STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of

The State of Connecticut

and

Pfizer, Inc.

)

I TRADING AGREEMENT AND ORDER NO. 8136

Whereas, the Commissioner ofEnvironmental Protection ("Commissioner") and Pfizer, Inc.

("Pfizer") a~ree that it is in the public interest that they work cooperatively to improve the air

quality withm the State ofConnecticut 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 Pfizer, the Commissioner finds the following:

I.

2.

3.

Pfizer is a corporation which owns and operates a pharmaceutical Broduction

and research facility at Eastern Point Road, Groton, Connecticut (' facility").

At the facility, Pfizer owns and operates six (6) oil and/or natural gas fired steam

boilers ("boilers"), numbered I, 2, 3, 4, 5, and 8. Boilers 4, 5 and 8 are currently

using approved emission reduction credits r'ERCs") under the provisions of

Trading Agreement and Order No. 8093, dated July 19, 1995. Separate

continuous emissions monitors ("CEMs"), certified to 40 Code of Federal

Regulations Part 60, measure nitrogen oxides ("NOx") emissions from each

boiler.

Pursuant to Section 22a-174-22(k) ofthe Regulations of Connecticut State

Agencies ("Regulations"), Pfizer was required to conduct NOx emission tests

and install NOx CEMs on boilers I, 2 and 3 by May 31, 1995. Pursuant to

Section 22a-174-22(k)(5) ofthe Regulations, Pfizer requested an extension to

comply with Section 22a-174-22(k) ofthe Regulations. The Commissioner

allows such extension, pursuant to this Trading Agreement and Order. The

CEM operational trial period for boilers 1,2 and 3 was April 18 through May

31,1996.

5.

4. Boilers 1,2 and 3 were projected to have emitted 297.7 tons per year of NOx

between June I, 1995 and May 31, 1996. Pursuant to Section 22a-I74-22 ofthe

Regulations, the allowable NOx emissions for these same boilers was 236.9 tons

(equivalent to 0.25 pounds per million British thermal units ("lbslMMBtu") of

heat input).

In 1995, Pfizer installed 10w-NOx burners and added natural gas burning

capability to boilers 1,2 and 3, thereby reducing said boilers' NOx emission

rates below their 1994 and 1995 emission rates. Emission reductions achieved

through the installation of 10w-NOx burners and the burning ofnatural gas are

eligible, pursuant to Section 22a-174-220)(3) ofthe Regulations, to be

considered suq>lus emissions reductions for purposes of generating emission

reduction credits ("ERCs").

6. By carefully monitoring and controlling the combustion process of boilers 1,2

and 3, and by burning natural gas, Pfizer has represented that it can minimize

Initials: #/!'L'<:f Date:

/~ (Printed on Recycled Paper)

79 Elm Street • Hartford, CT 06106 - 5127

bttp:lldep.state.ct.us

All Equal OpportunEly Employer
Pfizer, Inc.

2 TRADING AGREEMENT

AND ORDER NO. 8136

7.

8.

9.

10.

Initials:

NOx emissions so that emissions frequently can be kept below the NOx

emission limitations established by Section 22a-174-22(e) ofthe Regulations. In

accordance with the tenus and conditions ofthis Trading Agreement and Order,

Pfizer may obtain approval of actual reductions in NOx emissions generated

through combustion control and burning ofnatural gas for use as ERCs.

Pursuant to Section 22a-174-22G) ofthe Regulations, Pfizer intends both to

acquire and generate approved ERCs until May 1,2003, at the facility.

Approved ERCs are defined for purposes ofthis Trading Agreement and Order

as those for which the Commissioner hasrrovided written authorization for use

in compliance with Section 22a-174-22 0 the Regulations.

Prior to receipt of approval for ERCs generated at the facility, Pfizer has

acquired 115 tons of approved ERCs for use at the facility. Pfizer will continue

to acquire ERCs on an as-needed basis. Pfizer will provide an accounting of

actual NOx emissions to the Department ofEnvironmental Protection eDEP"),

based on data recorded by the CEMs pursuant to paragraph D.6. ofthis Trading

Agreement and Order.

Ten (10) percent ofthe ERCs generated at the facility shall be retired and

permanently removed from all calculations to assure a benefit to the

environment.

