# ii**~Y'~** STATE OFCONNECTICUT DEPARTMENT OF ENVIRONMENTALPROTECTION

In the matter of

The State ofConnecticut and

The Connecticut Light and Power Company Trading Agreement and Order No. 8159



### Whereas, the Commissioner ofEnvironmental Protection ("Commissioner") and The Connecticut Light and Power Company ("CL&P") 

### 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 ofemission reduction trading will achieve this result in a timely and cost-effective manner:

A. At the request and with the agreement ofCL&P, the Commissioner finds the following:

1. CL&P is an electric utility with headquarters in Berlin, Connecticut, which owns and operates four fossil fuel-fired electric generating stations within the state.

2. One ofthe four fossil fuel-fired electric generating stations within the state that CL&P owns and operates is Devon Station at Naugatuck Avenue in Milford, Connecticut ("facilityH). At the facility, CL&P operates Devon Station Unit 7, a 109 megawatt frontfired boiler on No. 6 fuel oil and/or natural gas and Devon Station Unit 8, a 109 megawatt front-fired boiler

on No. 6 fuel oil and/or natural gas, Connecticut Registration Numbers 105-0055 and 105-0058 respectively, ("boilersH ). Acontinuous emissions monitor ("CEM"), certified to 40 Code of Federal Regulations Part 75, measures nitrogen oxide ("NOx") emissions at a common stack from the boilers.

3. During the year 1982, prior to modifications of the boilers' burners, combustion controls and operating conditions, andprior to the installation ofnatural gas operating capabilities, and based on Department of Environmental Protection approved stacktest data, the

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average annual NOx emission rate for Devon Station Unit 7 was 0.267 pounds permillion British thermal units ("lbs/MMBtu") ofheat input when operating on No. 6 fuel oil and the average annual NOx emission rate for Devon StationUnit 8 was 0.254 Ibs/MMBtu of heat input when operating on No.6 fuel oil. On and afterMay 31, 1995, the Regulations ofConnecticut State Agencies ("Regulations") require that the boilers emit NOx at a rate no greater than 0.25 lbs/MMBtu ofheat input (24- hour average) when operating on No.6 fuel oil and 0.20 Ibs/MMBtu ofheat input (24-hour average) when operating on natural gas.

4. In January 1994, CL&P completedmodifications on both boilers' burners and combustion controls and began to test and adjust operating conditions, thereby reducing the boilers' NOx emission rates below their permitted, allowed and actual baseline emission rates. Natural gas operating capabilities were installed at the facility byAugust, 1994 to provide further reductions ofNOx emissions. Such modifications and installation capabilities enabled CL&P's boilers to frequently meet and operate below the emission limitation specified in Section 22a-174-22(e)ofthe Regulations.

5. AfterNovember 1, 1996, CL&Pmay obtain approval of actual reductions in NOx emissions, generated by operating the boilers at a rate which is below 0.25 Ibs/MMBtu ofheat input when operating on No. 6 fuel oil, and 0.20 Ibs/MMBtu ofheat input when operating on natural gas for use as emission reduction credits ("ERCs")

.

Date: 2 Pursuant to Section 22a-174-22(j) ofthe Regulations, CL&P intends to acquire and generate approved ERCs until May 1, 2003 at the facility. Approved ERCs are defined for purposes ofthis TradingAgreement and Order as those for which the Commissioner has provided written authorization for use in compliance with Section 22a-174-22 ofthe Regulations. CL&P will acquire approved ERCs monthly on an as-needed basis, as determined by actual NOx emissions in the event that the 24-hour average exceeds the NOx emission

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Initials:The Connecticut Light and PowerCompany Trading Agreement and Order No. 8159

limitations ofSection 22a-174-22(e) ofthe Regulations.

