SIP DESCRIPTION PSEG Power Connecticut LLC-Trading Agreement and Order No. 8244 Modification 1 I. SIP

- DESCRIPTION OF DERC CREAnON ANDIORUSE SIP SUMMARYTABLE Trading: Ai"reement and Order No. 8244 Modification 1 PSEG Power ConnecticutLLC 1 Atlantic Street Bridgeport

# cr06604 Identifier 

# I**Clienl~** Town #

### li Premise #

# 45.1 Sequence # 1 Contact Mr. Robert Silvestri Tel: (203) 551-6032 Fax (203) 551-6053 Environmental Qoerations Leader Pollutant and Regulatory Standard: 

### NOx Section 22a-174-22 ofthe Regulations of Connecticut State Agencies. Nonattainment Area Classification Severe Annual DERCs needed Estimated 5 ozone and 1non-ozone. ComolianceTime Period Until Anril 30, 2007. Max. Emission Rate: full load emission rate (FLER) Use. SeeTable 1below):

Table I NOx Emission Rates and Allowable Limits Unit Fuel 

### Maximum StackTest FLER Allowable Date of 

### Next PIR number Capacity (ppmvd) Ibs/MMlltu Rate Stack Stack MMlltulhr IbsIMMlltu Test 

### Test Due Unit 4 #2 oil 287 188 0.73 0.29 4/28/00 4/28/05 Turbine R-0166

T1. SPECIAL REQUIREMENTS

3. 

### This Trading Agreementand OrderModification supersedes Trading Agreement and Order No. 8244 issued on February 13,2003. b. Calculations ofcredits used shall be as specified in Trading Agreement and OrderNo. 8244.

c. 

### PSEG Power Connecticut LLC shall acquire and pennanently retire seven ozone season DERCs for every actual ton ofexcess NOx emitted from the peaking units during the previous ozone season based upon the actual emissions for each day that Connecticut one hour ozone levels were forecasted to be "moderate to unhealthful", "unhealthful", or "very unhealthful".

# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

STATE OF CONNECTICUT AND PSEG POWER CONNECTICUT LLC TRADING AGREEMENT AND ORDER NO. 8244 MODIFICATION NO.1

TRADING AGREEMENT AND ORDER MODIFICATION In the mateer ofaTrading Agreement and Order between the Commissioner ofEnvironmental 

### Protection ("Commissioner") and PSEG Power Connecticut LLC ("PSEG"). WHEREAS, the Commissioner and PSEG, having agreed to the tenns and conditions set 

### forth in Trading Agreement and OrderNo. 8244 signed 

### by the Commissioneron February 13, 2003, do now, by mutual agreement, modify said Trading Agreement and Order as follows: 1. Delete paragraph A.7. and substitute the following therefor: Reserved. 

### 2. Delete the date May 1, 2005, and substitute therefor May 1,2007, in paragraphs C.3. and C.4. 3. Delete paragraph C.3.a. and substitute the following therefor: 

### Have in its possession sufficientapproved DERCs for the current day, based on the following calculations; At all times: 

### Estimated DERCs (in tons) 

## =[«FLER in IbslMMBtu)

- (0.95 x NOx RACT in IbslMMBtu)) x (estimated fuel use in MMBtu)]

.,. 2000 pounds/ton No later than the twentieth day ofeach month, PSEG shall calculate and 

### permanently retire DERCs used in the precedingcalendarmonth, as follows: Actual DERCs (in tons) = 

### [«(FLER in IbslMMBtu)

- (0.95 x NOx RACT in IbslMMBtu)) x (actual fuel use in MMBtu)J .,. 2000 pounds/ton

(Printed on Recycled Paper) 79 Elm Streel • Hartford, cT 06106 - 5127 hItp:/ Idcp.state.Cl.us An Equal Opportunity EmployerPSEG Power ConnecticutliC 

### 2 Trading Agreement and OrderNo. 8244 Modification No.1 During the ozone season onlY: 

### No laterthan December31 s1 

### each year, PSEG shall acquire andpermanentlyretire seven ozone seasonDERCs for every actual ton ofexcess NOx emirredfrom the peaking unitduring the previous ozone season based upon the actual emissions for each day that Connecticut one hourozone levels were forecasted to be "moderate to unhealthful", "unhealthful", or "very unhealthful", until such time that the EPA revokes the l·hour standard. Upon such revocation, PSEG shall calculate and 

### permanentlyretire seven ozone season DERCs for every actual ton ofexcess NOx emitted from the peaking unit during such ozone season based upon the actual 

