~Y'~ ii STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of

The State of Connecticut and

The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8159

Whereas, the Commissioner of Environmental 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 of emission reduction trading will

achieve this result in a timely and cost-effective manner:

A. At the request and with the agreement of CL&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 of the 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). A continuous 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, and prior to the installation of natural

gas operating capabilities, and based on Department of

Environmental Protection approved stack test data, the

Initials:

(Printed 011 Recycled Piper)

79 EIII1 Street • HlnfOld, cr 06106· .5127

bllp:lldep.stlte.et.us

All Equal Oppowmity Employer

Date:
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8159

average annual NOx emission rate for Devon Station Unit

7 was 0.267 pounds per million British thermal units

("lbs/MMBtu") of heat input when operating on No. 6

fuel oil and the average annual NOx emission rate for

Devon Station Unit 8 was 0.254 Ibs/MMBtu of heat input

when operating on No.6 fuel oil. On and after May 31,

1995, the Regulations of Connecticut State Agencies

("Regulations") require that the boilers emit NOx at a

rate no greater than 0.25 lbs/MMBtu of heat input (24-

hour average) when operating on No.6 fuel oil and 0.20

Ibs/MMBtu of heat input (24-hour average) when

operating on natural gas.

4. In January 1994, CL&P completed modifications 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 by August, 1994 to provide further reductions

of NOx 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)of the Regulations.

5. After November 1, 1996, CL&P may obtain approval of

actual reductions in NOx emissions, generated by

operating the boilers at a rate which is below 0.25

Ibs/MMBtu of heat input when operating on No. 6 fuel

oil, and 0.20 Ibs/MMBtu of heat input when operating on

natural gas for use as emission reduction credits

("ERCs") .

2 Date:

Pursuant to Section 22a-174-22(j) of the Regulations,

CL&P intends to acquire and generate approved ERCs

until May 1, 2003 at the facility. Approved ERCs are

defined for purposes of this Trading Agreement and

Order as those for which the Commissioner has provided

written authorization for use in compliance with

Section 22a-174-22 of the 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

</6.'1h9 rr

6.

Initials:
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8159

limitations of Section 22a-174-22(e) of the

Regulations.

7. When properly documented by CL&P, and approved by the

Commissioner, the emission reductions identified above,

and as computed in accordance with the terms of this

Trading Agreement and Order, will conform to the

requirements of Section 22a-174-22 (j) (3) of the

Regulations. Specifically, the reductions will be:

because they result in a reduction of actual

emissions released into the air, net of any

consequential increase in actual emissions resulting

from shifting demand. The emission reductions are

properly measured, 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 of reduction.

Surplus because they are not required by any

Connecticut statute or regulation mandated by a current

State Implementation Plan ("SIP"), and are not

currently relied upon in any applicable attainment

plan, any reasonable further progress plan or milestone

demonstration.

Permanent because the advanced control systems and

installation capabilities are in place and operating,

and an appropriate tracking system is in place to

monitor all data required to verify and quantify the

creation of ERCs.

Enforceable because the ERCs are approved by the

Commissioner retrospectively after the submission by

CL&P of the quarterly or semi-annual report that will

document their creation.

3 Date:

As documented in Attachment 1, attached to and

incorporated by reference into this Trading Agreement

and Order, 313 ERCs were created by the boilers between

November 1, 1996 and September 30, 1997 (192 during the

'161111

8.

Initials:
The Connecticut Light

and Power Company

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 created below the standards prescribed in

Section 22a-174-22a of the Regulations (the NOx Budget

Program) during 1997 by the boilers and shall be

converted into allowances.

9. Ten (10) percent of these 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 and Order, pursuant to Section 22a-174-

22 (d) (4) of the Regulations, will allow CL&P and approved

sources within Connecticut to use 141 tons of NOx ERCs

referenced in paragraph A.9. of this Trading Agreement and

Order (32 during the ozone season and 109 during the nonozone season) for purposes of compliance under Section 22al74-22(j) and/or Section 22a-174-3(1) (5) of the Regulations

to achieve a portion of the nitrogen oxide emission

reductions required or as emission offsets for new sources.

Upon sufficient documentation as prescribed below, the

Commissioner may provide written approval of additional ERCs

by CL&P retrospectively. Approved ERCs created by CL&P may

be held by CL&P or transferred to other persons. Such ERCs

shall remain valid until they are used or until May 1, 2003,

whichever occurs first .

• C. With the agreement of CL&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:

4 Date:

ERC generation. For purposes of generating ERCs from

the boilers at the facility, CL&P shall use 0.25

lbs/MMBtu of heat input when operating on No. 6 fuel

oil and 0.20 lbs/MMBtu of heat input when operating on

natural gas as the baseline emission rates for the

boilers, or the proportioned baseline emission rate set

forth in footnote 2 of paragraph C.10. of this Trading

Agreement and Order, when simultaneously operating on

more than one fuel. CL&P shall use the above

Yhilt?

