## STATE OF CONNECTICUT DEPARTMENT OFENVIRONMENTALPROTECTION

In the matter of

The State of Connecticut and

The Connecticut Light and Power Company Trading Agreement and Order No. 8156

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 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-firedboiler on No. 6 fuel oil, Connecticut Registration Number 107-0020, ("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 1979, prior to modifications of the boiler's burner, combustion controls and operating conditions, and based on Department ofEnvironmental Protection approved stack test data, the average annual NOx emission rate for Montville Station Unit 6
was 0.268 pounds permillion British thermal units ("lbs/MMBtu") ofheat input when operating on No. 6

Initials:
(Printedon Recycled Paper) 79 Elm Street • Hartford, CT 06106

-5127 bttp:lldep.sllle.ct.us AnEquCll OpportunityEmployer Date:The Connecticut Light and PowerCompany TradingAgreement and Order No. 8156

fuel oil. On and afterMay 31, 1995, the Regulations ofConnecticut State Agencies ("Regulations") require that the boileremit NOx at a rate no greater than 0.25 lbs/MMBtu ofheat input when operating on No.6 fuel oil.

4. In January 1994, CL&P completedmodifications of the boiler's burner and combustion controls, andbegan 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 enabledCL&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&Pmay obtain approval of actual reductions in NOx emissions, generatedby operating the boiler at a rate which is below 0.25 lbs/MMBtu ofheat input when operating on No. 6 fuel oil for use as emission reduction credits ("ERCs").

6. 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 determinedby actual NOx emissions in the event that the 24-hour average exceeds the NOx emission limitations ofSection 22a-174-22(e) ofthe 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 TradingAgreement and Order, will conformto the requirements of Section 22a-174-22(j) (3) of the Regulations. Specifically, the reductions will be:

Initials: 

### Bealbecause they result in emissions released into the

2 a reduction air, net of

Date:ofactual any

# ,*-J(f'fThe Connecticut Light and Power Company TradingAgreement andOrder No. 8156

consequential increase in actual emissions resulting from shifting demand. The emission reductions are properlymeasured, recorded and reported.

Ouantifiable because they are based on continuous emissionmonitoring data as applied in an appropriate reliable and replicable protocol, providing the rate and total mass amount ofreduction. Surplus because they are not required by any Connecticut statute or regulationmandated by a current State Implementation Plan ("SIpH ), and are not currently relied upon in any applicable attainment plan, any reasonable further progress plan or milestone demonstration.

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

8. As documented inAttachment 1, attached to and incorporated by reference into this TradingAgreement and Order, 296 ERCs were createdby the boilerbetween 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 createdbelow the standards prescribed in Section 22a-174-22a ofthe Regulations (the NOx Budget Program) during 1997 by the boiler and shall be converted into allowances.

9. Ten (10) percent ofthese 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,
Initials: in accordance with

3 the provisions of this

# ~~The Connecticut Light and Power Company TradingAgreement and Order No. 8156

TradingAgreement andOrder, pursuant to Section 22a-174- 22(d)(4) ofthe Regulations, will allow CL&P and approved
sources within Connecticut to use 258 tons ofNOx ERCs referenced in paragraph A.9. ofthis TradingAgreement and Order (128 during the ozone season and 130 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 of additional ERCs by CL&P retrospectively. Approved ERCs createdby CL&Pmaybe 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 ofCL&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. Forpurposes ofgenerating ERCs from the boiler at the facility, CL&P shall use 0.25 lbs/MMBtu ofheat 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-recordedNOx emission rate* or actual fuel usage data for the boiler in MMBtu/day, when determining heat input. Ten (10) percent of all ERCs (tons) createdby the boiler shall be retired by the facility andpermanently removed from all calculations on a daily basis to assure a benefit to the environment.

*This rate shall be calculatedpursuant to the methodology described in 40 Code ofFederal 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) ofthe Regulations oruntil May I, 2003, whichever occurs first. CL&P shall acquire approved ERCs, and document and record the amounts ofNOx emissions and ERCs used

Initials: 4 Date:The Connecticut Light and PowerCompany TradingAgreement and Order No. 8156

by the boilereachmonth, 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 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 fromprevious months can be 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 ofERes used, as follows:
ERCs (tons) {[(CEM-recordedNOx daily average emission rate in lbs/MMBtu)

- ((0.95) x (NOx RACT limit in lbs/MMBtu))] x (actual fuel use in MMBtu)) + 2000 pounds.

Date: 5 Maintaindocumentation to attest to the fact that ERCs usedduring the ozone season were generated during the ozone season. Generator certification 

# <!6f/n d.

Initials:The Connecticut Light and Power Company Trading Agreement and Order No. 8156

ofthis fact shall be sufficient.

e. After full programreview, and ifthe Commissioner deems it appropriate, the Commissionermay allow the survival and use of these ERCs beyondApril 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 ofthe 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 andNOx emission rates (24-hour average), number ofoperating hours per day, and ERCs generated using 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 of any and all ofthe ERCs approved within and subsequent to issuance ofthis 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 ofall 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 prescribedby the Commissioner. This reporting may cease ifa central registry is approved by the Commissioner. Should CL&P choose to discontinue the generation of ERCs, CL&Pwill notify the Commissioner upon discontinuance.

6. In order to considerCEM-recorded NOx emission rates valid for ERC approval, all NOx and COz/OzCEMs must comply with 40 Code of Federal Regulations Part 75.

