• STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of

The State of Connecticut and

PSEG Power Connecticut LLC t'

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Trading Agreement

and Order No. 8253

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Whereas. the Commissioner of Environmental Protection ("Commissioner") and PSEG

Power Connecticut lie ("PSEO") agree that it is in the public interest that they work

cooperatively to improve the air quality within the State of Connecticut and that the use of

discrete emission reduction credit ("DERC") trading to reduce nitrogen oxide CUNOx")

emissions will achieve this result in a timely and cost-effective manner.

A. At the request and with the agreement of PSEG, !.he Commissioner fInds the following:

1. PSEG is an electric generating company with its principal place of business in

Newark, New Jersey. PSEG owns one fossil fuel-fired electric generating

station, Bridgeport Harbor Station, at 1 Atlantic Street in Bridgeport,

Connecticut ("facility").

2. At the facility, PSEG operates Bridgeport Harbor Station Unit 2, Connecticut

Registration Number 015-0162, a 170 megawatt cyclone boiler ("boiler"). The

boiler has the dual capacity to operate on fuel oil (No.6 or No.2) and is subject

to Section 22a-174-22 of the Regulations of Connecticut State Agencies

("Regulations") pertaining to the control of NOx emissions. No.2 fuel oil is

used primarily as a stan'-up fuel. A continuous emissions monitor ("CEM"),

certified to 40 Code of Federal Regulations ("CFR") Part 75, measures NOx

emissions from the boiler.

3. When operating the boiler, PSEG exceeds the NOx allowable emission rate

limit specified in Section 22a·174-22(e)(3) of the Regulations.

4. Pursuant to Section 223-174-22(j) of the Regulations, during the non-ozone

season, PSEG intends to acquire approved DERCs until May I, 2005 for the

boiler at the facility.

B. The Commissioner, in accordance with the provisions of this Trading Agreement and

Order, pursuant to Section 22a-174-22(d)(3) of the Regulations, hereby allows PSEG to

comply with Section 22a-174-22(d)(2) of the Regulations through use of DERC trading.

~~-/I C. With the agreement of PSEG, the Commissioner, Jcting under Sections 22a-6, 22a171, 220-174, 220-176, and 22a-l77 of the Connecticut General Statutes, hereby

orders PSEG as follows:

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PSEG Power Connecticut LLC Trading Agreement and

Order No. 8253

1. Upon issuance of this Trading Agreement and Order, PSEG shall comply with Section

22a-174-22 of the Regulations through emission reduction trading. Until PSEG

achieves pennanent complian.ce with the emission standard in Section 22a·174.22(e) of

the Regulations or by Mar I, 2005, whichever occurs earlier:

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a. PSEG shall use approved DERCs as required under this Trading Agreement and

Order; and

b. PSEG shall have in its possession sufficient approved DERCs to meet applicable

NOx emission limits as allowed under this Trading Agreement and Order.

2. DERC use. Starting on October I, 2003, and until May I, 2005, before the first day

of each non-Olone season, PSEG shall have in its possession sufficient approved.

DERCs for the boiler based on the following:

a. During the non-ozone season:

PSEG shall meet a non-ozone seasonal average emission limit of 0.15

IbsIMMBtu. Prior to October I, 2003 and October I, 2004, PSEG shall

estimate and acquire the amount of nERCs or allowances required for

such non-ozone season needed to comply with Section 22a-174-22(e)(3)

of the Regulations as follows:

Estimated DERCs (tons) = [Estimated fuel use in MNfBtu from October 1

through April 30 x (estimated seasonal NOx emission rate

, in IbslMMBtu during OctOber I through April 30 - (0.95

x 0.15 IbslMMBtu»J "" 2000 poundslton.

No later than May 31, 2004, and May I, 2005, PSEG shall calculate and

permanently retire DERCs used in the preceding non-ozone season as foIIows:

Actual DERCs (tons)::: [Actual fuel use in!v:lJvffiru from October 1 through

April 30 x (actual seasonal average NOx emission rate in

IbsIMMBtu during October I through April 30 - (0.95 x

0.15 IbsIMMBtu))] "" 2000 pounds/ton.

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b. When the non-ozone season CEM-recorded NOx emission rate is used to

calculate DERCs used by the boiler, PSEG shall include missing data

calculated in accordance wilh missing data substitution procedures under 40

CFRPart 75.

