### ~~~ 

# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of The State ofConnecticut and CityofNorwich Department ofPublic Utilities " ) 

### ) ) ) ) Trading Agreement and Order No. 8119A

Whereas, the Commissioner ofEnviromnental Protection ("Commissioner") and 

### City of

### NOrwlCh Department ofPublic Utilities ("Norwich") agree that 

### it is 

### in the public interest that they work cooperatively to improve the 

### air quality within the State ofConnecticut and that the use ofdiscrete emission reduction credit C"DERC") trading to reduce nitrogen oxide 

### (''NOX') emissions will achieve this result in atimely and cost-effective manner:

A. At the request and with theagreement of'Korwich, the Commissioner finds the following:

". I. This Trading Agreement and Order supercedes Trading Agreement and Order 8119 issued on March 4,1996, and Trading Agreement and Order 8119 Modification issued April 29, 1999. 2. NOIWich is a municipal corporation operating an electric generation and distribution utilityplant at 16 South Golden Street, Norwich, CT ("facility"). 3. At the facility, NOIWich operates one piece offuel burning equipment, consisting of acombustion turbine ("peaking unit"), which is subject to Subsection 22a-174-22 of the Regulations ofConnecticut State Agencies ("Regulations"). 4. Emission testing perfonned on the dates indicated in Table I, resulted in a NOx emission rates as follows:

Tahle I 

### NOx Emission Rates in IbstM:MBtu Peaking Unit Fuel Heat Input Stack Test 

### FUR Allowable Date of Next Stack 

### MMBtuIhr (ppmvd) IbsIMMBru Rate Stack Test Test Due IbsIMMBru Rolls Royce #2 oil 249 135.5 0.620 0.29 12122199 

### I 12122104

(Prilllcd on Recycled Papel) 79 Elm SUCCI • Hanford, CT 06106·5127 tIlLp:lJd'p.StaI••CI. us All Eq;.al OpporruIlil;.' £",ployuCity ofNorwich Depanment ofPublic Utihties 2 Trading Agreement and OrderNo. 8119A 5. Norwich exceeds the NOx allowable emission rate for the peaking unit specified in Section 22a-174-22(e) ofthe Regulations as shown in table 1 ofthis Trading Agreement and Order. 6. Pursuantto theDepartmentofEnvironmental Protection's 

### "Credit Trading/or Sources with**lrr~gu/ar** 

### NOx Emissions"policy, with arevised date ofFebruary 27, 2001, attached-hereto and incorporatedby reference into this Trading Agreement and Order as Exhibit I, the peaking unit have peakdailyNOx emissions greater than three times the average daily emissions during the ozone season and are therefore considered sources with irregularNOx emissions. 7. Pursuant to Section 22a-174-22(j) oftbe Regulations, during the non-ozone season, Norwich intends to acquire and use approved DERCs until May I, 2005 for the peaking unit. 

### 8. The peaking unit's estimated annual usage ofbudget discrete emission reduction credits ("BDERCs") is 20 tons on apeakratebasis and 5 tons on amass basis. 15 tons are required to meetthe difference between the mass and peak rate basis. As an alternative to purchasing 15 tons at the peakrate, NoIWich intends to continue to implement an enviromnentally beneficial project, as approved in Trading Agreement and Order 8119, to reduce the emissions ofNOx and otherozone precursors from mobile sources in the state. In addition, Norwich has agreed to certain operating restrictions designed to minimize NOx emissions during days when the ozone concentration in ambient 

### airis classified by the Commissioner as "moderate to Wlhealthful", "unhealthful", or "veryWlhealthful".



## , ',-j 9. Pursuant to Section 22a-174.22G) ofthe Regulations, during the ozone season, Norwich intends to acquire and use approved DERCs andlorBDERCs until May 1, 2005 to offset emissions, on amass basis, for the peaking unit. 10. The Commissioner, pursuant to Section 22a-174-22(j) ofthe Regulations, previously approved the NOx DERCs referenced in Table 2 ofthis Trading Agreement and Order. DERCs are subject to the vintage restrictions ofthis Trading Agreement and Order. Dates afterwhich the DERCs will no longerbe eligible for use as aresult of the vintage restrictions are provided in Table 2 ofthis Trading Agreement and Order in the expiration date column.