When properly documented by Pfizer, and approved by the Commissioner, the

emission reductions identified above, and as computed in accordance with the

terms ofthis Trading Agreement and Order, will confonn to the requirements of

Section 22a-174-22U) (3) ofthe Regulations. Specifically, the reductions will

be:

E&iU because they will result in a reduction of actual emissions released into

the air, net of any consequential increase in actual emissions resulting from

shifting demand. The emission reductions will be properly measured, recorded

and reported.

Quantifiable because they are based on CEM 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), and are not currently

relied upon in any applicable attainment plan, any reasonable further progress

plan or milestone demonstration.

Permanent because the 10w-NOx burners will be in place and operating, and an

appropriate tracking system is in place to monitor all data required to verify and

quanllfy the creation ofERCs.

Enforceable because the ERCs are approved by the Commissioner

Date:~
Pfizer, Inc.

3 TRADING AGREEMENT

AND ORDER NO. 8136

11.

retrospectively after the submission by Pfizer ofa report that documents their

creation.

The emissions trading baseline ("baseline emission rate") for boilers I, 2 and 3

is 0.25 1bsIMMBtu of heat input when operating on No.6 fuel oil and 0.20

IbsIMMBtu ofheat input when operating on natural gas. Said baseline emission

rates are based on the following approved stack tests.

Boiler No. Stack Test Emission Rate Date Tested

(lbs/MMBtu)

1 Natural Gas 0.09 12/17/96

No.6 Fuel Oil 0.25 5/16/96

2 Natural Gas 0.07 12/18/96

No.6 Fuel Oil 0.25 5/16/96

3 Natural Gas 0.08 5121/96

No.6 Fuel Oil 0.25 4/30/96

12.

13.

B.

As documented in Attachment 1, attached to and incorporated by reference into

this Trading Agreement and Order, 96.3 ERCs were created by boilers 1,2 and 3

between May 31,1996 and September 30,1998 (66.6 during the ozone season

and 29.8 during the non-ozone season).

Ten (10) percent ofthese ERCs (9.6) are retired and permanently removed from

all calculations to assure a benefit to the environment, leaving 87 ERCs

available for use (60 ozone season and 27 non-ozone season).

The Commissioner, in accordance with the provisions ofthis Trading Agreement and

Order, pursuant to Sections 22a-174-22(d)(4) and 22a-174-220) ofthe Regulations, will

allow approved sources within Connecticut to use 87 tons ofNOx ERCs described in

paragraph A.13. ofthis Trading Agreement and Order (60 during the ozone season and

27 during the non-ozone season) for purposes ofcompliance under Section 22a-174-

220) and/or 22a-174-3(1)(5) ofthe Regulations to achieve a portion ofthe nitrogen

oxide emission reductions required or as emissions offsets for new sources.

Upon sufficient documentation as prescribed below, the Commissioner may provide

written approval of additional ERCs by Pfizer retrospectively. Approved ERCs created

by Pfizer may be held by Pfizer or transferred to other persons. Such ERCs shall

remain valid until they are used or until May I, 2003, whichever occurs first.

C. The Commissioner, in accordance with the provisions ofthis Trading Agreement and

Order, and pursuant to Section 22a-174-220) ofthe Regulations, hereby allows Pfizer to

use approved ERCs, as necessary, to achieve the nitrogen oxide emission reduction

Initials:a Date:
Pfizer, Inc.

4 TRADING AGREEMENT

AND ORDER NO. 8136

required by Section 22a-174-22(d)(2) ofthe Regulations.

D. With the agreement of Pfizer, the Commissioner, acting under Sections 22a-6, 22a-171,

22a-174, 22a-176, and 22a-l77 ofthe Connecticut General Statutes, orders Pfizer as

follows:

I. ERC generation. For purposes of generating ERCs from boilers 1, 2 and 3 at the

facilio/., Pfizer shall use 0.25 IbsIMMBtu of heat input when operating on No.6

fuel 011 and 0.20 IbsIMMBtu of heat input when operating on natural gas as the

baseline emission rates for boilers I, 2, and 3J or the proportioned baseline

emission rate set forth in footnote 1 of paragraph D.Z. ofthis Trading Agreement

and Order, when simultaneously operating on more than one fuel. Pfizer shall

use the above referenced baseline emission rate(s) when calculating the

proportioned baseline emission rate. When calculating ERCs, Pfizer shall use

CEM-recorded NOx emission rates· for each boiler and actual fuel use for each

boiler in MMBtuJday, when determining heat input. Ten (10) percent of all

ERCs (tons) created by the boilers shall be retired by the facility and

permanently removed from all calculations to assure a benefit to the

environment.