3. PSEG shall make and keep records for the boiler of: non-ozone season fuel use; nooozone season NOx emission rates, number of operating hours per non-ozone season, the

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PSEG Power Connecticut LLC Trading Agreement and

Order No. 8253

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1. Upon issuance of this Trading Agreement and Order, PSEG shall comply ith Section

22a~ 174-22 of the Regulations through emission reduction trading. U PSEG

achieves permanent compliaI)ce with the emission standard in Secti 22a-174-22(e) of

the Regulations or by May I, 2005, whichever occurs earlier:

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a. PSEG shall us€approved DERCs as required under t s Trading Agreement and

Order; and

b. PSEG shall have in its possession sufficient proved DERCs to meet applicable

NOx emission limits as allowed under this rading Agreement and Order.

2. DERC use. Staning on October I, 2003, and til May 1,2005, before the first day

of each non-ozone season, PSEG shall hay. in its possession sufficient aI?proved'

DERCs for the boiler based on the follo mg:

a. During the non-ozone seas

PSEG shall meet a noo-o one seasonal average '5"o.....ro.- I

IbslMMBtu. Prior to tober I, 2003 and Octoi f I-<.-<>-S e.

estimate and acquire e amount of DERCs ora: ~'.s. c {'"1' 9 i..,o.-./!

such non-ozone s on needed to comply with 0 C>----9 e. por 0 v....r \

of the Regulati s as follows: f''\ e..S "'" :

0.. e-c r 'if' r-- t-l'-<'- :

Estimated RCs (tons) = [Estimated fuel use i; S'c> v...fU2. • Th~S (vJ~J,.~

through April 30 x (estimaLcu :::.Ci1SUniiJ !'lUX erruSSlOn rate

in IbsfM:MBtu during October 1 through April 3@- (0.95

x 0.15 IbslMMBtu)J 7 2000 pounds/ton. ~~ p"--,,,,-~d

a later than May 31, 2004, and May 1,2005, PSEG shall calculate and

permanently retire DERCs used in the preceding non-ozone season as follows:

Actual DERCs (tons) = [Actual fuel use in MMBtu from October I through

April 30 x (actual seasonal average NOx emission rate in

IbslMMBtu during October I through April ~- (0.95 x

0.15IbslMMBtu)J 2000 pounds/ton.

~o.-Jd ~.os

b. When the non-ozone season CEM-recorded NOx emission rate is used to

calculate DERCs used by the boiler, PSEG shall include missing data

calculated in accordance with missing data substitution procedures under 40

CFR Pan 75.

3. PSEG shall make and keep records for the boiler of: non-ozone season fuel use; nonozone season NOx emission rates, number of operating hours per non-ozone season, the

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PSEG Power Connecticut LLC Trading Agreement and

Order No. 8253

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number of invalid data hours of the total operating hours per non-ozone season; the

number of DERCs in its possession, purchased and used (by serial number if assigned)

each non-ozone season in acco~dance with the appropriate emission rates and limits in

this Trading Agreement and Order. PSEG shall maintain and submit such records in

accordance with Section 2~a-174.22 of the Regulations.

4. Record Keepin2. PSEG shall retain records and supponing documentation as described

in this Trading Agreement and Order for a minimum of five years, commencing on the

date such records were created. PSEG shall provide the records specified above to the

Commissioner within thiny (30) days of receipt of a written request from the

Commissioner.

5. Reoortim!. No later than July 30 of every year after issuance of this Trading Agreement

and Order, PSEG shall submit in writing to the Commissioner the non-ozone season fuel

consumption and amount of all DERCs used (including serial numbers (if assigned) and

approved DERCs purchased from other facilities) for the boiler during the previous

October through April time period. These reports shall be on a form prescribed by the

Commissioner.

6. Allowance Use. Pursuant to Section 22a-174-22(d)(3) of the Regulations, PSEG may use

NOx allowances, pursuant to Section 22a-174-220) of the Regulations to achieve all or a

portion of the reductions required by Section 22a-174-22 of the Regulations. A:'1y

allowance used for compliance with Section 22a-174-22(e) of the Regulations shall be

subject to all restrictions and/or requirements applicable to DERCs contained in this

Trading Agreement and Order. Each allowance used for compliance with Section 22a174-22 of the Regulations shall be equivalent to one discrete emission reduction credit

and shall be deducted from PSEG's NOx Budget Program compliance account upon such

use. Allowances shall be considered used for compliance with Section 22a-174-22 of the

Regulations when they are transferred from the facility's compliance account or overdraft

account to a State of Connecticut NOx allowance retirement account, account ill

crOOOO000300 in the NOx Allowance Tracking System.

7. DEBe DoubliM. At a minimum, DERCs required shall be adjusted upwards by 100% if

DERCs are not in PSEG's possession for use prior to the first day of each month or

applicable season. However, based on the gravity of the noncompliance, the

Commissioner may require additional upward adjustment.

