### ;)lAl..t- 

## V1" CVl'Il'IECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In 

### the manerof The State ofConnecticut and Dominion Nuclear Connecticut, Inc. ) ) ) ) ) Trading Agreement 

### and OrderNo. 8221 A



# ,

. 

## , Whereas, the CommissionerofEnvironmental Protection ("Commissioner") and Dominion Nuclear Connecticut, Inc. ("DNC") agree that 

### it is in the public interest that they work cooperatively to improve the airquality within the State ofConnecticut and that the use ofdiscrete emission reduction credit ("DERe") trading to reduce nitrogen oxide (''NOx'') emissions 

### will achieve this 

### result in atimely and cost-effective manner.

A. 

### At 

### the request and with 

### the agreement of0 C, the Commissionerfmds the following: I. 

### This Trading Agreement and Order supercedes Trading Agreement and Order 8221 issued on March 29, 2001. 

### 2. On orabout March 31, 2001, DNe acquired from NortheastNuclearEnergy Company (UNNECO") and now owns and operates the Millstone Power Station at Rope Ferry Road, Waterford, Connecticut ("facility"). 

### 3. At the facility, DNC operates fuel burning equipment consisting oftwo Fairbanks Morse 38TD 1/8 emergency diesel generators for Unit 2 ("EUs 2.3 and 2.4"), two 

### Colt PC2 emergency diesel generators for Unit 3 (''EUs 2.5 and 2.6"), one Electromotive station plackout diesel generator for Unit 3 ("EU 

### 2.1'1 and one 

### Cummins VTI710 

### GS/GC emergency engine forplant security ("EU 2.10"). EUs 2.3, 2.4, 2.5, 2.6, 2.7 and 2.10 provide electricity to the three nuclearreactors' operating equipment when nonnal elecnicity is unavailable. 4. Due to the Nuclear Regulatory Commission ("NRC") requirements for emergency generatorreadiness, DNC may be required, 

### in the future, to perfonn scheduled 

### testing ofEUs 2.3, 2.4, 2.5, 2.6, 2.7 and 2.10 on days for which the Commissioner has forecast that ozone levels 

### will be "moderate to unhealthful", "unhealthful" or 

### "veryunhealthful". Due to the NRC testing requirement EUs 2.3, 2.4, 2.5, 2.6, 2.7 and 2.10 are subject to Section 22a-174-22 ofthe Regulations ofConnecticut State Agencies ("Regulations") pertaining to the control ofNOx emissions. 5. Emission testing performed on the dates indicated in Table I, resulted 

### in a NOx emission rates as follows:

(Printed on Recycled P.per) 79 Elm Slreet • Hm[old, CT 06106.5127 hllp:lfdep.5Ulc.CI.U5

...." Equll/ OPPOTll""ily E",ploytrDominion Nuclear Connecticut, Inc. 2 Trading Agreement and Order 8221A
Table I DNC FLER and NOx "Uowable Emission Rates 

## - . Facilityl Fuel Manufacturer's Stack Test FLER Allowable Last Next Peaking Unit rating (gmlbhptbr) (gmibhptbr) Rate Emission EmissionTe bhp gmlbhptbr Test stDue EU 2.3 (U2A\ Diesel 3825 10 10.96 8 1219198 1219/3 EU 2.4 (U2B) Diesel 3992

" 9 10.0 8 12/23/98 12/23/03 EU 2.5 (U3A) Diesel 6941'-, 6.55 N/A 8 lI/17/98 11117/03 EU 2.6 (U3B) Diesel 6941 6.55 N/A 8 1/26199 1/26104 EU 2.7 (SBO) Diesel 3400 13.0 14.3 8 1/20199 

### I 1/20104 EU2.l0(SEC Diesel 620 10.46 11.6 8 12110/98 12110/03 6. DNC exceeds the NOx allowable emission rate for the four (4) emergency generators EUs 2.3, 2.4, 2.7 and 2.10 specified 

