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. 8156

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 Montville Station at 74 Lathrop Road in Montville,

Connecticut ("facility"). At the facility, CL&P

operates Montville Station Unit 6, a 410 megawatt

tangentially-fired boiler on No. 6 fuel oil,

Connecticut Registration Number 107-0020, ("boiler").

A continuous emissions monitor ("CEM"), certified to

40 Code of Federal Regulations Part 75, measures

nitrogen oxide ("NOx")emissions from the boiler.

3. During the year 1979, prior to modifications of the

boiler's burner, combustion controls and operating

conditions, and based on Department of Environmental

Protection approved stack test data, the average

annual NOx emission rate for Montville Station Unit 6

was 0.268 pounds per million British thermal units

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

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(Printed on Recycled Paper)

79 Elm Street • Hartford, CT 06106 - 5127

bttp:lldep.sllle.ct.us

An EquCll Opportunity Employer

Date:
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8156

fuel oil. On and after May 31, 1995, the Regulations

of Connecticut State Agencies ("Regulations") require

that the boiler emit NOx at a rate no greater than

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

fuel oil.

4. In January 1994, CL&P completed modifications of the

boiler's burner and combustion controls, and began to

test and adjust operating conditions, thereby reducing

the boiler's NOx emission rate below its permitted,

allowed and actual baseline emissions rate. Such

modifications enabled CL&P's boiler 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 boiler at a rate which is below 0.25

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

oil for use as emission reduction credits ("ERCs").

6. 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

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:

Initials:

Beal because they result in

emissions released into the

2

a reduction

air, net of

Date:

of actual

any

,*-J(f'f
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8156

consequential increase in actual emissions resulting

from shifting demand. The emission reductions are

properly measured, recorded and reported.

Ouantifiable 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 H ), and are not

currently relied upon in any applicable attainment

plan, any reasonable further progress plan or

milestone demonstration.

Permanent because the advanced control system is 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.

8. As documented in Attachment 1, attached to and

incorporated by reference into this Trading Agreement

and Order, 296 ERCs were created by the boiler between

November 1, 1996 and September 30, 1997 (151 during

the ozone season and 145 during the non-ozone season).

Of the 151 ozone season ERCs, 8 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 boiler and

shall be converted into allowances.

9. Ten (10) percent of these ERCs (30) are retired and

permanently removed from all calculations to assure a

benefit to the environment, leaving 258 ERCs available

for use (128 ozone season and 130 non-ozone season).

Date:

B. The Commissioner,

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in accordance with

3

the provisions of this

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The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8156

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 258 tons of NOx ERCs

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

Order (128 during the ozone season and 130 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 I, 2003, whichever occurs first.

C. With the agreement of CL&P, the Commissioner, acting under

Sections 22a-6, 22a-l71, 22a-174, 22a-176, and 22a-177 of

the Connecticut General Statutes, orders CL&P as follows:

1. ERC generation. For purposes of generating ERCs from

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

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

oil as the baseline emission rate for the boiler.

When calculating ERCs, CL&P shall use the lower of

CEM-recorded NOx emission rate* or actual fuel usage

data for the boiler in MMBtu/day, when determining

heat input. Ten (10) percent of all ERCs (tons)

created by the boiler 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 I, 1995 and continuing until

CL&P achieves permanent compliance for the boiler with

the emission standards in Section 22a-174-22{e) of the

Regulations or until May I, 2003, whichever occurs

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

and record the amounts of NOx emissions and ERCs used

Initials: 4 Date:
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8156

by the boiler 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 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. ERCs required shall be adjusted upwards

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

prior to use.

c. No later than the twentieth day of each month,

calculate ERCs used in the preceding calendar

month, as follows:

(1) For the boiler 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 boiler has a daily NOx emission

rate (24-hour average) exceeding the NOx

RACT limit, calculate the amount of ERes

used, as follows:

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

average emission rate in lbs/MMBtu) -

((0.95) x (NOx RACT limit in lbs/MMBtu))] x

(actual fuel use in MMBtu)) + 2000 pounds.

5 Date:

Maintain documentation to attest to the fact that

ERCs used during the ozone season were generated

during the ozone season. Generator certification

<!6f/n

d.

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The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8156

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 boiler 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 ERe approval, CL&P shall provide

documentation containing monthly operating reports of

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, 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 boiler, 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 COz/Oz CEMs must

comply with 40 Code of Federal Regulations Part 75.

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The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8156

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.

8. Upon sufficient documentation that CL&P has met the

requirements of paragraphs C.1., C.3, C.4., and C.lO.,

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

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 boiler has daily NOx emissions below the

baseline emission rate, CL&P shall calculate the

amount of ERCs generated as follows:

ERCs (tons) = {[Total heat inputl of No. 6 fuel oil in

MMBtu x ((0.25 lbs/MMBtu) - (the CEM-recorded NOx

emission rate'))} 7 2000 lbs/ton) x (0.90).'

where:

1 Heat input shall be calculated using the lower of

CEM-recorded data or actual fuel usage data in MMBtu

per unit of fuel combusted.

2 This rate shall be calculated pursuant to the

methodology described in 40 Code of Federal

Regulations Part 75.

Initials: 7 Date:
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8156

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

boiler shall be retired by the facility and

permanently removed from all calculations on a daily

basis to assure a benefit to the environment.

11. As used in this Trading Agreement and Order,

"Commissioner" means the Commissioner of Environmental

Protection or an agent of the Commissioner. "Ozone

season" 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 of documents. Any document, including

but not limited to any notice, which is required to be

submitted to the Commissioner under this Trading

Agreement and Order shall be signed by a responsible

corporate officer of CL&P or a duly authorized

representative of such officer, as those terms are

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

and by the individual or individuals responsible for

actually preparing such document, each of whom shall

examine and be familiar with the information submitted

in the document and all attachments thereto, and shall

make inquiry of those individuals responsible for

obtaining the information to determine that the

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The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8156

information is true, accurate, and complete, and each

of whom shall certify in writing as follows:

"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 Aareement 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.

16. 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

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The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8156

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.

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 on rights of other persons. This Trading

Agreemeht and Order shall neither create nor affect

any rights of persons who or municipalities which are

not parties to this Trading Agreement and Order.

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The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8156

21. No Creation of Property Rights. This Trading Agreement

and Order does not create any property rights with

respect to these ERCs.

22. Notice tQ CommissiQner Qf changes. Within fifteen

(15) days of the date CL&P becomes aware of a change

in any information submitted to the CQmmissiQner under

this Trading Agreement and Order, or that any such

infQrmatiQn was inaccurate or misleading or that any

relevant infQrmation 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: 11 Date:
The Connecticut Light

and Power Company

Trading Agreement

and Order No. 8156

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~ower Company

Wi1l~1:aL~ Vice President

April 28~ 1999

Issued as a final consent order of the Commissioner of

Environmental Protection on , 1999.

Arthur J. Rocque, Jr.

Commissioner

TOWN OF MONTVILLE LAND RECORDS

MAILED CERTIFIED MAIL, RETURN RECEIPT REQUESTED

Certified Document No.

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