7. When properlydocumentedby CL&P, and approvedby the Commissioner, the emission reductions identified above, and as computed in accordance with the terms ofthis TradingAgreement andOrder, will conformto the requirements ofSection 22a-174-22(j)(3) ofthe Regulations. Specifically, the reductions will be:

because they result in a reduction ofactual emissions released into the air, net ofany consequential increase in actual emissions resulting from shifting demand. The emission reductions are properlymeasured, recorded and reported.
Quantifiable because they are based on continuous emission monitoring data as applied in an appropriate reliable and replicable protocol, providing the rate and total mass amount ofreduction. Surplus because they are not requiredby any Connecticut statute or regulationmandatedby a current State Implementation Plan ("SIP"), and are not currently relied upon in any applicable attainment plan, any reasonable further progress plan ormilestone demonstration.

Permanent because the advanced control systems and installation capabilities are in place and operating, and an appropriate tracking systemis in place to monitor all data required to verify and quantify the creation ofERCs.

Enforceable because the ERCs are approvedby the Commissioner retrospectively after the submission by CL&P of the quarterly or semi-annual report that will document their creation.

Date: 3 As documentedinAttachment 1, attached to and incorporatedby reference into this Trading Agreement andOrder, 313 ERCs were createdby the boilers between November 1, 1996 and September 30, 1997 (192 during the 

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Initials:The Connecticut Light and PowerCompany Trading Agreement and Order No. 8159

ozone season and 121 during the non-ozone season). Of the 192 ozone season ERCs, 141 early emission reduction credits were createdbelow the standards prescribed in Section 22a-174-22a ofthe Regulations (the NOx Budget Program) during 1997 by the boilers and shall be converted into allowances.

9. Ten (10) percent ofthese ERCs (31) are retired and permanently removed from all calculations to assure a benefit to the environment, leaving 141 ERCs available for use (32 ozone season and 109 non-ozone season).

B. The Commissioner, in accordance with the provisions of this Trading Agreement andOrder, pursuant to Section 22a-174- 22(d) (4) ofthe Regulations, will allow CL&P and approved

sources within Connecticut to use 141 tons ofNOx ERCs referenced in paragraphA.9. of this Trading Agreement and Order (32 during the ozone season and 109 during the nonozone season) for purposes ofcompliance under Section 22al74-22(j) and/or Section 22a-174-3(1)(5) ofthe Regulations to achieve a portion ofthe nitrogen oxide emission reductions required or as emission offsets for new sources. Upon sufficient documentation as prescribedbelow, the Commissionermay provide written approval ofadditional ERCs by CL&P retrospectively. Approved ERCs created by CL&P may be heldby CL&P or transferred to otherpersons. Such ERCs shall remain valid until they are used or until May 1, 2003, whichever occurs first

. 

### • C. With the agreement ofCL&P, the Commissioner, acting under Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a-177 of the Connecticut General Statutes, orders CL&P as follows:

Date: 4 ERC generation. Forpurposes ofgenerating ERCs from the boilers at the facility, CL&P shall use 0.25 lbs/MMBtu ofheat input when operating on No. 6 fuel oil and 0.20 lbs/MMBtu ofheat input when operating on natural gas as the baseline emission rates for the boilers, orthe proportionedbaseline emission rate set forth in footnote 2 ofparagraph C.10. ofthis Trading Agreement and Order, when simultaneously operating on more than one fuel. CL&P shall use the above 

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Initials:The Connecticut Light and Power Company TradingAgreement andOrderNo. 8159

referenced baseline emission rate(s) when calculating the proportionedbaseline emission rate. When calculating ERCs, CL&P shall use the lower ofCEMrecorded NOx emission rates* or actual fuel usage data for the boilers in MMBtu/day, when determining heat input. Ten (10) percent ofall ERCs (tons) createdby the boilers shall be retired by the facility and permanently removed from all calculations on a daily basis to assure a benefit to the environment.

*This rate shall be calculatedpursuantto themethodology describedin 40CodeofFederal Regulations Part75.