1.

Initials:
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8159

referenced baseline emission rate(s) when calculating

the proportioned baseline emission rate. When

calculating ERCs, CL&P shall use the lower of CEMrecorded NOx emission rates* or actual fuel usage data

for the boilers in MMBtu/day, when determining heat

input. Ten (10) percent of all ERCs (tons) created by

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 calculated pursuant to the methodology

described in 40 Code of Federal Regulations Part 75.

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 or until May 1, 2003, whichever occurs

first. CL&P shall acquire approved ERCs, and document

and record the amounts of NOx emissions and ERCs used

by the boilers each month, and shall maintain and

provide such records in accordance with the following

and Section 22a-174-4 of the Regulations, until May 1,

2003:

a. Before the first day of each month, calculate

projected worst case ERCs required for the same

calendar month as follows:

ERCs (tons) = {[estimated worst case NOx emission

rate in lbs/MMBtu - ((0.95) x (NOx RACT limit or

proportioned emission rate calculated pursuant to

Section 22a-174-22 (f) (2) (Al of the Regulations in

lbs/MMBtu))] x (Estimated fuel use in MMBtu)}

2000 pounds.

b. Acquire sufficient approved ERCs no later than the

first of each month to assure compliance for, at a

minimum, that calendar month. Excess ERCs from

previous months can be applied to subsequent

months. ERes required shall be adjusted upwards

by 100% if ERCs are not in CL&P's possession prior

Initials: 5 Date:
The Connecticut Light

and Power Company

to use.

Trading Agreement

and Order No. 8159

c. No later than the twentieth day of each 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 of ERCs used, as

follows:

ERCs (tons) {[(CEM-recorded NOx daily

average emission rate in lbs/MMBtu)

((0.95) x (NOx RACT limit or proportioned

emission rate calculated pursuant to Section

22a-174-22 (f) (2) (A) of the 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

of this fact shall be sufficient.

e. After full program review, and if the Commissioner

deems it appropriate, the Commissioner may allow

the survival and use of these ERCs beyond April

30, 2003.

3. CL&P shall maintain records for the boilers showing

daily NOx mass emissions, and actual NOx emission rates

(24-hour average). CL&P shall also maintain records

showing a monthly total of all ERCs generated net of

the ten (10) percent environmental discount.

4. In requesting ERC approval, CL&P shall provide

documentation containing monthly operating reports of

Initials: 6 Date:
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8159

actual fuel usage in MMBtu and actual heat input based

upon CEM-recorded data, daily actual NOx mass emissions

and NOx emission rates (24-hour average), number of

operating hours per day, and ERCs generated using the

baseline emission rate(s), or the proportioned baseline

emission rate, net of the ten (10) percent

environmental discount.

5. No later than March 1 of every year after issuance of

this Trading Agreement and Order, CL&P shall include

with the Annual Emission Statement provided to the

Commissioner, a record of each sale or other transfer,

and use of any and all of the 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 of all ERCs used (including approved ERCs

generated and/or purchased from other facilities),

generated and/or approved for the previous calendar

year. These reports will be on a form prescribed by

the Commissioner. This reporting may cease if a

central registry is approved by the Commissioner.

Should CL&P choose to discontinue the generation of

ERCs, CL&P will notify the Commissioner upon

discontinuance.

6. In order to consider CEM-recorded NOx emission rates

valid for ERC approval, all NOx and CO2 /02 CEMs must

comply with 40 Code of Federal Regulations Part 75.

7. CL&P shall retain records and supporting documentation

as described in this Trading Agreement and Order for a

minimum of five years, commencing on the date such

records were created. CL&P shall provide the records

specified above to the Commissioner within thirty (30)

days of receipt of a written request from the

Commissioner.

7 Date;

Upon sufficient documentation that CL&P has met the

requirements of paragraphs C.l., C.3, C.4., and C.10.,

of this Trading Agreement and Order, the Commissioner

may provide written approval of ERCs created by CL&P

retrospectively, in addition to those approved in

'i'/z9/f1

8.

Initials:
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8159

paragraph B. of this Trading Agreement and Order.

Requests for approval of all subsequent ERCs created

shall be submitted in writing to the Commissioner.

Approved ERCs created by CL&P may be held or

transferred to other persons. 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 may be 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

proportioned baseline emission rate, CL&P shall

calculate the amount of ERCs generated as follows:

ERCs (tons) = {[Total heat input' of all fuels in MMBtu

x ((proportioned baseline emission rate 2 ) - (the CEMrecorded NOx emission rate 3 ))] 7 2000 lbs/ton x (0.90).4

1 Heat input shall be calculated using the lower of CEMrecorded data or actual fuel usage data in MMBtu per

unit of fuel combusted.

