1. Indiana Chamber of Commerce Environmental Roundtable August 25, 2008 Thomas W. Easterly, P.E., DEE, QEP Commissioner, Indiana Department of Environmental Management

2. Topics o Antidegradation o US Court Vacature of Air Regulations o ICI Boiler MACT o CAMR o CAIR o RISC preference for Clean-up 2 We Protect Hoosiers and Our Environment

3. Dr. Barnes BP Water Conclusions Permit complies with existing regulations and fully protects drinking water, recreation and aquatic life Permit is more restrictive and protective of Lake Michigan that required by adjoining states Indiana should clarify antidegradation regulations for permit applicants and public to understand and the agency to apply 3 We Protect Hoosiers and Our Environment

4. IDEM Response Updating Indiana Antidegradation regulations – Will apply to entire State – Special protection for Lake Michigan Require more documentation for compliance schedules Obtain U.S. EPA non-objection determination prior to public notice of NPDES permit 4 We Protect Hoosiers and Our Environment

5. Antidegradation Status Stakeholder kickoff Meeting on March 7, 2008 Discussed concepts and schedule at two large stakeholder meetings on 4/29 and 6/25 Working group of fifteen members from the environmental, business and municipal segments formed to come up with draft rule language and/or identify areas for IDEM to resolve 5 We Protect Hoosiers and Our Environment

6. Antidegradation Status Working group has met on 7/15 and 8/12 and is scheduled to meet 9/16 Working group agenda items: – Applicability (7/15) – Exemptions (8/12) – DeMinimis (9/16) – Water Quality Improvement Projects – Antidegradation Demonstrations – Public Notice/Public Comment 6 We Protect Hoosiers and Our Environment

7. US Courts Overturning Rules 2006—Industrial, Commercial and Institutional (ICI) Boiler MACT—directly impacted about 10 sources with coal fired boilers. May 2008—Clean Air Mercury Rule (CAMR) impacted all Power Plants July 2008—Clean Air Interstate Rule (CAIR) impacted all Power Plants and most Indiana air pollution strategies. 7

8. Clean Air Mercury Rule EPA has received an extension of time until September 17 to file for further court review Based upon an advisory opinion of the Attorney General, IDEM will use enforcement discretion to not require compliance with Indiana’s CAMR until the rule is upheld If the rule is finally vacated, IDEM will ask the Air Board to repeal Indiana’s CAMR 8

9. Clean Air Interstate Rule EPA has received an extension of time until September 24 to file for further court review IDEM needs the emissions reductions from Indiana’s Clean Air Interstate Rule to meet a number of other requirements including: – Regional Haze SIP and BART for Utilities – Maintenance of air quality in areas redesignated to attainment for PM and Ozone – Attainment plans to PM and Ozone Nonattainment Areas 9

10. Clean Air Interstate Rule There is some support for a congressional fix to reinstate some or all of CAIR – Phase I vs Phase II is an issue IDEM is pursuing the possibility of “ICAIR” to obtain CAIR emissions reductions under State Law and provide BART, RACT and 126 protection for Indiana utilities 10

11. RISC Preference for Clean-up Only applies if facility cannot meet any of the Risk Based Clean-up Levels (RBCLs) Perceived by some to be a change in policy— intended to be a clarification of existing policy to be “Clear, Consistent and Speedy” Concept is to require an evaluation and reasoned justification for leaving high concentrations of pollution on a “closed” site 11 We Protect Hoosiers and Our Environment

12. RISC Preference for Clean-up Factors to be considered include: – Is it infeasible to clean up to Risk Based Levels? – Is it too costly to clean up to Risk Based Levels? – Will the high levels of contamination be properly contained so that human health and the environment are protected? This is a work in progress and other issues will likely be considered 12 We Protect Hoosiers and Our Environment