2. ERC Use. Approved ERCs shall be acquired for the period beginning June 1, 1995 and continuing until CL&P achieves permanent compliance for the boilers with the emission standards in Section 22a-174-22(e} of the Regulations oruntil May 1, 2003, whichever occurs first. CL&P shall acquire approved ERCs, and document and record the amounts ofNOx emissions and ERCs used by the boilers eachmonth, and shall maintain and provide such records in accordance with the following and Section 22a-174-4 ofthe Regulations, until May 1, 2003:

a. Before the first day ofeachmonth, calculate projected worst case ERCs required for the same calendarmonth as follows:

ERCs (tons) = {[estimatedworst case NOx emission
rate in lbs/MMBtu

- ((0.95) x (NOx RACT limit or proportioned emission rate calculatedpursuant to Section 22a-174-22(f)(2)(Al ofthe Regulations in lbs/MMBtu))] x (Estimated fuel use in MMBtu)} 2000 pounds.

b. Acquire sufficient approved ERCs no later than the first ofeachmonth to assure compliance for, at a minimum, that calendarmonth. Excess ERCs from previous months canbe applied to subsequent months. ERes required shall be adjusted upwards by 100% ifERCs are not in CL&P's possession prior

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to use. Trading Agreement and OrderNo. 8159

c. No later than the twentieth day ofeach month, calculate ERCs used in the preceding calendar month, as follows:
(1) For the boilers on each day, determine whether the 24-hour average NOx emission rate is less than the baseline emission rate or greater than the NOx RACT limit.
(2) When the boilers have a daily NOx emission rate (24-hour average) exceeding the NOx RACT limit, calculate the amount ofERCs used, as follows:

ERCs (tons) {[(CEM-recordedNOx daily average emission rate in lbs/MMBtu) ((0.95) x (NOx RACT limit orproportioned emission rate calculatedpursuant to Section 22a-174-22(f)(2)(A) ofthe Regulations in lbs/MMBtull] x (actual fuel use in MMBtul} 2000 pounds.

d. Maintain documentation to attest to the fact that ERCs used during the ozone season were generated during the ozone season. Generator certification ofthis fact shall be sufficient.

e. After full programreview, and ifthe Commissioner deems it appropriate, the Commissionermay allow the survival and use ofthese ERCs beyond April 30, 2003.

3. CL&P shall maintain records for the boilers showing daily NOxmass emissions, and actual NOx emission rates (24-hour average). CL&P shall also maintain records showing a monthly total ofall ERCs generated net of the ten (10) percent environmental discount.

4. In requesting ERC approval, CL&P shall provide documentation containingmonthly operating reports of

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actual fuel usage inMMBtu and actual heat input based upon CEM-recordeddata, daily actual NOxmass emissions andNOx emission rates (24-hour average), number of operating hours perday, and ERCs generatedusing the baseline emission rate(s), or the proportionedbaseline emission rate, net ofthe ten (10) percent environmental discount.

5. No later than March 1 ofevery year after issuance of this Trading Agreement andOrder, CL&P shall include with the Annual Emission Statementprovided to the Commissioner, a record ofeach sale or other transfer, and use ofany and all ofthe ERCs approved within and subsequent to issuance of this Trading Agreement and Order until all such ERCs have been used. CL&P shall also include actual NOx emissions from the boilers, and the amount ofall ERCs used (including approved ERCs generated and/orpurchased from other facilities), generated and/or approved for the previous calendar year. These reports will be on a formprescribedby the Commissioner. This reporting may cease ifa central registry is approvedby the Commissioner. ShouldCL&P choose to discontinue the generation of ERCs, CL&P will notify the Commissioner upon discontinuance.

6. In order to consider CEM-recordedNOx emission rates valid for ERC approval, all NOx and CO2/02CEMs must comply with 40 Code ofFederal Regulations Part 75.

7. CL&P shall retain records and supporting documentation
as described in this Trading Agreement and Order for a minimumoffive years, commencing on the date such records were created. CL&P shall provide the records specified above to the Commissioner within thirty (30) days ofreceipt ofa written request from the Commissioner.

Date; 7 Upon sufficient documentation that CL&P has met the requirements ofparagraphs C.l., C.3, C.4., and C.10., ofthis TradingAgreement and Order, the Commissioner may provide written approval ofERCs created by CL&P retrospectively, in addition to those approved in 

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paragraph B. ofthis Trading Agreement and Order. Requests for approval ofall subsequent ERCs created shall be submitted in writing to the Commissioner. 

