## STATE OFCONNECTICUT DEPARTMENTOFENVIRONMENTALPROTECTION

In thematter of

The State ofConnecticut and

The Connecticut Light and Power Company Trading Agreement andOrder No. 8162

Whereas, the Commissioner ofEnvironmental Protection ("Commissioner") andThe 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 Middletown Station at 1866 River Road in Middletown, Connecticut {"facility"}. At the facility, CL&P operates Middletown Station Unit 

### 3, a 

### 245 megawatt cyclone boiler on No. 6 fuel oil and/or natural gas, Connecticut Registration Number 104-0100, ("boiler"). Acontinuous emissions monitor ("CEM"), certified to 40 Code of Federal Regulations Part 75, measures nitrogen oxide ("NOx")emissions from the boiler.

3. During the year 1981, prior to modifications ofthe boiler's burner, combustion controls and operating conditions, andpriorto the installation ofnatural gas operating capabilities, and based on Department of Environmental Protection approved stack test data, the average annual NOx emission rate for Middletown Station Unit 3 was 0.876 pounds per million British thermal

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(Printedon Recycled Paper) 79 Elm Street • Hartrord, CT 06106·5127 bttp://dep.state.ct.us AnEqwol OpportunityEmployer Date:The Connecticut Light and Power Company Trading Agreement and Order No. 8162

units ("lbs/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 boiler emit NOx at a rate no greater than 0.43 lbs/MMBtu of heat input when operating on No. 6 fuel oil and 0.43 lbs/MMBtu of heat input when operating on natural gas.

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 rates below its permitted, allowed and actual baseline emission rates. Natural gas operating capabilities were installed at the facility by July, 1997 to provide further reductions of NOx emissions. Such modifications and installation capabilities 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 0.43 1bs/MMBtu of heat input when operating on No. 6 fuel oil and 0.43 lbs/MMBtu of heat input when operating on natural gas for use as emission reduction credits ("ERes")

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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 determinedby 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.

Date: 7.

Initials: When properly Commissioner, documented by CL&P, and the emission reductions

2 

### approved by 

### the identified above, 

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# fir?The Connecticut Light and Power Company Trading Agreement and Order No. 8162

and as computed in accordance with the terms ofthis Trading Agreement 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.

Ouantifiable because they are basedon 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 systemand installation capabilities are inplace and operating, and an appropriate tracking system is inplace 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 ofthe quarterly or semi-annual report that will document theircreation.

8. As documented inAttachment 1, attached to and incorporatedby reference into this Trading Agreement and Order, 288 ERCs were createdby the boiler between November I, 1996 and September 30, 1997 (54 during the
ozone season and 234 during the non-ozone season). This numberofERCs takes into consideration the ten (10) percent environmental discount.

Date: B. The Commissioner,

Initials: in accordance with

3 the provisions ofthis 

# </iLf/ffThe Connecticut Light and PowerCompany Trading Agreement and Order No. 8162

TradingAgreement and Order, pursuant to Section 22a-174- 22(d)(4) ofthe Regulations, will allow CL&P and approved
sources within Connecticut to use 288 tons ofNOx ERCs referenced inparagraphA.8. ofthis Trading Agreement and Order (54 during the ozone season and 234 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 oras emission offsets for new sources. Upon sufficient documentation as prescribedbelow, the Commissionermay provide written approval ofadditional ERCs by CL&P retrospectively. ApprovedERCs createdby CL&Pmay be heldby CL&P or transferred to otherpersons. Such ERCs shall remain validuntil 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-l76, and 22a-177 of the Connecticut General Statutes, orders CL&P as follows:

1. ERe generatioo. Forpurposes ofgenerating ERCs from the boiler at the facility, CL&P shall use 0.43 lbs/MMBtu ofheat input when operating on No. 6 fuel oil and 0.43 lbs/MMBtu ofheat input when operating on natural gas as the baseline emission rate for the boiler. When calculating ERCs, CL&P shall use the lower ofCEM-recordedNOx emission rate* or actual fuel usage data for the boiler inMMBtu/day, when determining heat input. Ten (10) percent of all ERCs (tons) createdby the boiler shall be retiredby the facility andpermanently removed from all calculations
on a daily basis to assure a benefit to the environment.