Table 2 Ye2r of Ozone season DERC serial 

# I Ozone**Non~Ozone** season Non- Expiration Generation numbers DERC serial numbers Ozone D2te Pre 2000 Not assigned 

## I 9 N/A N/A 12/31/04

### City ofNorwich Department ofPublic Utilities 

### 3 Trading Agreement and Order. 0.8ll9A



# ..J 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 Norwich 10 comply with Section 22a-174-22 ofthe Regulations through use ofDERC and BDERC trading. Additionally, the G:ommissionerherby allows Norwich to make monetary investment ofnot Jess 

### than $15,000 peryearin the environmentally-beneficial project referenced in paragraph A.8. ofthis Trading Agreement and Order, as approved in Trading Agreement and Order 8119, and incorporatedby reference into this Trading Agreement and Order as Exhibit 2, 

### Norwich Proposal 10

### the State o/Connecticut, to achieve aportion ofthe NOx emissionreductions required by Section 22a-174-22(d)(3) 

### C. With the agreement ofNorwich, the Commissioner, acting under Sections 22a-6, 22a171, 22a-174, 22a-176, and 22a-177 ofthe Connecticut General Statutes, orders Norwich as follows: 1. Upon issuance ofthis Trading Agreement and Order, at the facility, Norwich shall complywith Section 22a-174-22 ofthe Regulations through DERC trading. Until Norwich achieves permanent compliance with the emission standard in 

### Section 22a174-22(e) ofthe regulation orbyMay 1, 2005, whichever occurs earlier:

a 

### Norwich shall use approved DERCs as required under this Trading Agreement and Order; b. Norwich shall have in its possession sufficient approved DERCs to meet applicable NOx emission limits as allowed underthis Trading Agreement and Order; and

c. Norwich shall comply during operation ofthe peaking 

### unit with the FLERS shown in Table 1 ofthis Trading Agreement and Order.

2. DERC use

a. Until May I, 2005, before the first day ofeacb month, Norwich shall have in irs possession sufficient approved DERCs for the peaking unitbased on the following calculations. Before the first day 

### ofeach month, Nof'\ltlich shall estimate DERCs required for such month for the peaking unit as follows

.City ofNorwich Department ofPublic Utilities 4 Trading Agreement and Order No.8J19A Estimated DERCs (in tons) = {(estimated fuel use in MMBtu) x {(FLER)

- (0.95 x NOx allowable emission limit»)} .;. 2000 pounds/ton Where: -Allowable emission limit

- in IbsIMMBtu as shown in table I ofthis

Trading Agreement and Order. 

## ,

• FLER

- full load emission rate in IbsIMMBtu as shown in table 1 of this

Trading Agreement and Order.

• Disco1.U1t (.95) = 5% design margin applied to the allowable limit.

b. No laterthan the twentieth day ofeach month, calculate and permanentlyretire DERCs used in the preceding calendar month for the peaking unit as follows: Actual DERCs (in tons) = {(actual fuel use in MMBtu) x «(FLER)

- (0.95 x NO. allowable emission limit))} .;. 2000 pounds/ton t9. 

## ;J c. In addirion to acquiring and using DERCs and/or BDERC as required in paragraph C.2.a. ofthis Trading Agreement and Order, Norwich implemented. the supplemental environmental program ("SEP") incorporatedby reference into Trading Agreement and OrderNo. 8119 by Exhibit 2. The SEP was designed to allow conversion ofthe City ofNonvich's vehicles to natural gas, and to provide the necessary infrastrucrure to help encourage othervehicle owners in the Southeastern Connecticut region to cooven their vehicles to natural gas. Norwich shall continue to work with Connecticut State Agencies and the administration to encourage the use ofAlternative Fuel Vehicles ("AFVs") in the state. d. During the non-azone season starting on October 1, 2003: In addition to meeting the emission limitin Table 22-1 ofSection 22a-174-22 of the Regulations, meet anon-ozone season emission limit of0.15 lblM:MBru. Priorto October 1, 2003 and October 1, 2004, Norwich shall estimate and acquire sufficient DERCs and/or allowances needed to comply with Section 22a-174-22(e)(3) ofthe Regulations as follows: Estimated DERCs (tons) [Estimated fuel use 

### in MMBtu from October 1 through April 30 x (FLER in IbsIMMBtu

- (0.95 x 0.15 IblMMBtu))] .;. 2000 pounds/ton.

### City ofNorwich Department ofPublic Utilities 

### 5 Trading Agreement and OrderNo. 8119A

,.....;i 

## .. e. No later than May 31 of2004, calculate and pennanently retire DERCs used in the preceding non-ozone season as follows: Acrua} DERCs (tons) [Acrual fuel use in MMBru from October I through April 30 x (FLER in IbsIMMBru- (0.95 x 0.15 IblMMBru))] .;. 2000 pounds/ton. 