2 This rate shall be calculated by 1) multiplying the

heat input of each fuel combusted by the baseline

emission rate(s) for such fuel; 2) summing those

products; and 3) dividing the sum by the total heat

input. If the boilers are operating exclusively on one

fuel, CL&P may replace the proportioned baseline

emission rate with the applicable baseline emission

rate, for that fuel.

3 This rate shall be calculated pursuant to the

methodology described in 40 Code of Federal Regulations

Part 75.

4 Ten (10) percent of all ERCs (tons) created by the

boilers shall be retired by the facility and permanently

removed from all calculations on a daily basis to assure

Initials: 8 Date:
The Connecticut Light

and Power Company

a benefit to the environment.

Trading Agreement

and Order No. 8159

11. As used in this Trading Agreement and Order,

"Commissioner" means the Commissioner of Environmental

Protection or an agent of the Commissioner. "Ozone

season H means the period from May 1 through September 30

in any given calendar year.

12. Notification of noncompliance. In the event that CL&P

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 of any document

required hereunder, CL&P shall immediately notify the

Commissioner and shall take all reasonable steps to

ensure that any noncompliance or delay is avoided or, if

unavoidable, is minimized to 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

of the 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 of any compliance dates proposed

shall not excuse noncompliance or delay unless

specifically so stated by the Commissioner in writing.

13. Certification Qf dQcuments. Any dQcument, including but

nQt limited tQ any nQtice, which is required tQ be

submitted to the CQmmissioner under this Trading

Agreement and Order shall be signed by a responsible

cQrpQrate Qfficer of CL&P or a duly authQrized

representative Qf such officer, as thQse terms are

defined in Section 22a-430-3 (b) (2) of the Regulations,

and by the individual Qr individuals responsible fQr

actually preparing such document, each Qf whQm shall

examine and be familiar with the information submitted

in the document and all attachments thereto, and shall

make inquiry Qf those 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:

Initials: 9 Date:
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8159

"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, including my inquiry of those

individuals responsible for obtaining the information,

the submitted information is true, accurate and complete

to the best of my knowledge and belief. I understand

that any false statement made in the submitted

information may be punishable as a criminal offense

under Section 22a-175 of the 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 order by and between

the Commissioner and CL&P with respect to the matters

addressed herein, and shall not be modified without the

written agreement of both parties.

15. False statements. Any false statement in any

information submitted pursuant to this Trading Agreement

and Order may be punishable as a criminal offense under

Section 22a-175 of the Connecticut General Statutes or,

in accordance with Section 22a-6, under Section 53a-157b

of the Connecticut General Statutes.

10 Date:

Notice of transfer; liability of CL&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

any portion of the 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 of title to any property to any other

person or municipality. Any future owner of the

facility may be sUbject to the issuance of a Trading

Agreement and Order from the Commissioner.

16.

Initials:
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8159

17. 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 of law, prevent or

abate pollution, recover costs and natural resource

damages, and to impose penalties for violations of law

which are willful or criminally negligent or for which

penalties have not been specifically provided in this

Trading Agreement and Order, including but not limited

to violations of any permit issued by the Commissioner.

If at any time the Commissioner determines that the

actions taken by CL&P pursuant to this Trading Agreement

and Order have not fully achieved compliance with

Section 22a-174-22 of the Regulations, the Commissioner

may institute any proceeding 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 of Environmental Protection may enter and

inspect the facility and inspect and copy records within

normal business hours without prior notice for the

purposes of monitoring and enforcing the actions

required or allowed by this Trading Agreement and Order.

20. No effect 00 rights of other persons. This Trading

Agreement and Order shall neither create nor affect any

rights of persons who or municipalities which are not

parties to this Trading Agreement and Order.

21. No Creation of Property Rights. This Trading Agreement

and Order does not create any property rights with

respect to these ERCs.

11 Date:

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&P becomes aware of a change in any

information submitted to the Commissioner under this

~df

22.

Initials:
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8159

Trading Agreement and Order, or that any such

information was inaccurate or misleading or that any

relevant information was omitted, CL&P shall submit the

correct or omitted information to the Commissioner.

23. Submission of documents. Any document required to be

submitted to the Commissioner under this Trading

Agreement and Order shall, unless otherwise specified in

writing by the Commissioner, be directed to:

Mr. David Jawin

Department of Environmental Protection

Bureau of Air Management

Compliance and Field Operations Division

Emissions Trading Unit

79 Elm Street

Hartford, Connecticut 06106

Initials: 12 Date:
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8159

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 OF MILFORD LAND RECORDS

MAILED CERTIFIED MAIL, RETURN RECEIPT REQUESTED

Certified Document No.

13