*These rates shall be calculated pursuant to the methodology described in 40 Code of

Federal Regulations Part 60.

2. When the boilers have daily NOx emissions below the applicable baseline

emission rate(s), or theproportioned baseline emission rate, Pfizer shall

calculate the amount ofERCs generated, as follows:

ERCs generated (tons) [Total heat input of all fuels in MMBtu x (proportioned

baseline emission ratel - the CEM-recorded NOx emission rat") -;- 2000

pounds/ton] x (0.90).'

lThis rate shall be calculated by 1) multiplying the heat input of each fuel

combusted by the baseline emission rate(s) for such fuel; 2) summing those

products; and 3) dividing the sum by the total heat input. Ifthe boilers are

operating exclusively on one fuel, Pfizer may replace the proportioned baseline

emission rate with the applicable emission rate for that fuel.

lThis rate shall be calculated pursuant to the methodology described in 40 Code

ofFederal Regulations Part 60.

'Ten (10) percent of all ERCs (tons) created by the boilers shall be retired by the

facility and permanently removed from all calculations on a daily basis to assure

a benefit to the environment.

3. In order to consider a Daily NOx Averaging Period valid for ERC approval, it

must contain valid data hours for seventy·five percent (75%) ofthe operating

hours in that daily period (example: minimum 18 valid hours for a full 24-hour

operating day; minimum 12 hours for 16 operating hours, etc.). A Daily NOx

Initials: Date: ¢¢f
Pfizer, Inc.

5 TRADING AGREEMENT

AND ORDER NO. 8136

Initials:

4.

5.

6.

7.

8.

9.

Averaging Period is defined as the total of all operating hours in a day during

which fuel is being fed to each boiler.

Additionally, for a data hour to be considered a valid hour, seventy-five percent

(75%) minimum data capture requirements must be met for each one-hour block

period. All NOx and CO,IO, CEMs must comply with the 40 CFR Part 60

Appendix F drift criteria.·

Pfizer shall maintain records for each boiler showing daily NOx mass emissions,

and actual NOx emission rates (24-hour average). Pfizer shall also maintain

records showing a monthly total of all ERCs generated net ofthe ten (10)

percent environmental discount.

In requesting ERC approval, Pfizer shall provide documentation containing

monthly operating reports of actual fuel usage in MMBtu, daily actual NOx

mass emissions and NOx emission rates (24-hour average), number of invalid

data hours in each 24-hour period, number of operating hours per day, and ERCs

generated using the baseline emission rate(s), or the proportioned baseline

emission rate, net ofthe ten (10) percent discount.

No later than March 1 of every year after issuance ofthis Trading,Agreement

and Order, Pfizer 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

ofthe ERCs approved within and subsequent to issuance ofthis Trading

Agreement and Order until all such ERCs have been used. Pfizer shall also

include actual NOx emissions from the boilers and the amount of all ERCs used

(including approved ERCs generated at and/or purchased from other facilities)

generated andlor approved for the previous calendar year. These reports shall be

on a form prescribed by the Commissioner and shall be in monthly Increments.

This reporting may cease if a central registry is approved by the Commissioner.

Should Pfizer choose to discontinue the generation ofERCs, Pfizer will notify

the Commissioner upon discontinuance.

Upon sufficient documentation that Pfizer has met the requirements of

paragraphs D.l., D.Z., D.3., D.4., and D.S. ofthis Trading Agreement and Order,

the Commissioner may provide written approval of ERCs created by Pfizer

retrospectively, in additIon to those approved in paragraph B. ofthis Trading

Agreement and Order. Requests for approval of all subsequent ERCs created

shall be submitted in writing to the Commissioner. Approved ERCs created by

Pfizer 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.

Should Pfizer 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.

ERC use. Approved ERCs shall be acquired for the period beginning June I,

1995 and continuing until Pfizer achieves permanent compliance for boilers 1, 2

Date:~1
Pfizer, Inc.