### in Sectinn 22a-174-22(e) nfthe Regulations as shown 

### in table 1 ofthis Trading Agreement and Order.


# o 7. Pursuant to the Depanment ofEnvironmental Protection's 

### "Credit Trading/or Sources with IrregularNOxEmissions"policy, with arevised date ofFebruary 27, 2001, attached hereto and incorporatedbyreference into this Trading Agreement and Order as Exhibit I, the four (4) emergency generators EUs 2.3, 2.4, 2.7 and 2.10 have peak daily NOx emissions greaterthan three times the average daily emissions during the ozone season and are therefore considered sources with irregular NOx emissions. 8. Pursuanl to Section 22a-174-22(j) ofthe Regulations, DNC intends to acquire approved DERCs to offset excess NOx emissions from the four emergency generators EUs 2.3. 2.4. 2.7 and 2.10. until April 30. 2007. 9. The Commissioner, in accordance with the provisions ofSection 22a-174-220) of the Regulations, aUows the use ofpreviously approved unused NOx DERCs referenced in Table 2 ofthis Trading Agreement and Order. These DERCs are subjectto the vintage restrictions ofthis Trading Agreement and Order. Dates after which the unused DERCs will no longerbe eligible for use as aresult ofthe vintage restrictions are provided 

### in Table 2 ofthis Trading Agreement and Orderin the expiration date column. Table 2



### .- - I , 

# .. ,- Previously Approved DERCS (to the extent not already used) Yearof Ozone season NOx DERC Ozone Non-ozone season NOx Non- Expiration Generation serial number season DERC serial number ozone Date NOx season DERC, NOx DERC Pre·2000 

### I N/A 76 N/A 3 

### I 12131/04

### Dominion Nuclear Connecticut, Inc. 3 

### Trading Agreement and Order 8221A


### B. The Commissioner, in accordance with the provisions ofthis 

### Trading Agreement and Order, and pursuant to Section 22a-174-22(j) ofthe Regulations, hereby allows DNC to comply with Section 22a-174-22 ofthe Regulations through use ofDERC trading. 

### C. With the agreement ofDNC, the Commissioner, acting under Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a-l77 ofthe Connecticut General Statutes, orders DNC as 

### follows: r I. 

### Upon issuance of

### this Trading Agreement and Order. at the facility, DNC shall 

### comply with

### S~tion 22a-174-22 ofthe 

### Regulations through DERC trading. Until DNC achieves pennanent compliance with the emission standard in Section 22a174-22(e) ofthe Regulations orby April 30, 2007, whichever occurs earlier:

a. DNC shall use approved DERCs as required underthis Trading Agreement and 

### Order; b. DNC shall have in 

### its possessionsufficient approved DERCs to meet applicable NOx emission limits as allowed underthis TradingAgreement and Order; and

c. DNC shall comply during operation ofthe EUs 2.3, 2.4, 2.7 and 2.10 with the FLERS shown in Table 1 ofthis Trading Agreement and Order.



### , I**\~** . 

### 2. DERC use
a. Until April 30, 2007, before the first day ofeach month, DNC shall have in its 

### possession sufficient approved DERCs for such month, based on the following calculations. Before**th~** 

### first day ofeachmonth, DNe shall estimate DERCs required for such month for EUs 2.3, 2.4, 2.7 and 2.10 as follows. i. At all times (mass calculation): 

### Estimated DERCs (in tons) = 

### [maximum estimatedhours ofoperation x maximum bhp rating x (FLER

- (0.95 x NOx Allowable limit)) x (1 pound/454g)) + 

### 2000 pounds/ton 

### Where: -Allowable limit = 

### in grtl/bhplhr as shown in Table I ofthis Trading



### Agreement and Order.

- FLER full load emissionrate in grtl/bhplhr as shown in Table 1 of this

Trading Agreement and Order.

- Discount (.95)**.~** 

### %5 design margin applied to the allowable limit.

### Dominion Nuclear Connecticut, Inc. 

# , Trading Agreement and Order8221A



# . '- 3. 11. 

### During the ozone season only (peak day calculation): The maximum actual excess NOx emissions (in lbs) on any ofthe 

### days projected by the Commissioner to be "moderate to unhealthful", "unhealthful" or "veryunhealthful" divided by 3and then divided by 13 (with the result in tons): DERCs (iIlJons) = [(Maximwn excess NOx in Ibs).;. 3J.;. [13 Ibslday/ton] , b. No later than October 30 of2003, 2004, 2005, and 2006 calculate and 

### pennanently retire the DERCs used in 

### the precedingozone season as the greater of:

1. 

### the actual total excess emissions for the ozone season in tons, as follows: DERCs (in tons) [actual hours operated x maximum bhp rating x (FLER- (0.95 x NOx Allowable limit)) x (l pound/454g)] .;. 2000 poundslton OR
11. 

