# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

STATE OF CONNECTICUT AND DEVON POWER LLC TRADING AGREEMENT AND ORDER NO. 8251 MODIFICAnON NO.2

TRADING AGREEMENT AND ORDERMODIFICATION In the matter ofa Trading Agreement and Orderbetween the CommissionerofEnvironmental Protection ("Commissioner") and Devon PowerLLC ("DP"). WHEREAS, the Commissioner and DP, having agreed to the tenns and conditions set forth in Trading Agreement and OrderNo. 8251 issued on September 15, 2003, and aModification thereto issued on March 21, 2005, do now, by mutual agreement, modifyTrading Agreement and OrderNo. 8251 as follows: I. Delete the date May I, 2005, and substitute thereforMay 1,2009, in paragraphs A.4. and C.1. 2. Delete paragraph C.2. and substitute the following therefor: DERC use. Starting on October 1,2004, and until May 1,2009, before the first day ofeach non-ozone season, DP shall have in its possession sufficient approved DERCs for the turbines basedon the following:

a. During the non-ozone season: DP shall meet anon-ozone seasonal average emission limit of0.15 Ibs/MMBtu. Priorto October I, 2006, October I, 2007, and October 1, 2008, DP shall estimate and acquire the amount ofDERCs 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 MMBtu from October I through April 30 x (estimated seasonal average NOx emission rate in Ibs/MMBtu during October 1 through April 30

- (0.95 x 0.15 Ibs/MMBtu))] "i2000 pounds/ton.

( Printed on Recycled Paper) 79 Elm Street • Hlmford. CT 06106 - 5127 All Equal OpporlUllily Emp/oy('rDevon Power LLC 

### 2 Trading Agreement and Order No. 8251 Modification No.2 No laterthan May 31 of2007, 2008, and 2009, when the turbines have anonozone seasonal average actual NOx emission rate.exceeding 0.15 IbslMMBtu, DP shall calculate and permanentlyretire the amount ofDERCs 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 30

- (0.95 x 0.15 IbsIMMBtu))] + 2000 pounds/ton. b. When the non-ozone season CEM-recorded NOx emission rate is used to calculate DERCs used by the turbines, DP shall include missing data calculated in accordance with missing data substitution procedures under40 CFRPart 75.

c. DP shall not exceed any NOx permit limitations for the turbines. 3. Delete paragraph C.6. and substitute the following therefor: Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, DP may use NOx allowances, until May 1,2009, for the peaking unit pursuant to Section 22a-174-22(j) ofthe Regulations to achieve all or aportion ofthe reductions required by Section 22a-174-22 ofthe Regulations. Any allowance used for compliance with Section 22a-174-22(e) ofthe Regulations shall be subject to all restrictions and/orrequirements applicable to DERCs contained in this Trading Agreement and Order;

a. In order for DP to use NOx allowances, DP shall create a general account oruse an existing compliance account oroverdraft account in EPA's NOx Allowance Tracking System ("NATS"); and b. Each allowance used for compliance with Section 22a-174-22 ofthe Regulations shall be equivalent to one discrete emission reduction credit. Allowances shall be considered used for compliance with Section 22a-174-22 ofthe Regulations when they are transferred from the facility's NOx general account in the NATS orthe facility's NOx compliance account in the NATS to the CT State NOx Retirement Account (Account ID CT0000000300 in the NATS). 4. Delete paragraph C.7. and substitute the following therefor: DERC Shortfall. At a minimum, DERCs required shall be adjusted upwards by 100% ifDERCs are not in DP's possession for use priorto the first day ofeach**,-~.** 

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Devon PowerLLC 3 Trading Agreement and Order No. 8251 Modification NO.2

non-ozone season. However, nothing in this Trading Agreement and Order shall affect the Commissioner's authorityto institute anyproceeding ortake any other action to require additional upward adjustment, based on the gravity ofany alleged noncompliance orviolation oflaw. DP shall permanently retire the quantity ofDERCs equivalentto the excess emissions plus a 100% premium within (60) days ofDP's discovery ofthe DERC shortfall. DP shall certify and report any such DERC retirement to the Commissionerin accordance with paragraph C.26. ofthe Trading Agreement and Order. 5. Delete paragraph C.9. and substitute the following therefor: Extension. No laterthan May I, 2009 with respect to the turbines, DP shall comply with the requirements ofSection 22a-174-22(d)(2)(A) ofthe Regulations. There is no assurance that the Commissionerwill grant awritten extension of this Trading Agreement and Order. 6. Delete paragraph C.IO. and substitute the following therefor: Future Compliance Report. On orbefore September I, 2008, DP shall submit a report in writing to the Commissioner, as directed in paragraph C.27. ofthis Trading Agreement and Order, indicating how the facility shall complywith Section 22a-174-22 ofthe Regulations with respect to the turbines on and after May I, 2009. 7. Delete paragraph C.l3. and substitute the following therefor: Definitions. As used in this Trading Agreement and Order, "ApprovedDERCs" are those for which the Commissionerhas provided written authorization for use in compliance with Section 22a-174-22 ofthe Regulations; "Commissioner" means the Commissioneror a representative ofthe Commissioner; "Non-ozone season" means the period from October I through April 30 in any given calendar year. 8. Delete paragraph C.14. and substitute the following therefor: Dates. The date of"issuance" ofthis Trading Agreement and Order is the date the Trading Agreement and Order is deposited in the U.S. mail orpersonally delivered, whichever is earlier. The date ofsubmission to the Commissionerof any document required by this Trading Agreement and Order shall be the date s such document is received by the Commissioner. The date ofany notice by the Commissionerunder this Trading Agreement and Order, including butnot limited

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Devon Power LLC 4 Trading Agreement and Order No. 8251 Modification No.2 to notice ofapproval ordisapproval ofany document orother action, shall be the date such notice is deposited in the U.S. mail oris personallydelivered, whichever is earlier. Except as otherwise specified in this Trading Agreement and Order, the word "day" as used in this Trading Agreement and Ordermeans calendarday. Any document or action which is required by this Trading Agreement and Orderto be submitted orperformedby adate which falls on a Saturday, Sundayor a Connecticut or federal holiday shall be submitted orperformedby the next day which is not a Saturday, Sunday, orConnecticut or federal holiday. 9. Delete the word "individual" and substitute thereforthe word "Section" in paragraph C.26. 10. Delete the name "Ms. Wendy Jacobs" from paragraph C.27. All otherterms and conditions ofTrading Agreement and Orderno. 8251 issued bythe Commissioner acting under Chapter446c, Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a177 ofthe Connecticut General Statutes shall remain in effect.Devon PowerLLC 5 Trading Agreement and Order No. 8251 Modification No.2 DP hereby consents to the entry ofthis modification to the Trading Agreement and Order without further notice. Devon PowerLLC Signature: Type Name: Type Title: Date: [HorrJt}$ 

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(l modification ofan Orderofthe CommissionerofEnvironmental Protection.

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