1. Modeled NAAQS Non-compliance in NE Minnesota and Proposed Path Forward

2. Summary Modeled non-compliance for 1-hr SO 2 and 1- hr NO 2 NAAQS in NE Minnesota Identified during modeling required for PolyMet’s environmental review Modeling indicates that nearby sources, not PolyMet, are culpable – 2 EGUs, 3 Taconites Proposing path forward to Risk Managers

4. 1-hr SO 2 Culpable Sources (number of receptors exceeded) Minnesota Power Laskin (2) US Steel Minntac (10) Northshore Peter Mitchell Pit (15) ArcelorMittal (23) Virginia Public Utilities (28) Standard (µg/m 3 )Modeled Result (µg/m 3 ) 196893/1705

5. Receptors in Red Exceed the Standard

6. 1-hr NO 2 Culpable Sources (number of receptors exceeded) Northshore Peter Mitchell Pit (1) Virginia Public Utilities (30) ArcelorMittal (791) US Steel Minntac (853) Standard (µg/m 3 )Modeled Result (µg/m 3 ) 188292

7. Receptors in Red Exceed the Standard

8. MPCA Guidance 12/19/12 Memo to Resolve non-project NAAQS/MAAQS Exceedances – Goal: resolve modeled exceedances via enforceable conditions – The project manager, modeler and permit engineer prioritize list of culpable sources and recommend actions to the Risk Managers for approval

9. EPA Guidance Each receptor showing an exceedance is equal and must be addressed Environmental review must consider the ramifications of a NAAQS violation and possible non-attainment Non-PSD permits can be issued, if they don’t exceed the SIL PSD permits can not be issued without an enforceable, detailed plan with timelines in place for all facilities contributing to exceedance

10. Why now? PolyMet EIS must contain a description of the path forward for the culpable sources by March 2013 PolyMet is a non-PSD source, therefore it is not necessary to resolve the NAAQS non- compliance in order for permitting

11. Why now? There will be future PSD permits submitted in the region, as soon as mid-year 2013 Solutions will be iterative and time intensive, so advantageous to start ASAP PolyMet modeling shows exceedances only within its receptor grid – not the full extent of the impacts Likely to rely on concurrent, parallel efforts

12. Proposed Resolution Team Lead: Air Policy Staff with modeling, enfocement, and permitting support 1.Letter to all culpable facilities putting them on notice of modeled exceedances 2.Require submittal of a plan within 45 days including actions to resolve modeled exceedances 3.Iterative steps, based on facility-specific plan, to get to final action 4.MPCA conducts cumulative modeled to confirm actions will result in compliance prior to becoming enforceable 5.Final action, via permit or enforceable agreement, must be taken by late-2013

13. Proposed Resolution If facility does not submit plan, does not submit adequate plan, or is not cooperative, the MPCA would issue a unilateral enforcement action requiring the facility to take action MPCA may need to specify needed emission reductions