NOTICE OF VIOLATION

Via Certified Mail# _______________ Via Certified Mail#_______________

To: Jack Watkins, Principal Nina M. Rausch, Registered Agent

Environmental Compliance NiSource, Inc.

Northern Indiana Public Service Company 801 E. 86^th Avenue

5265 Hohman Avenue Merrilville, IN 46410

Hammond, IN 46320

Case No. 2000-9024-A

Based on investigation by designated representatives of the Indiana Department of Environmental Management (IDEM) in March of 2000, Northern Indiana Public Service Company (NIPSCO), R.M. Schahfer Generating Station, located in Wheatfield, Indiana, was in violation of the following environmental statute(s), rule(s), and/or permit(s):

A. Pursuant to 326 IAC 3-5, affected facilities are required to continuously monitor the applicable emissions. Boiler Unit 18 at NIPSCO's R. M. Schahfer Generating Station is required to continuously monitor opacity emissions. During the fourth quarter of 1999 (4Q99), Respondent experienced opacity monitor downtime for 86.8 hours or 5.48% of the 1584 operating hours, violating 326 IAC 3-5.

In accordance with IC 13-30-3-3, the Commissioner is required to notify an alleged violator in writing that a violation may exist and offer an opportunity to enter into an Agreed Order providing for the actions required to correct the violations and for the payment of a civil penalty. The Commissioner is not required to extend this offer for more than sixty (60) days.

Entering into an Agreed Order will prevent the issuance of a Notice and Order of the Commissioner under IC 13-30-3-4, or the filing of a civil court action under IC 13-14-2-6. IDEM encourages settlement by Agreed Order, thereby saving time and resources. Timely settlement by Agreed Order may result in a reduced civil penalty. Settlement discussions will also allow the opportunity to present any mitigating factors that may be relevant to the violations. In addition, as provided in IC 13-30-3-3, an alleged violator may enter into an Agreed Order without admitting that the violation occurred.

If settlement is not reached within sixty (60) days of receipt of this Notice of Violation, the Commissioner may issue a Notice and Order containing the actions that must be taken to achieve compliance, the required time frames, and an appropriate civil penalty. Pursuant to IC 13-30-4-1, the Commissioner may assess penalties of up to $25,000 per day for each violation.

To discuss this matter further, please contact J. Brian Eaton at 317.233.6338 within fifteen (15) days after receipt of this Notice to request a conference. If settlement is reached, an Agreed Order will be prepared and sent for review and signature.

For the Commissioner:

Signed on 10.10.00

Date: _______________ _________________________

Felicia A. Robinson

Assistant Commissioner

Office of Enforcement

cc: Dan Hancock, OAM

Ed Surla, OAM

Jean Bauer, U.S. EPA - Region V

OAM Public File

Enforcement File