### the maximum actual excess NOx emissions (in lbs) on any ofthe 

### days projectedby the Commissionerto be "moderateto unhealthful", "unhealthful", or "veryunhealthful", divided by 3 and then divided by 13 (with the result in tons): DERCs (in tons) = [(Maximum excess NOx in Ibs).;. 3].;. 13 lbsldayiton] 

### As described in 

### Exhibit 1ofthis 

### Trading Agreement and Order, to the extent that DERCs used to offset on peak day basis (method ii) exceed the total 

### mass excess emissions (method i). remaining DERCs may be used in the nonozone season in 

### the same orsubsequent years through April 30, 2007. DNC shall make and keep records of: dailyhours ofoperation; excess NOx 

### emissions; the numberofDERCs in its possession. created, purchased and used (by serial numberifassigned) each month 

### in accordance with the appropriate emission rates and limits in this TradingAgreement and Order; the numberofDERCs used during the ozone season and non-ozone season (the remainderofthe year); during the ozone season, the ozone classification as forecasted by the Commissioner on the previous day; as well as documentation anesting to the fact that approved DERCs

. used during the ozone season were generated during the ozone season. Generator certification ofthis fact shall be sufficient. DNC shall maintain and submit such records to the Commissionerin accordance with Section 22a-174-22 ofthe 

### Regulations.Dominion Nuclear Connecticut, Inc. 5 Trading Agreement and Order 8221A

4. Record KeepinQ:. DNC shall retain records and supporting documentation as described in this Trading Agreement and Order for a minimum offive years, commencing on the date such records were created. DNC shall provide the records specified above to the Commissioner within thirty (30) days ofreceipt ofa written request from the Commissioner. 5. Armual Emission'Statement. No laterthan March 1 ofevery year after issuance of this Trading Agreement and Order, DNC shall include with the Annual Emission Statementprovided to the Commissioner, arecord ofeach sale or othertransfer, and use ofany and all ofthe DERCs approved within and subsequent to issuance ofthis Trading Agreement and Order until all such DERCs have been used or are no longer in DNC's possession. DNC shall also include actual NOx emissions from the peaking units and the amount ofall DERCs used (including serial numbers (if assigned) and approved DERCs generated and/or purchased from other facilities), generated and/or approved for the previous calendar year. These repons shall be on aform prescribed by the Commissioner and shall be 

### in monthly increments. Should DNC choose to discontinue the generation ofDERCs, DNC will notifythe Commissionerupon discontinuance. 

### 6. Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, DNC may use NOx allowances, through April 30, 2007, pursuant to Section 22a-174-220) of the Regulations to achieve all or aportion ofthe reductions required by Section 22a174-22 ofthe Regulations. Any allowance used for compliance with Section 22a174-22(e) ofthe Regulations shall be subjectto all restrictions and/orrequirements applicable to DERCs contained in this Trading Agreement and Order;

a. 

### In order for DNC to use NOx allowances, DNC shall create a general 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 to the CT State NOx Retirement**A~count** (Account ill CT0000000300 in the NATS). 7. DERC Doubling. At aminimum, DERCs required shall be adjustedupwards by 100% ifDERCs are not in DNC's possession for use priorto the first day ofeach month. Howeverbased on the gravity ofthe noncompliance, the Commissionermay require additional upwards adjustment. 

### 8. Vintage Restriction. Forthe purposes ofcompliance with Section 22a-174-22 ofthe Regulations, DERCs/allowances shall only remain valid for five (5) calendar years from the year ofthe generation/allocation ofsuch DERCs/allowances.

### Dominion Nuclear Connecticut, Inc. 6 

### Trading Agreement and Order 822lA



### 9.

10. DERCsiaIlowances olderthan five (5) calendaryears from their creation/allocation are not valid for use for compliance with Section 222.·174-22 ofthe Regulations. Notwithstanding the above, DERCsiallowances generated/allocated prior to calendar year 2000 are valid for use for compliance with Section 22a-174·22 ofthe Regulations up to and includingDecember 31,2004. FLERExceedance. Noncompliance with an established FLER shall subject DNC to make restitution by matching the quantity ofemissions ("true up") caused by the exceedance plus a 100% premium. The true up in tons ofDERCs shall be equal to the FLER exceedance in gmlbhplhr, multiplied by the total hours operated during the period ofnoncompliance, mUltiplied bythe HP rating, divided by454 grams/lb, divided by2000 Ibslton. Ifthe period ofnoncompliance is not known, the time period from the completion ofthe last/previous Department witnessed emission test through the date the FLER compliance is achieved as approved by the Commissioner shall be used. However, nothing in this Trading Agreement and Order shall affect the Commissioner's authority to institute anyproceeding ortake any other action to require additional upward adjustment,. based on the gravity ofany alleged noncompliance orviolation oflaw. FLER Modification. FLERs set forth in Table I 