### Approved ERCs createdbyCL&Pmay be held or transferred to otherpersons. Such ERCs shall remain valid until they are used or until May 1, 2003, whichever occurs first.

9. Should CL&P choose to generate additional ERCs, reports documenting these ERCs maybe submitted on a quarterly
or semi-annual basis. Such reports shall be compiled
on a monthly basis.

10. When the boilers have daily NOx emissions below the applicable baseline emission rate(s), or the proportionedbaseline emission rate, CL&P shall calculate the amount ofERCs generated as follows:



### ERCs (tons) = 

### {[Total heat input' ofall fuels in MMBtu

x ((proportionedbaseline emission rate2) - (the CEMrecorded NOx emission rate3))] 7 2000 lbs/ton x (0.90).4

1 Heat input shall be calculatedusing the lower ofCEMrecorded data or actual fuel usage data in MMBtu per unit of fuel combusted.

2This rate shall be calculated by 1)multiplying the heat input ofeach fuel combustedby the baseline emission rate(s) for such fuel; 2) summing those products; and 3) dividing the sumby the total heat input. Ifthe boilers are operating exclusively on one fuel, CL&Pmay replace the proportionedbaseline emission rate with the applicable baseline emission rate, for that fuel.

3This rate shall be calculatedpursuant to the methodology described in 40 Code of Federal Regulations Part 75.

4Ten (10) percent ofall ERCs (tons) createdby the boilers shall be retired by the facility and permanently removed from all calculations on a daily basis to assure

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a benefit to the environment. Trading Agreement and Order No. 8159

11. As used in this TradingAgreement and Order, "Commissioner" means the Commissioner ofEnvironmental Protection oran agent ofthe Commissioner. "Ozone
seasonH means the period fromMay 1 through September 30 in any given calendaryear.

12. Notification ofnoncompliance. In the event that CL&P becomes aware that it did not ormay not comply, or did not ormay not comply on time, with any requirement of this Trading Agreement and Order or ofany document required hereunder, CL&P shall immediately notify the Commissioner and shall take all reasonable steps to
ensure that any noncompliance ordelay is avoided or, if unavoidable, is minimizedto the greatest extent possible. In so notifying the Commissioner, CL&P shall state in writing the reasons for the noncompliance or delay and propose, for the review and written approval ofthe Commissioner, dates by which compliance will be achieved, and CL&P shall comply with any dates which may be approved in writing by the Commissioner. Notification by CL&P shall not excuse noncompliance or delay, and the Commissioner's approval ofany compliance dates proposed shall not excuse noncompliance or delay unless specifically so statedby the Commissioner in writing.

13. Certification QfdQcuments. Any dQcument, including but nQt limitedtQ any nQtice, which is required tQ be submitted to the CQmmissioner under this Trading Agreement and Order shall be signedby a responsible cQrpQrate Qfficer ofCL&P or a duly authQrized representative Qf such officer, as thQse terms are defined in Section 22a-430-3(b) (2) of the Regulations, andby the individual Qr individuals responsible fQr actuallypreparing such document, each QfwhQm shall examine andbe familiar with the information submitted in the document and all attachments thereto, and shall make inquiry Qfthose individuals responsible for Qbtaining the information tQ determine that the infQrmatiQn is true, accurate, and cQmplete, and each Qf whom shall certify in writing as follows:

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"I have personally examined and am familiar with the information submitted in this document and all attachments thereto, and I certify that based on reasonable investigation, includingmy inquiry ofthose individuals responsible for obtaining the information, the submitted information is true, accurate and complete to the best ofmy knowledge and belief. I understand that any false statementmade in the submitted information may be punishable as a criminal offense under Section 22a-175 ofthe Connecticut General Statutes or, in accordance with Section 22a-6 of the Connecticut General Statutes, under Section 53a-157b of the Connecticut General Statutes, and in accordance with any other applicable statute."