# , 3. BDERCs shall only be used by otherNOx budgetprogram sources located 

### in Connecticut. BDERCs shall onlybe used to offset ozone season excess emissions, and shall not be used forcompliance during the non-ozone season. BDERCs generated during a given year shall onlybe used through the following ozone season. BDERCs are subject to all DERC 

### requirements set forth in this Trading Agreement and Orderexcept for those requirements penaining solely to non-ozone season DERCS and as otherwise maybeprovided. 4. Norwich shall make and keep records of: daily fuel use and fuel type; excess NOx emissions; the number ofDERCs in its possession, created, purchased and used (by serial numberifassigned) each month 

### in accordance with the appropriate emissionrates and limits 

### in this Trading Agreement and Order; the number ofDERCs used during the ozone season and non-ozone season (the remainder ofthe year); during the ozone season, the ozone classification as forecasted by the Commissioneron the previous day; as well as documentation attesting to the fact that approved DERCs used during the ozone season were generated during the ozone season. Generatorcertification ofthis fact shall be sufficient. NoIWich shall maintain and submit suchrecords to the Commissionerin accordance with Section 22a-174-22 ofthe Regulations. 5. Record Keeping. Notwich shall retain records and supporting documentation as described in this Trading Agreement and Order for aminimum offive years, commencing on the date suchrecords were created. Norwich shall provide the records specified above to the Commissioner within

## thirtY (30) days ofreceipt ofawritten request from the Commissioner. ,,- 6. Annual Emission Statement. No laterthan March 1 ofevery year afterissuance ofthis Trading Agreement and Order, NoIWich shall include with the Annual Emission Statement provided to the Commissioner, arecord ofeach sale orothertransfer, and use ofany and all ofthe DERCs approved within 

### and subsequentto issuance ofthis Trading Agreement and Orderuntil all such DERCs have been used or are no longer in Norwich's possession. Norwich shall also include actual NOx emissions from the peaking unit and the amount of all DERCs used, including serial nwnbers (ifassigned), and approved DERCs generated and/orpurchased from other facilities. These reports shall be on a form prescribed by the Commissionerand shall be in monthly increments. In 

### addition, Norwich shall provide to the Commissioner an annual report documenting the progress and results oftheCity ofNorwich Department ofPublic Utilities 6 Trading Agreement and OrderNo. 8119A

-' environmentally-beneficial program referenced in paragraph A.8 oftrus Trading Agreement and Order as well as expenditures to date 7. Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, NoIWich may use NOx allowances, pursuant to Section 22a-174-22(j) ofthe Regulations to achieve all or aportion ofthe redt,1ctions 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. Each allowance used for compliance with Section 22a174-22 ofthe Regulations shall be equivalent to one discrete emission reduction credit and shall be deducted from Norwich's NOx BudgetProgram compliance account upon such use. Allowances shall be considered used for compliance with Section 22a-174-22 ofthe Regulations when they are transferred from the facility's compliance account or overdraft account to a State ofConnecticutNOx allowance retirement account, account ill CT0000000300 in the NOx i\.llowance Tracking System. 8. DERC Doubling. At aminimwn, DERCs required shall be adjusted upwards by 100% if DERCs are not in Norwich's possession foruse priorto the first day ofeach month or applicable season. Howeverbased on the gravity ofthe noncompliance, the Commissionermay require additional upwards adjustment. 9. Vintage Restriction. Forthe purposes ofcompliance with Section 22a-174-22 ofthe Regulations, DERCs/allowances shall onlyremain valid for five (5) calendaryears from the year ofthe generation/allocation ofsuch DERCs/allowances. DERCsJallowances olderthan five (5) calendaryears from their creation/allocation are not valid for use for compliance with Section 22a-174-22 ofthe Regulations. Notwithstanding the above, DERCsiallowances generated/allocated priorto calendaryear2000 are valid for use for compliance with Section 22a-174-22 ofthe Regulations up to and including December 31, 2004. 10. FLERExceedance. Noncompliance with an established FLER shall subject oxwich to make restitution bymatching 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 IbsIMMBtu, multiplied bythe total heat input during the period of noncompliance divided by 2000 lbs/ton. 