### ofthis Trading Agreement and Ordermaybe modified only afterthe consent ofthe Commissionerbywritten modification ofthis Trading Agreement and Order. 11. Emissions Testing. Pursuant to Section 22a-174-22(k) ofthe Regulations, DNC shall conductNOx emission tests ofeach emergency generatorEUs 2.3, 2.4, 2.5, 2.6, 2.7 and 2.10 at leastno laterthan once every five years from the dates ofthe last NOx emission tests forthe emergency generators EUs 2.3, 2.4, 2.5, 2.6, 2.7 and 2.10 as provided in Table I oftms Trading Agreement and Order. 12. Extension. No laterthan May 1,2007, with respect to the EUs 2.3, 2.4, 2.7 and 2.10, DNC shall complywith the requirements ofSection 22a-174-22(d)(I) ofthe Regulations. However, afterfull programreview ofthis and otherTrading Agreements and Orders and, ifdetennined to be appropriate, the Commissionermay grant awritten extension ofthis Trading Agreement and Order. 13. Future Compliance Report. On 

### orbefore September I, 2006, DNC shall submit a report indicating bow the facility shall complywith section 22a-174-22 ofthe Regulations with respect to the Peaking units on and afterMay I, 2007. 14. Full compliance. DNC shall not be considered in full compliance with this Trading Agreemen£ and Order until all actions required by this Trading Agreement and Order have been completed as approved and to the Commissioner's satisfaction.

### Dominion Nuclear Connecticut, Inc. 7 

### Trading Agreement and Order 822IA
15. Approvals. DNC shall use best efforts to submit to the Commissioner all documents required by this Trading Agreement and Order in acomplete and approvable form. Ifthe Commissionernotifies DNC that any document or other action is deficient, and does not approve it with conditions ormodifications, it is deemed disapproved, and DNC shall correct the deficiencies and resubmit it within the time specified by the Commissioneror, ifno time is specified by the Commissioner, within 30 days ofthe Commissioner\.nbtice ofdeficiencies. In approving any document or other action under this Trading Agreement and Order, the Commissionermay approve the document or other action 

### as submitted orperformed or with such conditions or modifications as the Commissionerdeems necessary to carry out the purposes ofthis Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance or delay. 16. Definitions. As used in this Trading Agreement and Order, "Commissioner" means the CommissionerofEnvironmental Protection or an agent ofthe Commissioner. "Ozone season" means the period from May 1 through September 30 in any given calendaryear. The date of"issuance" ofthis Trading Agreement and Orderis the date the Trading Agreement and Orderis deposited in the U.S. mail orpersonally delivered, whicheveris earlier.

c .

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## .... -,. 

### 17.

18. 

### Dates. The date ofsubmission to the Commissionerofany documentrequired by this Trading Agreement and Ordershall be the date such documentis received by the Commissioner. The date ofany notice by the Commissionerunder this Trading Agreement and Order, includingbutnot limited to notice ofapproval or disapproval ofany document or other action, shall be the date such notice is deposited in the U.S. mail oris personally delivered, whicheveris 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 orperformed by a date which falls on a Saturday, Sunday or aConnecticut orfederal holiday shall be submitted orperformedby the next day which is not a Saturday, Sunday or Connecticut or federal holiday. Certification ofdocuments. Any docwnent, including butnot limited to any notice, which is required to be submitted. to the Commissionerunder this Trading Agreement and Order shall be signed byDNC or, ifDNC is not an individual, by an individual who is an authorized representative ofDNC, in accordance with Section 22a-174-2a(a) ofthe Regulations ofConnecticut State Agencies, and 

### bythe individual(s) responsible for actuallypreparing such document, and each such individual shall certify in writing as follows; "I have personally examined and am familiar with the infonnation submitted in this document and all attachments thereto, and I certify, based on reasonable investigation, including my inquiry ofthose individuals responsible for obtaining the infonnation, that the submitted information is true, accurate and complete to the tiestDominion Nuclear Connecticut, Inc. 8 

### Trading Agreement and Order 8221A

:;

### .. ofmy knowledge and belief. I understand that any false statement made in the submitted information is punishable as a criminal offense under §53a-157b ofthe Connecticut General Statutes and any other applicable law." 19. Noncompliance. This Trading Agreement and Orderis a final order ofthe Commissioner with respect 10 the maners addressed herein, and is nonappealable and immediately enforceable. Failure to comply with this Trading Agreement and Order may subject DNC to an injunction and penalties. 20. False statements. Any false statement in any infonnation submitted pursuant to this Trading Agreement and Orderis punishable as a criminal offense under Section 53a· l57b ofthe Connecticut General Statutes and any other applicable law. 

