# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

STATE OF CONNECTICUT 

### AND ALGONQUIN POWER WINDSOR LOCKS LLC TRADING AGREEMENT AND ORDER NO. 8261 MODIFICATION NO.1

TRADING AGREEMENT AND ORDERMODIFICATION In the matter ofa Trading Agreement and Orderbetween the CommissionerofEnvironmental Protection ("Commissioner") and Algonquin Power Windsor Locks LLC ("Algonquin"). WHEREAS, the Commissionerand Algonquin, having agreed to the tenns and conditions set forth in Trading Agreement and OrderNo. 8261 issued on April 25, 2005, do now, bymutual agreement, modifyTrading Agreement and OrderNo. 8261 as follows:
I. Delete the date May 1, 2007, and substitute thereforMay 1, 2009, in paragraphs A.4. and

## c.l. 2. Delete paragraph C.2. and substitute the following therefor: DERC use. Starting on October 1, 2004, and until May 1,2009, before the first day ofeach non-ozone season, Algonquin shall have in its possession sufficient approved DERCs for the turbines based on the following:
a. During the non-ozone season: Algonquin shall meet anon-ozone seasonal average emission limit of0.15 IbsIMMBtu. Priorto October I, 2006, October 1, 2007, and October 1,2008, Algonquin shall estimate and acquire the amount ofDERCs or allowances required for such non-ozone season needed to comply with Section 22a-174- 22(e)(3) ofthe Regulations as follows: Estimated DERCs (tons) 

### = [Estimated fuel use in MMBtu from October I through April 30 x (estimated seasonal average NOx emission rate in IbsIMMBtu during October 1 through April 30

- (0.95 x 0.15 IbsIMMBtu))]-i2000 pounds/ton.

( Printed on Recycled Paper) 79 Elm Street • Hartford. CT 06106 - 5127 An Equal 0p{Jorlllllity EmployerAlgonquin PowerWindsorLocks LLC 

### 2 Trading Agreement and Order No. 8261 Modification No. I No laterthan May 31 of2007, 2008, and 2009, when the turbines have anonozone seasonal average actual NOx emission rate exceeding 0.15 Ibs/MMBtu, Algonquin shall calculate and permanently retire the amount ofDERCs used in the preceding non-ozone season as follows: Actual DERCs (tons) = [Actual fuel use in MMBtu from October I through April 30 x (actual seasonal average NOx emissionrate in Ibs/MMBtu during October I through April 30

- (0.95 x 0.15 Ibs/MMBtu»] -i- 2000 pounds/ton. b. When the non-ozone season CEM-recordedNOx emission rate is used to calculate DERCs used by the turbines, Algonquin shall include missing data calculated in accordance with missing data substitution procedures under40 CFRPart 75.
c. Algonquin shall not exceed anyNOx permit limitations forthe turbines. 3. Delete paragraph C.6. and substitute the following therefor: Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, Algonquin may use NOx allowances, until May 1,2009, for the peaking unit pursuantto Section 22a-174-22(j) ofthe Regulations to achieve all or a portion of the reductions required by Section 22a-174-22 ofthe Regulations. Any allowance used for compliance with Section 22a-174-22(e) ofthe Regulations shall be subjectto all restrictions and/orrequirements applicable to DERCs contained in this Trading Agreement and Order;
a. In order for Algonquin to use NOx allowances, Algonquin shall create a general account oruse an existing compliance account oroverdraft 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 orthe facility's NOx compliance account in the NATS to the CT State NOx Retirement Account (Account ill CT0000000300 in the NATS). 4. Delete paragraph C.7. and substitute the following therefor: DERC Shortfall. At a minimum, DERCs required shall be adjusted upwards byAlgonquin PowerWindsor Locks LLC 3 Trading Agreement and Order No. 8261 Modification No.1 100% ifDERCs are not in Algonquin's possession for use priorto the first day of each non-ozone season. However, nothing in this Trading Agreement and Order shall affect the Commissioner's authorityto institute anyproceeding ortake any other action to require additional upward adjustment, based on the gravity ofany alleged noncompliance or violation oflaw. Algonquin shall permanentlyretire the quantity ofDERCs equivalentto the excess emissions plus a 100% premium within (60) days ofAlgonquin's discovery ofthe DERC shortfall. Algonquin shall certify and report any such DERC retirement to the Commissionerin accordance with paragraph C.26. ofthe Trading Agreement and Order. 5. Delete paragraph C.9. and substitute the following therefor: Extension. No laterthan May I, 2009 with respect to the turbines, Algonquin shall comply with the requirements ofSection 22a-174-22(d)(2)(A) ofthe Regulations. There is no assurance that the Commissionerwill grant a written extension ofthis Trading Agreement and Order. 6. Delete paragraph C.I

### O. and substitute the following therefor: Future Compliance Report. On orbefore September I, 2008, Algonquin shall submit a report in writing to the Commissioner, as directed in paragraph C.27. of this Trading Agreement and Order, indicating how the facility shall comply with Section 22a-174-22 ofthe Regulations with respect to the turbines on and after May I, 2009. 7. Delete paragraph C.14. and substitute the following therefor: Definitions. As used in this Trading Agreement and Order, "Approved DERCs" are those for which the Commissionerhas provided written authorization for use in compliance with Section 22a-174-22 ofthe Regulations; "Commissioner" means the Commissioner or arepresentative ofthe Commissioner; "Non-ozone season" means the period from October I through April 30 in any given calendar year. 8. Delete paragraph C.15. and substitute the following therefor: Dates. The date of"issuance" ofthis Trading Agreement and Order is the date the Trading Agreement and Orderis deposited in the U.S. mail orpersonally delivered, whichever is earlier. The date ofsubmission to the Commissioner of any document required by this Trading Agreement and Order shall be the date such document is received by the Commissioner. The date ofany notice bythe Commissionerunder this Trading Agreement and Order, includingbut not limited

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Algonquin PowerWindsorLocks LLC 4 Trading Agreement and Order No. 8261 Modification NO.1 to notice ofapproval ordisapproval ofany document or other action, shall be the date such notice is deposited in the U.S. mail oris personallydelivered, 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. Any document or action which is required bythis Trading Agreement and Orderto be submitted orperformedby a date which falls on a Saturday, Sundayor a Connecticut orfederal holiday shall be submitted orperformedbythe next day which is not a Saturday, Sunday, or Connecticut or federal holiday.
All otherterms and conditions ofTrading Agreement and Orderno. 8261 issued bythe Commissioner acting under Chapter446c, Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a177 ofthe Connecticut General Statutes shall remain in effect.i
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Algonquin PowerWindsorLocks LLC 5 Trading Agreement and Order No. 8261 Modification No. 1 Algonquin hereby consents to the entryofthis modification to the Trading Agreement and Order without further notice. Algonq Signature: Type Name: Type Title: Date: rLocks LLC



### James A. White Plant Manager 9/28/2006 

### r

amodification ofan Orderofthe CommissionerofEnvironmental Protection.

Date

TOWN OF WINDSOR LOCKS MAILED CERTIFIED MAIL, RETURN RECEIPT REQUESTED
Certified DocumentNo. 7004 1160 0002 2804 0546