6 TRADING AGREEMENT

AND ORDER NO. 8136

and 3 with the emission standards in Section 22a-174-22(e) ofthe Regulations

or until May 1,2003, whichever occurs first. Pfizer shall acquire approved

ERCs, and document, summarize and record the daily amounts ofNOx

emissions and ERCs used by each 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:

Initials: ({/.a

a.

b.

c.

d.

For the period June 1, 1995 through May 31, 1996, Pfizer shall purchase

72.8 tons ofERCs. Pfizer shall purchase and retire an additional 35% of

ERCs (25.5) acquired after December 31, 1995 and until May 31, 1996,

which were required from the period between June 1, 1995 and the date

of purchase (May 30, 1996);

Before the first day of each month after May 31, 1996, calculate

projected worst case ERCs required for the same month as follows:

ERCs (tons) {(Full load emission rate ("FLER") IbslMMBtu - [(0.95)

x (allowable emission limit in Section 22a-174-22 ofthe Regulations or

proportioned emission rate calculated pursuant to Section 22a-l 74-

22(f)(2)(A) ofthe Regulations in IbslMMBtu)]) x (Estimated fuel use in

MMBtu)} + 2000 pounds.

Acquire sufficient approved ERCs no later than the first of each month to

assure compliance for, at a minimum, that month. Excess ERCs from

previous months can be applied to subsequent months. ERCs required

shall be adjusted upwards by 100% ifERCs are not in Pfizer's

possession prior to use, with the exception ofthose ERCs referenced in

paragraph D.9.a. ofthis Trading Agreement and Order.

No later than the twentieth day of each month, calculate ERCs used in

the preceding month, as follows:

I) For each boiler on each day, detennine whether the 24-hour

average NOx emission rate* exceeds the allowable emission limit

in Section 22a-174-22 ofthe Regulations.

2) For each boiler with daily NOx emissions exceeding the

allowable emission limit in Section 22a-174-22 ofthe

Regulations, calculate the amount ofERCs required, as follows:

ERCs required (tons) {«CEM-recorded NOx daily average emission

rate in IbslMMBtu*) - [(0.95) x (allowable emission limit in Section

22a-174-22 ofthe Regulations or proportioned emission rate calculated

pursuant to Section 22a-174-22(f)(2)(Al ofthe Regulations in

IbsIMMBtu)]) x (actual fuel use in MM'Btu)} + 2000 pounds.

*This rate shall be calculated pursuant to the methodology described in 40

Date:n?
Pfizer, Inc.

7 TRADING AGREEMENT

AND ORDER NO. 8136

Code of Federal Regulations Part 60.

e. Document and record daily and monthly NOx emissions and ERCs used.

f. Maintain documentation to attest to the fact that ERCs used during the

ozone season were generated during the ozone season. The ozone season

is from May 1 through September 30 in any calendar year. Generator

certification ofthis fact shall be sufficient.

g. After full program review, and ifthe Commissioner deems it appropriate.

the Commissioner may allow the survival and use ofthese ERCs beyond

April 30, 2003.

10. Pfizer shall retain records and supportin~ documentation as described in this

Trading Agreement and Order for a mimmum offive years, commencing on the

date such records were created. Pfizer shall provide the records specified above

to the Commissioner within thirty (30) days ofreceipt of a written request from

the Commissioner.

11. Provided that all conditions ofthis Trading Agreement and Order are met, and

prior to May 1,2003, Pfizer shall comply during operation of each boiler with a

full load emission rate limitation of 0.366 IbsIMMBtu heat input, averaged on a

24-hour basis.

12. No later than May 1,2003, Pfizer shall comply with the requirements of Section

22a-174-22(d)(2) ofthe Regulations unless this Trading Agreement and Order is

otherwise extended by the Commissioner.

13. As used in this Trading Agreement and Order, "Commissioner" means the

Commissioner ofEnvironmental Protection or an agent ofthe Commissioner.

14. Notification ofooncompliance. In the event that Pfizer becomes aware that it

did not or may not comply, or did not or may oot comply on time, with any

requirement ofthis Trading Agreement and Order or of any document required

hereunder, Pfizer 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 notifyin~ the

Commissioner, Pfizer shall state in writing the reasons for the noncomplIance or

delay and propose, for the review and written approval ofthe Commissioner,

dates by which compliance will be achieved, and Pfizer shall comply with any

dates which may be approved in writing by the Commissioner. Notification by

Pfizer 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.

15. Certification ofdocumeots. 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 the chief executive officer of

Initials: !2f1l- Date:~
Pfizer, Inc.