*This rate shall be calculatedpursuant to themethodology describedin 40 Code ofFederal Regulations Part 75.

Date: 

### 4 2. ERe Use. ApprovedERCs shall be acquired for the period beginning June 1, 1995 and continuing until CL&P achieves permanent compliance for the boiler with the emission standards in Section 22a-174-22(e) ofthe Regulations or until May 1, 2003, whichever occurs

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first. CL&P shall acquire approved ERCs, and document and record the amounts ofNOx emissions and ERCs used by the boiler eachmonth, 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 ofeachmonth, calculate projected worst case ERCs required for the same calendarmonth as follows:

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

- ((0.95) x (NOx RACT limit in 1bs/MMBtu))J x (Estimated fuel use 

### in MMBtu)} " 2000 pounds.

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

c. No later than the twentieth day ofeach 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 ofERCs used, as follows:

ERCs (tons) 

## ={[(CEM-recordedNOx daily average emission rate in lbs/MMBtu)

- ((0.95) x (NOx RACT limit in 1bs/MMBtu))] x (actual fuel use 

### in MMBtu)) " 2000 pounds.

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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 beyondApril 30, 2003.

3. CL&P shall maintain records for the boiler showing daily NOx mass emissions, and actual NOx emission rate (24-hour average). CL&P shall alsomaintain records showing a monthly total ofall ERCs generatednet of the ten (10) percent environmental discount.

4. In requesting ERC approval, CL&P shall provide documentation containing monthly operating reports of actual fuel usage inMMBtu and actual heat input based upon CEM-recordeddata, daily actual NOx mass emissions and NOx emission rates (24-hour average), number of operating hours perday, andERCs generatedusing the baseline emission rate, net ofthe ten (10) percent environmental discount.

5. No later than March 1 ofevery year after issuance of this Trading Agreement and Order, CL&P shall include with the Annual Emission Statement provided 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 Orderuntil all such ERCs have been used. CL&P shall also include actual NOx emissions fromthe boiler, 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 form prescribedby the Commissioner. This reporting may cease ifa central registry is approvedby the Commissioner. Should CL&P choose to discontinue the generation of ERCs, CL&P will notify the Commissioner upon discontinuance.

Date: 6 6. In order to consider CEM-recordedNOx emission rates

# ~r/" Initials:The Connecticut Light and Power Company TradingAgreement and Order No. 8162

valid for ERC approval! all NOx andCO2/02CEMs must comply with 40 Code ofFederal Regulations Part 75.

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

B. Upon sufficient documentation that CL&Phas met the requirements ofparagraphs C.l.! C.3, C.4., and C.lO., of this Trading Agreement and Order, the Commissioner may provide written approval ofERCs createdby CL&P retrospectively, in addition to those approved in paragraph B. ofthis TradingAgreement and Order. Requests for approval ofall subsequent ERCs created shall be submitted in writing to the Commissioner. Approved ERCs createdby CL&Pmay be held or transferred to otherpersons. Such ERCs shall remain valid until they are used oruntil May 1, 2003, whicheveroccurs first.

9. ShouldCL&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 applicable baseline emission rate, CL&P shall calculate the amount ofERCs generated as follows:

ERCs (tons) = {[Total heat inputl ofall fuels inMMBtu

x ((baseline emission rate2) - (the CEM-recordedNOx emission rate3))] + 2000 lbs/ton} x (0.90).4

I Heat input shall be calculatedusing the lowerof CEM-recordeddata or actual fuel usage data inMMBtu per unit offuel cornbusted.

2This rate shall be 0.43 Ibs/MMBtu when operating on No. 6 fuel oil and/or natural gas.

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J This rate shallbe calculatedpursuant to the methodology described in 40 Code ofFederal Regulations Part 75.

