Xcel Energy 2014 Annual Report Download - page 159

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In December 2012, a lawsuit against the EPA was filed in the U.S. District Court for the District of Minnesota by the following
organizations: National Parks Conservation Association, Minnesota Center for Environmental Advocacy, Friends of the Boundary
Waters Wilderness, Voyageurs National Park Association, Fresh Energy and Sierra Club. The lawsuit alleges the EPA has failed to
perform a nondiscretionary duty to determine BART for Sherco Units 1 and 2 under the RAVI program. The EPA filed an answer
denying the allegations. The District Court denied NSP-Minnesota’s motion to intervene in July 2013. NSP-Minnesota appealed this
decision to the Eighth Circuit, which on July 23, 2014, reversed the District Court and found that NSP-Minnesota has standing and a
right to intervene.
In June 2014, the EPA and the plaintiffs lodged a consent decree with the District Court. The public comment period on the draft
consent decree has been completed. The EPA is evaluating comments and will determine whether to enter the consent decree with the
District Court. The draft consent decree would establish a schedule whereby the EPA would issue a proposal on Feb. 27, 2015, or 30
days after the District Court enters the consent decree if the decree is entered after Feb. 27, 2015. The proposal would provide the
EPA’s analysis of whether visibility impairment in the national parks is reasonably attributable to Sherco Units 1 and 2. If the EPA
determines that it is, the draft consent decree requires the EPA to make a final RAVI BART determination for these units by Aug. 31,
2015. If the EPA determines that it is not, the EPA would not determine BART for Sherco Units 1 and 2. NSP-Minnesota filed
comments opposing the proposed consent decree and will object to its entry given NSP-Minnesota’s right to intervene in the litigation
and thus participate in the negotiation of any purported settlement of the case.
Revisions to the National Ambient Air Quality Standards (NAAQS) for PM — In December 2012, the EPA lowered the primary
health-based NAAQS for annual average fine PM and retained the current daily standard for fine PM. In areas where Xcel Energy
operates power plants, current monitored air concentrations are below the level of the final annual primary standard. In December
2014, the EPA issued its final designations, which did not include areas in any states in which Xcel Energy operates.
Revisions to the NAAQS for Ozone — In December 2014, the EPA proposed to revise the NAAQS for ozone by lowering the eight-hour
standard from 0.075 parts per million (ppm) to a level within the range of 0.065-0.070 ppm. The EPA is also taking comment on a level
for the standard as low as 0.060 ppm. In areas where Xcel Energy operates, current monitored air quality concentrations are above the
proposed level of 0.070 ppm in the Texas panhandle and in the Denver Metropolitan Area. In addition, current monitored air quality
concentrations are above the proposed level of 0.065 ppm in the Twin Cities Metropolitan Area in Minnesota. Current monitored air
quality concentrations in areas of Wisconsin where Xcel Energy operates are below the range of the proposed standard. The EPA is
expected to adopt a new ozone standard in a final rule to be issued in October 2015. Depending on the level of the standard, impacted
states would study the sources of the nonattainment and make emission reduction plans to attain the standards. These plans would be
due to the EPA in 2020 or 2021. Such plans could include installation of further NOx controls on power plants. It is not possible to
evaluate the impact of this proposal until the final standard is adopted, the designation of nonattainment areas is made in late 2017 based
on air quality data years 2014-2016, and any required state plans are developed.
PSCo NOV — In 2002, PSCo received an NOV from the EPA alleging violations of the New Source Review (NSR) requirements of
the CAA at the Comanche Station and Pawnee Generating Station in Colorado. The NOV alleges that various maintenance, repair and
replacement projects at the plants in the mid to late 1990s should have required a permit under the NSR process. PSCo believes it has
acted in full compliance with the CAA and NSR process. PSCo also believes that the projects identified in the NOV fit within the
routine maintenance, repair and replacement exemption contained within the NSR regulations or are otherwise not subject to the NSR
requirements. PSCo disagrees with the assertions contained in the NOV and intends to vigorously defend its position. It is not known
whether any costs would be incurred as a result of this NOV.
NSP-Minnesota NOV — In 2011, NSP-Minnesota received an NOV from the EPA alleging violations of the NSR requirements of the
CAA at the Sherco plant and Black Dog plant in Minnesota. The NOV alleges that various maintenance, repair and replacement
projects at the plants in the mid-2000s should have required a permit under the NSR process. NSP-Minnesota believes it has acted in
full compliance with the CAA and NSR process. NSP-Minnesota also believes that the projects identified in the NOV fit within the
routine maintenance, repair and replacement exemption contained within the NSR regulations or are otherwise not subject to the NSR
requirements. NSP-Minnesota disagrees with the assertions contained in the NOV and intends to vigorously defend its position. It is
not known whether any costs would be incurred as a result of this NOV.