8. Vintage Restriction. For the purposes of compliance with Section 22a-174-22 of the

Regulations, DERCs/allowances shall only remain valid for five (5) calendar years from

the year of the generation/allocation of such DERCs/allowances. DERCs/allowances

generated/allocated more than five (5) calendar years ago are not valid for use for

compliance with Section 22a-174~22 of the Regulalions. Notwithstanding the above the

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, ..". PSEG Power Connecticut LLC Trading Agreement and

Order No. 8253

DERCs/aliowances generated/allocated prior to calendar year 2000 shall be valid for use

until December 31. 2004.

9. Extension. No later th::m May l~ 2005, with respect to the boiler, PSEG shall comply with

the requirements of Subdiv,ision 22a-174-22(d)(2) ofIhe Regulations. However, after full

program review of this and other Trading Agreements and Orders and, if determined to

be appropriate, the Coi'nmissioner may grant a written extension of this Trading

Agreement and Order.

10. Future Compliance Report. On or before September I, 2004. PSEG shall submit a report

indicating how the facility shall comply with Section 22a-174-22 of the Regulations with

respect to the boiler on and after.May 1, 2005.

11. Full compliance. PSEG shall not be considered in full compliance with this Tradirig

Agreement and Order until all actions required by this Trading Agreement and Order

have been 'completed as approved and to the Commissioner's satisfaction.

12. Approvals. PSEG shall use best efforts to submit to the Commissioner all documents

required by this Trading Agreement and Order in a complete and approvable fonn. If the

Commissioner notifies PSEG that any document or other action is deficient, and does not

approve it with conditions or modifications, it is deemed disapproved, and PSEG shall

correct the deficiencies and resubmit it within the time specified by the Commissioner or,

if no time is specified by the Commissioner, within 30 days of the Commissioner's notice

of deficiencies. In approving any document or other action under this Trading Agreement

and Order, the Commissioner may approve the document or other action as submitted or

performed or with such conditibns or modifications as the Commissioner deems necessary

to carry out the purposes of this Trading Agreement and Order. Nothing in this paragraph

shall excuse noncompliance or delay.

13. Definitions. As used in this Trading Agreement and Order, "Approved DERCs" are those

for which the Commissioner has provided written authorization for use in compliance with

Section 22a-174-22 of the Regulations; "Commissioner" means the Commissioner or a

repres.entative of the Commissioner; "Non-ozone season" means the period from October

1 through April 30 in any given calendar year. The date of "issuance" of this Trading

Agreement and Order is the date the Trading Agreement and Order is deposited in the

U.S. mail or personally delivered., whichever is earlier.

14. Dates. The date of submission to the Commissioner of any document required by this

Trading Agreement and Order shall be the date such document is received by the

Commissioner. The date of any notice by the Commissioner under Trading Agreement

. __ and Order, including but not limited to notice of approval or disapproval of any document

or other action, shall be the date such notice is deposited in the U.S. mail or is personally

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PSEG Power Connecticut LLC Trading Agreement and

Order No. 8253

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delivered, whichever is earlier. Except as otherwise specified in this Trading Agreement

and Order, the word "day" as used in this Trading Agreement and Order means calendar

day. Any document or action which is required by this Trading Agreement and Order to

be submitted or performed by a.date which falls on a Saturday, Sunday or a Connecticut or

federal holiday shall be subJPined or performed by the next day which is not a Saturday,

Sunday or Connecticut or federal holiday. ,

IS. Certification of documents. Any document, including but not limited to any notice, which

is required to be submitted to the Corrunissioner under this Trading Agreement and Order

shall be signed by PSEG or, if PSEG is not an individual, by an individual who is an

authorized representative of PSEG, in accordance with Section 22a-174-2a(a) of the

Regulations of ConnecticUl State Agencies, and by the individual(s) responsible for

actually preparing such document, and each such individual shall certify in writing as

follows:

"I have personally examined and am familiar with the information submitted in

this document and all attachments thereto, and I certify, based on reasonable

investigation, including my inquiry of those individuals responsible for

obtaining the information, that the submitted information is true, accurate and

complete to the best of my knowledge and belief. I understand that any false

statement made in the submitted information is punishable as a criminal offense

under Section 53a-157b of the Connecticut General Statutes and any other

applicable law."

16. Noncompliance. This Trading Agreement and Order is a final order of the Commissioner

with respect to the matters addressed herein, and is nonappealable and immediately

enforceable. Failure to comply with this Trading Agreement and Order may subject

PSEG to an injunction and penalties.

17. False statements. Any false statement in any information submitted pursuant to this

Trading Agreement and Order is punishable as a criminal offense under Section 53a-157b

of the Connecticut General Statutes and any other applicable law.