### 21. Notice oftransfer: liability ofDNC and others. Until DNC has fully complied with this Trading Agreement and Order, DNC shall DOtifythe Commissionerin writing no laterthan fifteen (15) days after transferring all or anyportion ofany Dfthe facilities, the operations, the sites or the businesses which are the subject ofthis Trading Agreement and Order or after obtaining anew mailing or location addresses. DNC's obligations under this Trading Agreement and Order shall notbe affected bythe passage oftitle to anyproperty to any otherperson ormunicipality. 

# o 22. 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 oflaw, prevent or abate pollution, recover costs and narural resource damages, and to impose penalties forpast, present, orfuture violations oflaw. 

### Ifat any time the Commissionerdetermines that the actions taken by ONC pursuant to this Trading Agreement and Orderhave successfully corrected all violations, fully characterized the extent ordegree ofanypollution, or successfully abated orprevented pollution, the Commissionermay institute any proceeding to require ONC to undertake further investigation or further action to prevent or abate violations orpollution. 23. DNC's obligations under law. Nothing in this Trading Agreement and Order shall 

### relieve DNC ofother obligatioDs under applicable federal, state and local law. 24. NQ assurance bv Commissioner. No provision ofthis Trading Agreement and Order and no action orinaction by the Commissioner shall be construed to constitute an assurance bythe Commissionerthat the actions taken by ONC pursuant to this Trading Agreement and Orderwill result in compliance orprevent or abate pollution. 

### 25. Access to facility. Any representative ofthe Depamnent ofEnvironmental Protection may enter any ofthese facilities without priornotice for the purposes of monitoring and enforcing the actions required or allowed by this Trading Agreement 

### and Order.Dominion Nuclear Connecticut, Inc. 9 Trading Agreement and Order 8221A



# ,

......... 26. No effect on riehts ofotherpersons. This Trading Agreement and Order neither creates nor affects any rights ofpersons or municipalities that are not parties to this Trading Agreement and Order. 27. 0 Creation ofPropenv Rights. This Trading Agreement and Order does not create any propertyrights with respect to these DERCs

.



### ., ' 28. Notice to Commissioner ofchanees. Within fifteen (15) days ofthe date DNC becomes aware ofachange in any information submitted to the Commissionerunder this Trading Agreement and Order, orthat any such information was inaccurate or misleading orthat any relevant information was omitted, DNC shall submit the correct or omitted information to the Commissioner. 29. Notification ofnoncompliance. 

### In the event that DNC becomes aware that it did not or may not comply, or did not or may not comply on time, 

### with any requirement of this Trading Agreement and Order or ofany document required hereunder, DNC shall immediatelynotify by telephone the individual identified in the next paragraph and shall take all reasonable steps to ensure that anynoncompliance or delay is avoided or, ifunavoidable. is minimized to the greatest extentpossible. Within five (5) days ofthe initial notice, DNC shall submit in writing the date, time, and duration ofthe noncompliance and the reasons for the noncompliance or delay and propose, for the review and wrinen approval ofthe Commissioner, dates bywhich compliance will be achieved, and DNC shall comply with any dates which maybe approved in writing bythe Commissioner. Notification byDNC shall not excuse noncompliance or delay, and the Commissioner's approval ofany compliance dates proposed shall not excuse noncompliance or delayunless specifically so statedby the Commissionerin writing. 

### 30. Submission ofdocuments. Any document required to be submitted to the Commissionerunder this Trading Agreement and Order shall, unless othenvise specified 

### in this Trading Agreement and Order orin writing by the Commissioner, be directed to: Mrs. ElizabethMcAuliffe Department ofEnvironmental Protection Bureau of

### Air Management Compliance and Field Operations Division Emissions and Credit Trading Section 79 Elm Street Hartford, CT 06106Dominion Nuclear Connecticut, Inc. 10 Trading Agreement and Order 822lA

DNC consents to the issuance ofthis Trading Agreement and Order without funher notice. The undersigned certifies that he/she is fully authorized to enter into this Trading Agreement and Order and to legally bind DNC to the tenns and conditions ofthe Trading Agreement and Order.
Dominion Nuclear Connecticut, Inc

. 

## • Signature: Name: 

### Title: Date:

Issued as a final orderofthe CommissionerofEnvironmental Protection 

# J 'on

# ~J2 f. 2003.

CITY OF WATERFORD LAND RECORDS MAILED CERTIF.IED M.AlL, RETURN RECEll'T REQUESTED Certified Document No.

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