight monitoring periods. Monitoring shall begin within one hour of identifying the event. Failure to timely identify the COM downtime does not preclude IDEM from taking enforcement action for that downtime.

If the submitted SOPs are determined to be inadequate by IDEM's Office of Enforcement, Respondent shall resubmit acceptable SOPs to the Office of Enforcement within thirty (30) days of receiving written notice of inadequacy. IDEM shall not unreasonably withhold its approval of the SOPs if they meet the aforementioned criteria.

3. All submittals required by this Agreed Order, unless notified otherwise in writing, shall be sent to:

J. Brian Eaton, Enforcement Case Manager

Office of Enforcement

Indiana Department of Environmental Management

100 N. Senate Avenue

P. O. Box 6015

Indianapolis, IN 46206-6015

4. Respondent is assessed a civil penalty of Six Thousand Two Hundred and Fifty Dollars ($6,250). Said penalty amount shall be due and payable to the Environmental Management Special Fund within thirty (30) days of the Effective Date of this Agreed Order.

• In the event the terms and conditions of paragraph two(2) are violated, the Complainant may assess and the Respondent shall pay a stipulated penalty in the amount of Five Hundred Dollars per day ($500), per violation.

Stipulated penalties shall be due and payable within thirty (30) days after Respondent receives written notice that the Complainant has determined a stipulated penalty is due. Assessment and payment of stipulated penalties shall not preclude the Complainant from seeking any additional relief against the Respondent for violation of the Agreed Order. In lieu of any of the stipulated penalties given above, the Complainant may seek any other remedies or sanctions available by virtue of Respondent's violation of this Agreed Order, or Indiana law, including but not limited to civil penalties pursuant to IC 13-30-4.

6. Civil and stipulated penalties are payable by check to the Environmental Management Special Fund. Checks shall include the Case Number of this action and shall be mailed to:

Cashier

IDEM

100 N. Senate Avenue

P. O. Box 7060

Indianapolis, IN 46207-7060

7. In the event that the civil penalty required by paragraph Four (4) is not paid within thirty (30) days of the Effective Date of this Agreed Order, Respondent shall pay interest on the unpaid balance at the rate established by IC 24-4.6-1-101. The interest shall continue to accrue until the civil penalty is paid in full.

8. This Agreed Order shall apply to and be binding upon the Respondent, its officers, directors, principals, agents, successors, subsidiaries, and assigns. The Respondent's signatories to this Agreed Order certify that they are fully authorized to execute this document and legally bind the parties they represent. No change in ownership, corporate, or partnership status of the Respondent shall in any way alter its status or responsibilities under this Agreed Order.

9. In the event that any terms of the Agreed Order are found to be invalid, the remaining terms shall remain in full force and effect and shall be construed and enforced as if the Agreed Order did not contain the invalid terms.

10. The Respondent shall provide a copy of this Agreed Order, if in force, to any subsequent owners or successors before ownership rights are transferred. Respondent shall ensure that all contractors, firms and other persons performing work under this Agreed Order comply with the terms of this Agreed Order.

11. This Agreed Order shall remain in effect for two (2) years from the Effective Date of this Order.

TECHNICAL RECOMMENDATION: Northern Indiana Public Service Co.:

Department of Environmental Management

By: _________________________ By: _________________________

David P. McIver

Chief, Air Section

Office of Enforcement Printed: ______________________

Title: ________________________

Date: ________________________ Date: ________________________

COUNSEL FOR COMPLAINANT: COUNSEL FOR RESPONDENT:

Department of Environmental Management

By: _________________________ By: ________________________

Office of Legal Counsel

Department of Environmental Management

Date: _______________________ Date: ______________________

APPROVED AND ADOPTED BY THE INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT THIS _____ DAY OF ____________________, 20___.

For the Commissioner:

Signed on May 22, 2001

___________________________

Felicia A. Robinson

Assistant Commissioner

Office of Enforcement