Initials: 6 Date:The Connecticut Light and PowerCompany Trading Agreement andOrder No. 8156

7. CL&P shall retain records and supporting documentation
as described in this TradingAgreement andOrder for a minimumof 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 ofa written request from the Commissioner.

8. Upon sufficient documentation that CL&P has met the requirements ofparagraphs C.1., C.3, C.4., and C.lO., ofthis TradingAgreement and Order, the Commissioner may provide written approval ofERCs createdby CL&P retrospectively, in addition to those approved in paragraph B. ofthis Trading Agreement 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, whichever occurs first.

9. ShouldCL&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 monthlybasis.

10. When the boiler has daily NOx emissions below the baseline emission rate, CL&P shall calculate the amount ofERCs generated as follows:

ERCs (tons) = {[Total heat inputl ofNo. 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 calculatedusing the lower of CEM-recorded data or actual fuel usage data in MMBtu per unit of fuel combusted.

2This rate shall be calculatedpursuant to the methodology described in 40 Code of Federal Regulations Part 75.

Initials: 7 Date:The Connecticut Light and PowerCompany TradingAgreement andOrderNo. 8156

3 Ten (10) percent ofall ERCs (tons) createdby 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 andOrder, "Commissioner" means the Commissioner ofEnvironmental Protection or an agent of the Commissioner. "Ozone season" means the period fromMay 1 through September 30 in any given calendaryear.
12. Notification ofnoncompliance. In the event that CL&P becomes aware that itdid not ormay not comply, or did not ormay not comply on time, with any requirement ofthis TradingAgreement 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, ifunavoidable, is minimized to the greatest extentpossible. In so notifying the Commissioner, CL&P shall state in writing the reasons for the noncompliance or delay and propose, for the review andwritten approval ofthe Commissioner, dates bywhich compliance will be achieved, and CL&P shall comply with any dates which may be approved in writing by the Commissioner. Notification byCL&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 ofdocuments. Any document, including but not limited to any notice, which is required to be submitted to the Commissionerunder this Trading Agreement andOrder shall be signedby a responsible corporate officerofCL&P or a duly authorized representative ofsuch officer, as those terms are defined in Section 22a-430-3(b)(2) of the Regulations, andby the individual or individuals responsible for actually preparing such document, each ofwhom shall examine andbe familiar with the information submitted in the document and all attachments thereto, and shall make inquiry ofthose individuals responsible for obtaining the information to determine that the

Initials: 8 Date:The Connecticut Light and PowerCompany TradingAgreement andOrder No. 8156

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, including my 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 statement made in the submitted informationmay be punishable as a criminal offense under Section 22a-175 ofthe. Connecticut General Statutes or, in accordance with Section 22a-6 ofthe Connecticut General Statutes, under Section 53a-157b ofthe Connecticut General Statutes, and in accordance with any other applicable statute."
14. Final Aareement andOrder. This TradingAgreement and Order is the final agreement and orderby and between the Commissioner and CL&Pwith 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.

16. Notice oftransfer; liabilityofCL&P and others. Until CL&P has fully compliedwith this Trading Agreement and Order, CL&P shall notify the Commissioner in writing no laterthan fifteen (15) days after transferring all or any portion ofthe facility, the operations, the site or the business which are the subject ofthis Trading Agreement and Order, or obtaining a newmailing or location address. Any license transfer shall be conducted in accordance with Section 22a-60 ofthe Connecticut General

Initials: 9 Date:The Connecticut Light and PowerCompany Trading Agreement andOrderNo. 8156

Statutes. CL&P's obligations under this Trading Agreement andOrder shall not be affected by the passage oftitle 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 andOrder shall affect the Commissioner's authority to institute anyproceeding 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 oflaw 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 ofany permit issuedby the Commissioner. Ifat any time the Commissionerdetermines that the actions taken by CL&P pursuant to this TradingAgreement andOrderhave not fully achieved compliance with Section 22a-174-22 of the 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 and Order 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 Protection may 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 or allowed by this TradingAgreement and Order.
20. No effect on rights ofotherpersons. This Trading Agreemeht andOrder shall neither create nor affect any rights ofpersons who ormunicipalities which are not parties to this Trading Agreement andOrder.

Initials: 10 Date:The Connecticut Light and PowerCompany Trading Agreement and OrderNo. 8156

21. No Creation of Property Rights. This TradingAgreement and Orderdoes not create anyproperty rights with respect to these ERCs.

22. Notice tQ CommissiQner Qfchanges. Within fifteen (15) days ofthe date CL&Pbecomes aware ofa change in any information submitted to the CQmmissiQner under this TradingAgreement andOrder, or that any such infQrmatiQn was inaccurate ormisleading orthat any relevant infQrmation 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 Commissionerunder 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 Field Operations Division Emissions Trading Unit 79 ElmStreet Hartford, Connecticut 06106

Initials: 11 Date:The Connecticut Light and Power Company TradingAgreement 

### andOrder No. 8156

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 ofthe Trading Agreement and Order.

Signature: Type Name: Type Title:

Date: The Connecticut Light**~;I~ower** Company

# Wi1l~1:aL~
VicePresident

April**28~** 1999

Issued as a final consent order ofthe Commissioner of

Environmental Protection on , 1999.

Arthur J. Rocque, Jr. Commissioner



### TOWN OFMONTVILLELANDRECORDS MAILED CERTIFIEDMAIL, RETURN RECEIPT REQUESTED Certified Document No.

12