18. Notice of transfer: liabilitv of PSEG. Until PSEG has fully complied with this Trading

Agreement and Order, PSEG shall notify the Commissioner in writing no later than 15

days after transferring all or any portion of the facility, the operations, the site or the

business which is the subject of this Trading Agreement and Order or after obtaining a

new mailing or location address. PSEG's obligations under this Trading Agreement and

Order shall not be affected by the passage of title to any property to any other person or

municipality.

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PSEG Power Connecticut liC Trading Agreement and

Order No. 8253

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19. Commissioner's powers. Nothing in this Trading Agreement and Order shall affect the

Commissioner's authority to institute any proceeding or take any other action to prevent or

abate violations of law, prevent or abate pollution, recover costs and natural resource

damages, and to impose penalti~s for past, present, or future violations of Jaw. If at any

time the Commissioner dete,nnines that the actions taken by PSEG pursuant to this

Trading Agreement and Order have not successfully corrected all violations, fully

characterized the extentor degree of any pollution, or successfully abated or prevented

pollution, the Commissioner may institute any proceeding to require PSEG to undenake

funher investigation or funher action to prevent or abate violations or pollution.

20. PSEG's obIi!2:ations under law. Nothing in this Trading Agreement and Order shall relieve

PSEG of other obligations under applicable federal, state and local law.

21. No assurance bv Commissioner. No provision of this Trading Agreement and Order and

no action or inaction by the Commissioner shall be construed to constitute an assurance

by the Commissioner that the actions taken by PSEG pursuant to this Trading Agreement

and Order will result in compliance or prevent or abate pollution.

22. Access to facility. Any representative of the Depanment of Environmental Protection

may enter the facility without prior notice for the purposes of monitoring and enforcing

the actions required or allowed by this Trading Agreement and Order.

23. No effect on ri!2:hts of other persons. This Trading Agreement and Order neither creates

nor affects any rights of person's or municipalities that are not parties to this Trading

Agreement and Order.

24. NQ Creation of Propeny Rights. This Trading Agreement and Order does not create any

propeny rights with respect to these DERCs.

25. Notice tQ Commissioner of chan!2:es. Within 15 days of the date PSEG becomes aware of

a change in any information submined to the Commissioner under this Trading

Agreement and Order, or that any such information was inaccurate or misleading or that

any relevant information was omitted, PSEG shall submit the correct or omitted

information to the Commissioner.

26. Notification of noncompliance. In the event that PSEG becomes aware that it did not or

may not comply, or did not or may not comply on time, with any requirement of [his

Trading Agreement and Order or of any document required hereunder, PSEG shall

immediately notify by telephone the individual identified in the next paragraph and shall

take all reasonable steps [0 ensure that any noncompliance or delay is avoided or, if

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PSEG Power Connecticut LLC Trading Agreement and

Order No. 8253

unavoidable, is minimized to the greatest extent possible. Within five (5) dllYS of the

initial notice, PSEG shall submit in writing the date, time, and duration of the

noncompliance and the reasons for lhe noncompliance or delay and propose, for the

review and written approval of the Commissioner, d:nes by which compliance will be

achieved, and PSEG shall c\=Imply with any dates which may be approved in writing by

the Commissioner. Notification by PSEG shall not excuse noncompliance or delay, and

the Commissioner's apP~oval of any compliance dates proposed shall not excuse

noncompliance or delay unless specifically so stated by the Commissioner in writing.

27. Submission of documents. Any document required to be submitted to the Commissioner

under this Trading Agreement and Order shall. unless otherwise specified in this Trading

Agreement and Order or in writing by the Corrunissioner. be directed to:

Ms. Wendy Jacobs

Department of Environmental Protection

Bureau of Air Management

Emissions and Credit Trading Section

79 Elm Street

Hartford, Connecticut 06106-5127

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PSEG Power Connecticut LLC Trading Agreement and

Order No. 8253

PSEG consents to the issuance of this Trading Agreement and Order without further nolice. The

undersigned certifies that he/she is fully authorized to enter into this Trading Agreement and Order

and to legally bind PSEG to the term~ and conditions of the Trading Agreement and Order.

Signature:

PSEG Powu Connecticut LLC

~(;,2Rl Name: Robert T. Parnell

Title: Director of Asset Operations

Date: _J_u_l"-y_l_7...;,'-2_0_03 _

/ / . ~rJ. Rocque, IT.

,rSSioner

,2003

Issued as a final order of the Commissioner of Environmental Protection

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CITY OF BRIDGEPORT LAND RECORDS

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MAILED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

Certified Document No.

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