### Ifthe period ofnoncompliance is not known, the time period from the completion ofthe last/previous Department wimessed 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 any proceeding ortake any other action to require additional upward adjustment, based on the gravity ofany alleged noncompliance or violation oflaw.

### City ofNorwich Depanment 

### ofPublic Utilities 7 Trading Agreement and Order No. 8119A

("$ 

### '.J .. 11. FLER Modification. FLERs set forth in Table 1 ofthis Trading Agreement and Order may be modified only after the consent ofthe Commissionerby wrinen modification of this Trading Agreement and Order. 12. Emissions Testing. Pursuant to Section 22a-174-22(1<) ofthe Regulations, Norwich shall conduct NOx**emissio~** tests ofthe peaking unit at least once every five years commencing from the dates oftbe-N'Ox emission tests for the peaking unit as provided in Table 1 ofthis Trading Agreement and Order. 13. Extension. No later than May 1, 2005, with respect to the peaking unit, Norwich shall comply with the requirements ofSection 22a-174-22(d)(l) ofthe Regulations. However, after 

### full program review ofthis and otherTrading Agreements and Orders and, jf detennined to be appropriate, the Conunissioner may grant a written extension ofthis Trading Agreement and Order.
14. Future Compliance Report. On orhefore September I, 2004, Norwich shall submit a report indicating how the facility shall comply with section 22a-174-22 ofthe Regulations with respect to the Peaking unit on and after May I, 2005. 15. Full compliance. Norwich shall not be considered in full compliance with this Trading Agreement and Order until all actions required bythis Trading Agreement and Order have been completed as approved. and to the Commissioner's satisfaction. 16. Approvals. Norwich shall use best efforts to submit to the Commissioner all documents required by this Trading Agreement and Orderin a complete and approvable form. lethe Commissioner notifies Norwich that any document or other action is deficient, and does not approve it with conditions ormodifications, it is deemed disapproved, and Norwich shall correct the deficiencies and resubmit it within the time specified by the Commissioner or, ifno time is specified by the Commissioner, within 30 days ofthe Commissioner's notice ofdeficiencies. 

### 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 perfonned orwith such conditions or modifications as the Commissioner deems necessaryto carry out the purposes ofthis Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance or delay. 17. Definitions. As used in this Trading Agreement and Order, "Commissioner" means the Commissioner ofEnvironmental Protection or an agent ofthe Commissioner. "Ozone season" means the period from May 1 through September 30 in any given calendar year. The date of"issuance" ofthis Trading Agreement and Order is the date the Trading Agreement and Orderis deposited in the U.S. mail or personally delivered, whichever is earlier.City ofNorwich Department ofPublic Utilities 8 Trading Agreemenl 

### and OrderNo. 8119A



# . ;**'-~** 18. Dates. The date ofsubmission to the COmnUssioner ofany document required by this Trading Agreement and Order shall be the date such document is received by the Conunissioner. The date ofany notice by the Conunissionerunder this Trading Agreement and Order, including but not limited to notice ofapproval 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 Ordermeans calendarday. Anydocument or action which is required bythis Trading Agreement and Orderto be submitted orperformed by a date which falls on a Saturday, Sunday or a COIUlecticut orfederal holiday shall be submitted orperformed by the next day which is not a Saturday, Sunday or Connecticut orfederal holiday 19. Certification ofdocuments. Any docwnent, including but not limited to any notice, which is required to be submitted to the Commissionerunder this Trading Agreement and Order shall be**signe~** by W or, ifrv1P is not an individual, by an individual who is an authorized representative oftheRespondent, 

### in accordance with Section 22a-174-2a(a) ofthe Regulations ofConnecticut State Agencies, and bythe individual(s) responsible for actually preparing such document, and each such individual shall certify in writing as as 

### follows:

"1 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 ofthose individuals responsible for obtaining the information, that the submitted information is true, accurate and complete to the best ofmy knowledge and belief. 1understand that any false statementmade in the submitted information is punishable as a criminal offense under Section 53a-157b ofthe Connecticut General Statutes and any other applicable law." 20. oncompliance. This TradingAgreement and Orderis a final order ofthe Commissioner with respect to the matters addressed herein, and is nonappealable and immediately enforceable. Failure to complywith this Trading Agreement and Ordermay subject Norwich to an injunction and penalties. 21. False statements. Any false statement in any information submitted pursuantto this Trading Agreement and Order is punishable as a criminal offense W1der Section 53a·157b ofthe Connecticut General Statutes and any other applicable law. 

