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 ORDER MODIFICATION

In the matter of a Trading Agreement and Order between the Commissioner of Environmental

Protection ("Commissioner") and Devon Power LLC ("DP").

WHEREAS, the Commissioner and DP, having agreed to the tenns and conditions set forth in

Trading Agreement and Order No. 8251 issued on September 15, 2003, and a Modification

thereto issued on March 21, 2005, do now, by mutual agreement, modify Trading Agreement and

Order No. 8251 as follows:

I. Delete the date May I, 2005, and substitute therefor May 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 of each non-ozone season, DP shall have in its possession sufficient approved

DERCs for the turbines based on the following:

a. During the non-ozone season:

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

Ibs/MMBtu. Prior to October I, 2006, October I, 2007, and October 1, 2008,

DP shall estimate and acquire the amount of DERCs 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('r
Devon Power LLC 2 Trading Agreement and Order

No. 8251 Modification No.2

No later than May 31 of2007, 2008, and 2009, when the turbines have a nonozone seasonal average actual NOx emission rate .exceeding 0.15 IbslMMBtu, DP

shall calculate and permanently retire the amount of 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 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 under 40

CFR Part 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 a portion 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/or requirements 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

or use an existing compliance account or overdraft 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 or the 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 prior to the first day of each
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Devon Power LLC 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 authority to institute any proceeding or take any other

action to require additional upward adjustment, based on the gravity of any

alleged noncompliance or violation of law. DP shall permanently retire the

quantity ofDERCs equivalent to 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 Commissioner in accordance with

paragraph C.26. ofthe Trading Agreement and Order.

5. Delete paragraph C.9. and substitute the following therefor:

Extension. No later than May I, 2009 with respect to the turbines, DP shall

comply with the requirements of Section 22a-174-22(d)(2)(A) ofthe Regulations.

There is no assurance that the Commissioner will grant a written extension of

this Trading Agreement and Order.

6. Delete paragraph C.I O. and substitute the following therefor:

Future Compliance Report. On or before 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 comply with

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, "Approved DERCs"

are those for which the Commissioner has provided written authorization for use

in compliance with Section 22a-174-22 ofthe Regulations; "Commissioner"

means the Commissioner or 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 or personally

delivered, whichever is earlier. The date ofsubmission to the Commissioner of

any document required by this Trading Agreement and Order shall be the date s

such document is received by the Commissioner. The date of any notice by the

Commissioner under this Trading Agreement and Order, including but not limited
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Devon Power LLC 4 Trading Agreement and Order

No. 8251 Modification No.2

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 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 submitted or performed by the next day

which is not a Saturday, Sunday, or Connecticut or federal holiday.

9. Delete the word "individual" and substitute therefor the word "Section" in

paragraph C.26.

10. Delete the name "Ms. Wendy Jacobs" from paragraph C.27.

All other terms and conditions ofTrading Agreement and Order no. 8251 issued by the

Commissioner acting under Chapter 446c, Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a177 ofthe Connecticut General Statutes shall remain in effect.
Devon Power LLC 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 Power LLC

Signature:

Type Name:

Type Title:

Date:

[HorrJt}$ E. iJ41)(IC /L

nrmtr YVt!'h'IJ 11C6rL

loIJe)o(.

(l modification of an Order ofthe Commissioner ofEnvironmental Protection.

TOWN OF MILFORD LAND RECORDS

MAILED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

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