8 TRADING AGREEMENT

AND ORDER NO. 8136

16.

17.

18.

19.

[nitials: cdtIPfizer or a duly authorized representative ofsuch officer, as those terms are

defined in Section 22a-430-3(b)(2) ofthe Regulations, and by the individual or

individuals responsible for actually preparing such document, each ofwhom

shall examine and be familiar with the mformation submitted in the document

and all attachments thereto and shall make inquiry ofthose individuals

responsible for obtaining the information to determine that the 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. includin~ my inquiry ofthose individuals responsible for

obtaining the information. the submitted information is true. accurate and

complete to the best ofmy knowledge and belief. 1understand that any false

statement made in the submitted infonnation may 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. II

Final Agreement and Order. This Trading Agreement and Order is the final

agreement and order by and between the Commissioner and Pfizer with respect

to the matters addressed herein, and shall not be modified without the written

agreement of both parties.

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 ofthe Connecticut General Statutes or. in accordance

with Section 22a-6, under Section 53a-157b ofthe Connecticut General Statutes.

Notice of transfer: liability of Pfizer and others. Until Pfizer has fully complied

with this Trading Agreement and Order, Pfizer shall notify the Commissioner in

writing no later than fifteen (15) days after transferring alf or any portion ofthe

operations, the facility. the site or the business which are the subject ofthis

Trading Agreement and Order, or obtaining a new mailing or location address.

Any license transfer shall be conducted in accordance with Section 22a-60 ofthe

Connecticut General Statutes. Pfizer's obligations under this Trading Agreement

and Order shall not be affected by the passage oftitle to any property to any

other person or municipality. Any future owner ofthe facility may be subject to

the issuance of a Trading Agreement and Order from the Commissioner.

Commissioner's powers. Nothin~ in this Trading Agreement and Order shall

affect the Commissioner's authonty 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 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

Date:~
Pfizer, Inc.

9 TRADING AGREEMENT

AND ORDER NO. 8136

20.

21.

22.

23.

24.

25.

Initials:

the Commissioner determines that the actions taken by Pfizer pursuant to this

Trading Agreement and Order have not fully achieved compliance with Section

22a-174-22 ofthe Regulations, the Commissioner may institute any proceeding

against Pfizer to undertake further investigation or further action.

Pfizer's obligations under law. Nothing in this Trading Agreement and Order

shall relieve Pfizer of other obligations under applicable federal, state and local

law. '

Access to records and facility. Any representative ofthe 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

ofmonitoring and enforcing the actions required or allowed by this Trading

Agreement and Order.

No effect on rights of other persons, This Trading Agreement and Order shall

neither create nor affect any rights of persons who or municipalities which are

not parties to this Trading Agreement and Order.

No Creation of Property Rights. This Trading Agreement and Order does not

create any property rights with respect to these ERCs.

Notice to Commissioner of cban£:es. Within fifteen (15) days of the date Pfizer

becomes aware of a change in any information submitted to the Commissioner

under this Trading Aweement and Order, or that any such information was

inaccurate or misleadmg or that any relevant information was omitted, Pfizer

shall submit the correct or omitted information to the Commissioner.

Submission of documents. Any document required to be submitted to the

Commissioner under this Trading A~reement and Order shall, unless otherwise

specified in writing by the CommiSSioner, be directed to:

Ms. Wendy Jacobs

Department ofEnvironmental Protection

Bureau ofAir Management

Compliance and Field Operations Division

Emissions Trading Unit

79 Elm Street

Hartford, Connecticut 06106

Date: ~1
Pfizer, Inc.

10 TRADING AGREEMENT

AND ORDER NO. 8136

Pfizer 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 Trading Agreement

and Order and to legally bind Pfizer to the teons and conditions ofthe Trading Agreement and

Order.

. Pfizer, I~!11

SIgnature: ~,~ Type Name: Edward L. Brennan

Type Title: Manager. Env. t Health & Safety

J. Rocque, Jr.

e issioner

Date: Apr; 1 28, 1999

a final consent order ofthe Commissioner ofEnvironmental Protection on

_-'---J1f,P"","~~L- , 1999 .

CITY OF GROTON

LAND RECORDS

MAlLED CERTIFIED MAIL,

RETIJRN RECEIPT REQUESTED

Certified Document No.