, Ten (10) percent of

### all ERes (tons) created by the boiler shall be retiredby the facility andpermanently 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 ofEnvironmental Protection or an agent ofthe Commissioner. "Ozone season" means the period fromMay 1 through September 30 in any given calendar year.

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 TradingAgreement andOrder or ofany document required hereunder, CL&P shall immediately notify the Commissionerand shall take all reasonable steps to
ensure that any noncompliance ordelay is avoided or, ifunavoidable, is minimizedto the greatest extent possible. In so notifying the Commissioner, CL&P shall state in writing the reasons for the noncompliance or delay andpropose, for the review andwritten 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 ordelay unless specifically so statedby the Commissioner in writing.

Date: 8 Certification ofdocuments. Any document, including but not limitedto any notice, which is required to be submitted to the Commissionerunder this Trading Agreement andOrder shall be signedby a responsible corporate officer ofCL&P or a duly authorized representative of such officer, as those terms are defined in Section 22a-430-3{b)(2) ofthe Regulations, andby the individual or individuals responsible for actually preparing such document, each ofwhom shall 

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Initials:The Connecticut Light and Power Company Trading Agreement and Order No. 8162

examine andbe 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 information is true, accurate, and complete, and each ofwhom 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, includingmy inquiry of those 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 53a157b of the Connecticut General Statutes, and in accordance with any other applicable statute."

14. Final Agreement andOrder. This TradingAgreement and Order is the final agreement and orderby andbetween 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 Ordermaybe 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: 9 Notice oftransfer; 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 any portion ofthe facility, the operations, the site or the business which are the subject ofthis TradingAgreement and Order, or obtaining a newmailing or location address. Any 

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Initials:The Connecticut Light and Power Company Trading Agreement and Order No. 8162

license transfer shall be conducted in accordance with Section 22a-60 ofthe Connecticut General Statutes. CL&pts obligations under this Trading Agreement and Order shall not be affectedby the passage of title to any property to any otherperson ormunicipality. Any future owner ofthe facility may be subject to the issuance ofa TradingAgreement 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 oflaw, prevent
or abate pollution, recover costs and natural resource damages, and to impose penalties for violations oflaw which are willful or criminally negligent or for which penalties have not been specificallyprovided 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 by CL&Ppursuant to this Trading Agreement andOrderhave not fUlly achieved compliance with Section 22a-174-22 ofthe Regulations, the Commissionermay 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 andOrder shall relieve CL&P ofother obligations under applicable federal, state and local law.

19. Access to records and facility. Any representative of the Department ofEnvironmental Protectionmay enter and inspect the facility and inspect and copy records within normal business hours without prior notice for the purposes ofmonitoring and enforcing the actions required orallowedby this Trading Agreement and Order.

20. NQ effect on rights ofother persons. This Trading Agreement and Order shall neither create nor affect any rights Qfpersons who ormunicipalities which are not parties tQ this Trading Agreement and Order.

Initials: 10 Date:The Connecticut Light and Power Company Trading Agreement and OrderNo. 8162

21. No Creation of Property Rights. This Trading Agreement and Order does not create any property rights with respect to these ERCs.

22. Notice to COmmissioner ofchanges. Within fifteen (15) days ofthe date CL&Pbecomes aware ofa change in any information submittedto the Commissioner under this TradingAgreement andOrder, 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 and Order shall, unless otherwise specified in writing by the Commissioner, be directed to:

Mr. David Jawin Department ofEnvironmental Protection Bureau ofAirManagement 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. 8162

CL&P consents to the issuance ofthis Trading Agreement and Order without further notice. The undersigned certifies that he/she is fully authorized to enter into this TradingAgreement 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**~wer** Company

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Vice President April 28, 1999

Issued as a final consent order

Environmental Protection on of

1999.

Arthur J. Rocque, Jr. Commissioner

CITY OFMIDDLETOWN LAND RECORDS MAILEDCERTIFIEDMAIL, RETURN RECEIPT REQUESTED Certified Document No.

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