### emissions foreach day

### thatConnecticuteighthourozone levels were forecasted to 

### be "unhealthy for sensitive groups", "unhealthy", or "very unhealthy". Where: Actual ton of«cess NOx emined 

### = [«(HER in IbslMMBtu)

- (0.95 x NOx RACT in IbslMMBtu)) x (actual fuel use in MMBtu)J 2000 pounds/ton The total actual tons ofexcess NOx emitted from the peaking unit during forecasted ozone exceedance days shall be multiplied by seven and then rounded to the next greater whole ton, to detennine the number ofDERCs to be permanently retired. This requirement is in addition to the PSEG's requirement to estimate excess emissions and subsequentpermanent retirement ofa sufficient numberofapproved DERCs in accordance with paragraph C.3.a. ofthis Trading Agreement and Order. 4. Delete paragraph C.3.b. and substitute the following therefor: During the non·ozone season: Until May 1, 2007, from October 1 through April 30, inclusive, each year, the peaking unit shall, in addition to meeting the 24-hour emission limit in Table 22·1 ofSection 22a-174-22 ofthe Regulations, meet a non-ozone season emission limit of0.15 IbJM:rvfBtu. Prior to October I, 2004, 2005 and 2006, PSEG shall have in its possession sufficient approved DERCs or allowances for the non-ozone season to comply with Section 22a-174-22(e)(3) of the Regulations based on the following calculations. Before the first day ofeach non-ozone season, PSEG shall estimate and acquire DERCs required for such non-ozone season for the peaking unit as follows: Estimated DERCs (tons) use; [Estimated fuel use in Mi\1Btu from October 1 through April 30 x (the 24-hour allowable emission limit in IbslM1v1Btu

- (0.95 x 0.15 IbIMMBtu))J + 2000 Ibslton

### PSEG Power Connecticut LLC 

### 3 Trading Agreement and OrderNo. 8244 Modification No.1



### No laterthan May 31 of2005,2006 and 2007, in addition to the DERCs retired pursuant to paragraph C.3.a. ofthis Trading Agreement and Onder, PSEG shall calculate and permanently retire DERCs used in the preceding non-ozone season as follows:

Actual DERCs (tons) used 

### = [Actual fuel use in MMBtu from October 1 through April 30

### x (the 24-hour allowable emission limitin 

### IbslMMBtu

- (0.95 x 0.15IblMMBtu))J'" 2000 Ibs/ton 

### 5. Delete paragraph C.3.c. and substitute the following therefor: DERC Shortfall. At a minimum, DERCs required shall be adjusted upwards by

100% 

### ifDERCs are not in PSEG's possession for use prior to the first day ofeach month or applicable season. However, nothing in this Trading Agreement and Ordershall affect the Commissioner's authority to institme any proceeding ortake any other action to require additional upward adjusonent, based on the gravity of any alleged noncompliance or violation ofJaw. PSEG shall permanentlyretire the quantity ofDERCs equivalent to the excess emissions plus a 100% premium within 

### sixty (60) days ofPSEG's discovery ofthe DERC shortfall. PSEG shall certify and report any such DERC retirement to the Commissionerin accordance with paragraph C.24. ofthis Trading Agreement and Order. 6. Delete paragraph C.3.d. and substitute the following therefor: Reserved. 7. Delete paragraph C.3.f. and substitute the following therefor: (i) Annual DERC Report. No later than March 1 ofevery year after issuance ofthis Trading Agreement and Order, PSEG shall submit in writing to the Commissioner, a record ofeach sale orothertransfer ofDERCs for the previous calendaryear. PSEG shall also include actual NOx emissions from the peaking unit and the amount ofall DERCs used (including serial numbers (ifassigned) and DERCs purchased from otherfacilities). These reports shall 

### be on forms prescribed by the Commissioner and shall be in monthly increments, and by ozone and non-ozone seasons. (ii)Starting on October 1, 2004: No later than July 30 ofevery year afterissuance ofthis Trading Agreement and Order, PSEG shall submitin writing to the Commissioner the nonvozone season fuel consumption and amount ofall DERCs used (including serial numbers (ifassigned) and approved DERCsPSEG Power Connecticut LLC 4 

### Trading Agreement and OrderNo. 8244 Modification No.1 purchased from other facilities) for the peaking unit during lhe Octoberthrough April time period in the previous calendaryear. These repons shall be on a 