14. Final Agreement and Order. This Trading Agreement and Order is the final agreement and orderby and between the Commissioner and CL&P with respect to the matters addressed herein, and shall not be modified without the written agreement ofboth parties.

15. False statements. Any false statement in any information submittedpursuant to this Trading Agreement and Ordermay be punishable as a criminal offense under Section 22a-175 ofthe Connecticut General Statutes or, in accordance with Section 22a-6, under Section 53a-157b ofthe Connecticut General Statutes.

Date: 10 Notice of transfer; liability ofCL&P and others. Until CL&P has fully complied with this Trading Agreement and Order, CL&P shall notify the Commissioner in writing no later than fifteen (15) days after transferring all or anyportion ofthe facility, the operations, the site or the business which are the sUbject of this Trading Agreement and Order, or obtaining a new mailing or location address. Any license transfer shall be conducted in accordance with Section 22a-60 of the Connecticut General Statutes. CL&P'S obligations under this Trading Agreement and Order shall not be affected by the passage oftitle to any property to any other person ormunicipality. Any future owner of the facility may be sUbject to the issuance ofa Trading Agreement and Order from the Commissioner. 16.

Initials:The Connecticut Light and PowerCompany Trading Agreement and Order No. 8159

17. Commissioner's powers. Nothing in this Trading Agreement andOrder 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 penalties for violations of law which are willful orcriminally negligent or for which penalties have not been specifically provided in this Trading Agreement and Order, including but not limited to violations ofany permit issuedby the Commissioner. Ifat any time the Commissioner determines that the actions taken byCL&Ppursuant to this Trading Agreement and Order have not fully achieved compliance with Section 22a-174-22 of the Regulations, the Commissioner may institute anyproceeding against CL&P and/or require CL&P to undertake further investigation or further action.

18. CL&P's obligations under law. Nothing in this Trading Agreement and Order shall relieve CL&P of other obligations under applicable federal, state and local law.

19. Access to records and facility. Any representative of the Department ofEnvironmental Protection may enter and inspect the facility and inspect and copy records within normal business hours without priornotice for the purposes ofmonitoring and enforcing the actions required or allowed by this TradingAgreement and Order.

20. No effect 00 rights ofotherpersons. This Trading Agreement andOrder shall neither create nor affect any rights ofpersons who ormunicipalities which are not parties to this TradingAgreement and Order.

21. No Creation of Property Rights. This TradingAgreement andOrder does not create any property rights with respect to these ERCs.

Date: 11**fiN~Q~t~i~c~e~t~Q~C~QQmmmm~i~s~s~i~Qlln~e~r~Q~f~cnh~a~n~gue~sLc.**Within fifteen (15) days of the date CL&Pbecomes aware ofa change in any information submitted to the Commissionerunder this

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Trading Agreement and Order, or that any such information was inaccurate ormisleading or that any relevant information was omitted, CL&P shall submit the correct or omitted information to the Commissioner.

23. Submission ofdocuments. Any document required to be submitted to the Commissioner under this Trading Agreement andOrder shall, unless otherwise specified in writing by the Commissioner, be directed to:

Mr. DavidJawin Department ofEnvironmental Protection Bureau ofAirManagement Compliance and FieldOperations Division Emissions Trading Unit 79 Elm Street Hartford, Connecticut 06106

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CL&P consents to the issuance of this Trading Agreement and Order without further notice. The undersigned certifies that he/she is fully authorized to enter into this Trading Agreement and Order and to legally bind CL&P to the terms and conditions of the Trading Agreement and Order.

Signature:
Type Name: 

### Type Title:

Date: The Connecticut Light

# ~~I-"'

# w~~ Vice President
April 28, 1999

Issued as a final consent order of the Commissioner of

Environmental Protection on 1999.

Arthur J. Rocque, Jr. Commissioner



### CITY OFMILFORDLAND RECORDS MAILEDCERTIFIEDMAIL, RETURN RECEIPT REQUESTED Certified Document No.

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