### 22. Notice oftransfer: liabilirv ofNorwich and others. Until Norwich has fully 

### complied with this Trading Agreement and Order,

. orwich shall notify the Commissioner in writing no laterthan fifteen (15) days aftertransferring all or any portion ofany ofthe facilities, the operations, the sites or the businesses which are the subject ofthis Trading Agreement and Order or after obtaining a new mailing or location addresses. NOf'INich'sCity ofNorwich Department ofPublic Utilities 9 Trading Agreement and Order No. 8119A**,~** 

### -J ?' _J.

24.

25. obligations under this Trading Agreement and Order shall not be affected by the passage oftitle to any property to any otherperson or municipality. Commissioner's powers. Nothing in this Trading Agreement and Order shall affect the Commissioner's authority to institute anyproceeding or take any other action to prevent or abate violations**of~aw,** prevent or abate pollution, recover costs and natural resource damages, and to impose penalties forpast, present, or future violations oflaw. Ifat any time the Commissionerdetermines that the actions taken byNorwich 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 anyproceeding to require Norwich to undertake further investigation or funher action to prevent or abate violations or pollution. Norwich's obli2ations under law. Nothing in this Trading Agreement and Order shall relieve Norwich ofother obligations under applicable federal, state and local law.
No 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 byNorwich pursuant to this Trading Agreement and Order will result in compliance orprevent or abate pollution. 

### 26. Access to facility. Any representative ofthe Department ofEnvironmental Protection may enter any ofthese facilities without prior notice for the purposes ofmonitoring and enforcing the actions required or allowed by this Trading Agreement and Order.

. 27. No effect on rights 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. 

### 28. No Creation ofProperrv Ricl1ts. This Trading Agreement and Order does not create any propertyrights with respect to these DERCs. 

### 29. Notice to Commissioner ofchanges. Within fifteen (15) days ofthe date Norwich becomes aware ofa change 

### in any information submitted to the Commissionerunder this Trading Agreement and Order, or that any such infonnation was inaccurate or misleading or that anyrelevant information was omined, Norwich shall submit the correct or omined information to the Commissioner. 

### 30. Notification ofnoncompliance. In the event that Norwich becomes aware that it did not or may not comply, or did not or may not comply on time, with any requirement ofthis Trading Agreement and Order or ofany document required hereunder, Norwich shallCity ofNorwich Depanment ofPublic Utilities 

### 10 Trading Agreement and Order No. 8119A**,~** 

### :J



## • \J 31. immediately notify by telephone the individual identified in the next paragraph and shall take all reasonable steps to ensure that any noncompliance or delay is avoided or, if unavoidable, is minimized to the greatest extentpossible. Within five (5) days ofthe initial notice, Norwich 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 written ap,proval ofthe Commissioner, dates by which compliance will be achieved, and Norwich shall complywith any dates which may be approved in vmting by the Commissioner. Notification by Norwich shall not excuse noncompliance or delay, and the Commissioner's approval ofany compliance dates proposed shall not excuse noncompliance or delay unless specifically so stated by the Commissioner in writing. Submission ofdocuments, 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 orin writing by the Commissioner, be directed to: Mr. Michael LaFleur Department ofEnvironmental Protection Bureau of

### AirManagement Compliance and Field Operations Division Emissions and Credit Trad,ing Section 79 Elm Street Hartford, CT 06106

### City ofNorwich 

### Department ofPublic 

### Utilities 11 

### Trading Agreement and Order No. 8119A 

### Norwich consents to the issuance ofthis 

### Trading Agreement and Order without further notice. The lU1dersigned cenifies that he/she is fully authorized to 

### enter into this Trading Agreement and Order and to legally bind Norwich to the tenns and conditions ofthe 

### Trading Agreement and Order. 

### CityofNonrichDepartment ofPublicUtilities Signature

# t~ Name: 

## 2ic.h.o..-cI De.sRDC-h.e.S
Title: 

# G·eV'€-ra.i Mo"Cl§U'"
Date 

# 'i
- ;);,

- 0.3

Issued as afina 

# /

/ order ofthe 

### Commissioner ofEnvironmental 

### Protection on 

# '(/

. 

### U.A ,2003. 

# 'J /'

# ~-,**~~~t6-;(/** /"firthur 1. 

### Rocque, Jr,

### ~/ Commissioner 

# // ;/

CITY OF NORWICH LAND RECORDS MlllLED CERTIFIED MAlL, RETURN RECEIPT REQUESTED 

### Cenified Docrnnent No.