### form prescribed by 

### the Commissioner. 8. Delete paragraph C.3.j. and substitute the following therefor: Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, PSEG may use NO, allowances, until May 1,2007, pursuant to Section 22a-174-22U) ofthe Regulations, to achieve all or a portion ofthe reductions required by Section 22a174-22 ofthe Regulations. Any allowance used for compliance with Section 22a· 174-22(e) ofthe Regulations shall be subject to all restrictions andlorrequirements applicable to DERCs contained in this Trading Agreement and Order. 9. Delete paragraph C.6. and substitute the following therefor: FLER Exceedance. Noncompliance with an establishedFLER shall subject PSEG to make restitution by matching lhe quantity ofemissions ("true up") caused by the exceedance plus a 100% premium. The true up in tons ofDERCs shall be equal to the R..ER exceedance in IbsIMMBtu, multiplied by the total heat input during the period ofnoncompliance divided by 2000 lbs/ton. Ifthe period ofnoncompliance is not known, the time period from the completion ofthe last/previous Commissioner witnessedemission test through the date the R..ER compliance is achieved as approved by the Commissioner shall be used. However, nothing in this Trading Agreement and Ordershall affect the Commissioner's authority to institute any proceeding or take any other action to require additional upward adjustment, based on the gravity ofany alleged noncompliance or violation oflaw. PSEG shall pennanently retire DERCs calculated in accordance with the above plus a 100% premium within sixty (60) days ofPSEG's discovery ofthe FLER exceedance. PSEG shall report any FLER exceedance to the Commissioner in accordance with paragraph C.24. ofthis Trading Agreement and Order. 10. Delete paragraph C.9. and substitute the following therefor: Extension. No later than May I, 2007, with respect to the peaking unit, PSEG shall comply with the requirements ofSections 22a-174-22(d)(1) and 22a-174- 22(d)(2)(A) ofthe Regulations. There is no assurance that after full program review ofthis and otherTrading Agreements and Orders that the Commissioner will grant a written extension ofthis Trading Agreement and Order. 11. Delete paragraph C.Il. and substitute the following therefor: Definitions. As used in this Trading Agreement and Order, "Approved DERCs" are those for which the Commissioner has provided written authorization for use inPSEG PowerConnecticut LLC 

### 5 Trading Agreement and Order No. 8244 Modification No.1 

### compliance with 

### Section 22a-174-22 ofthe Regulations; "Commissioner" means the Commissioner or arepresentative ofthe Commissioner; "Non-olone season" means the period from October 1 through April 30 in any given calendar year; 

### "Ozone season" means the period from May 1 through September 30 in any given 

### calendaryear. 12. Delete paragraph C.I2. and substitute the following therefor: 

### Dates. The date of"issuance" ofthis Trading Agreement and Orderis the date the 

### Trading Agreement and Orderis deposited in the U.S. mail orpersonally delivered, whicheveris earlier. The date ofsubmission to 

### the Commissionerofany document required 

### by this Trading Agreement and Order shall be the date such document is received bythe Commissioner. The date ofany notice by the Commissionerunderthis Trading Agreement and Order, including bur nor limited to notice ofapproval ordisapproval ofany document or other action, shall be the date such notice is deposited in the U.S. mail oris personally delivered, whichever is earlier. Except as otherwise specifiedin this Trading Agreement andOrder, the word "day" as used in this Trading Agreement and Ordermeans calendarday. Any document or action which is required by this Trading Agreement and Orderto be submitted orperformedbyadate which falls on aSaturday, Sunday ora Connecticut orfederal holiday shall be submitted orperformedby the next day which is not a Saturday, Sunday orConnecticutorfederal holiday. 13. Delete the word "individual" and substitute therefor the word "Section" in paragraph C.24. 14. Delete the name "Ms. Wendy Jacobs" from paragraph C.25. 15. Include a new paragraph C.26. as follows: 

### Future Compliance Report. On orbefore September 1, 2006, PSEG shall submit a report in Writing to the Commissioner, as directed in paragraph C.25. ofthis Trading Agreement and Order, indicating how the facility shall comply with Section 22a-174-22 ofthe Regulations with respect to the peaking unit on and after May 1,2007. 

### All otherterms and conditions ofTrading Agreement and Orderno. 8244 issued by the Commissioner acting underChapter446c, Sections 22a-6, 22a-171, 22a-174,**22a~176,** 

### and 22a177 ofthe Connecticut General Statutes shall remain in effect.

### PSEG PowerConnecticutLLC 6 

### Trading Agreementand OrderNo. 8244 Modification No.1 

### PSEG herebyconsents to the entry ofthis modification to the Trading Agreement and Order without further notice.



### Signature: 

### Type Name: TypeTitle: Date: 

### Robert T. Parnell Director of Asset Operations March 10. 2005



### fssued as amodification ofan Orderofthe CommissionerofEnvironmental Protection.



### Date



### MAILED CERTIFlED MAIL,

RETURN RECEIPT REQUESTED

CertifiedDocumentNo. 7002 2030 0006 5643 0079