## STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matterof The State ofConnecticut 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 ofemissionreduction trading will achieve this result in atimely and cost-effective manner: A. At the request and with the agreement ofPfizer, the Commissioner finds the following: I.

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3. Pfizer is acorporation which owns and operates apharmaceutical 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 OrderNo. 8093, dated July 19, 1995. Separate continuous emissions monitors ("CEMs"), certified to 40 Code ofFederal Regulations Part 60, measure nitrogen oxides ("NOx") emissions from each boiler. Pursuant to Section 22a-174-22(k) ofthe Regulations ofConnecticut State Agencies ("Regulations"), Pfizerwas required to conductNOx emission tests and install NOx CEMs on boilers I, 2 and 3 by May 31, 1995. Pursuantto 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 peryear ofNOx 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 permillion 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 of10w-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 ofgenerating emission reduction credits ("ERCs"). 6. By carefully monitoring and controlling the combustion process ofboilers 1,2 and 3, and by burning natural gas, Pfizer has represented that it can minimize
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# /~ (Printed on Recycled Paper) 79 Elm Street • Hartford, CT 06106 - 5127 bttp:lldep.state.ct.us All Equal OpportunEly EmployerPfizer, Inc. 2 TRADING AGREEMENT AND ORDER NO. 8136

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Initials: NOx emissions so that emissions frequently can 

### be kept belowtheNOx emission limitations established by Section 22a-174-22(e) ofthe Regulations. In accordance with the tenus and conditions ofthis Trading Agreement and Order, Pfizermay obtain approval ofactual reductions inNOx emissions generated through combustioncontrol 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 ofapproval for ERCs generated atthe facility, Pfizerhas acquired 115 tons ofapproved ERCs for use at the facility. Pfizer will continue to acquire ERCs on an as-needed basis. Pfizerwill provide anaccounting of actual NOx emissions to the DepartmentofEnvironmental 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 atthe facility shall be retired and permanently removed from all calculations to assure abenefit 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 areduction ofactual emissions released into the air, net ofany 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 notrequired by any Connecticut statute or regulation mandated by acurrent 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 10w-NOx burners will be inplace and operating, and an appropriate tracking system is inplace to monitor all data required to verify and quanllfy the creation ofERCs. Enforceable because the ERCs are approved by the Commissioner

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### TRADING AGREEMENT AND ORDERNO. 8136

11. retrospectively afterthe submission by Pfizerofareport that documents their creation. The emissions trading baseline ("baseline emissionrate") for boilers I, 2 and 3 

### is 0.25 1bsIMMBtu ofheat input when operating onNo.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

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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 abenefit 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 

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### NOxERCs 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 oras emissions offsets for new sources. Upon sufficient documentation as prescribed below, the Commissionermay provide written approval ofadditional ERCs by Pfizerretrospectively. Approved ERCs created 

### by Pfizermay be held by Pfizerortransferred to otherpersons. Such ERCs shall remainvalid 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 Pfizerto use approved ERCs, as necessary, to achieve the nitrogen oxide emission reduction


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# a Date:Pfizer, Inc. 4 TRADINGAGREEMENT AND ORDERNO. 8136
required by Section22a-174-22(d)(2) ofthe Regulations. D. With the agreementofPfizer, 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. Forpurposes ofgenerating ERCs from boilers 1, 2 and 3 at the facilio/., Pfizershall use 0.25 IbsIMMBtu ofheat input when operating on No.6 fuel 011 and 0.20 IbsIMMBtu ofheat inputwhen operating onnatural gas as the baseline emission rates for boilers I, 2, and 3J or the proportioned baseline emission rate set forth in footnote 1 ofparagraph D.Z. ofthis Trading Agreement and Order, when simultaneously operating on more 

### thanone 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-recordedNOxemission rates· for each boiler and actual fuel use for each boiler in MMBtuJday, when determining heat input. Ten (10) percent ofall ERCs (tons) created by the boilers shall be retired by the facility and permanently removed from all calculations to assure abenefit 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 belowthe applicable baseline emission rate(s), ortheproportioned baseline emission rate, Pfizer shall calculate the amount ofERCs generated, as follows: ERCs generated (tons) [Total heat input ofall 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 ofeach 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 ofall ERCs (tons) created by the boilers shall be retired by the facility and permanently removed from all calculations on adaily basis to assure abenefit to the environment. 3. Inorderto consider aDailyNOx 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: 

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### 9. Averaging Period is defined as the total ofall operating hours in a day during which fuel is being fed to each boiler. Additionally, for a datahourto be considered avalid 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.· Pfizershall maintain records for each boilershowing daily NOx mass emissions, and actual NOx emission rates (24-houraverage). Pfizer shall also maintain records showing amonthly total ofall ERCs generated net ofthe ten (10) percent environmental discount. In requesting ERC approval, Pfizershall provide documentation containing monthly operating reports ofactual fuel usage in MMBtu, daily actual NOx mass emissions andNOx emission rates (24-hour average), number ofinvalid data hours in each 24-hourperiod, number ofoperating 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 ofevery year after issuance ofthis Trading,Agreement and Order, Pfizer shall include withthe Annual Emission Statementprovided to the Commissioner, arecord ofeach sale orothertransfer, and use ofany and all ofthe ERCs approved within and subsequent to issuance ofthis Trading Agreement and Orderuntil all such ERCs have been used. Pfizer shall also include actual NOx emissions from the boilers andthe amount ofall ERCs used (including approved ERCs generated at and/orpurchased from other facilities) generated andlorapproved for the previous calendaryear. These reports shall be on a form prescribed by the Commissionerand shall be in monthly Increments. This reporting may cease ifacentral registry is approved by the Commissioner. Should Pfizer choose to discontinue the generation ofERCs, Pfizer will notify the Commissionerupon 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 Commissionermay provide written approval ofERCs created by Pfizer retrospectively, in additIonto 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 created by Pfizer may be held ortransferred to other persons. Such ERCs shall remain valid until they are used oruntil May 1,2003, whichever occurs first. Should Pfizerchoose to generate additional ERCs, reports documenting these ERCs may be submitted on aquarterly or semi-annual basis. Such reports shall be compiled on amonthly basIS. ERC use. Approved ERCs shall be acquired for the period beginning June I, 1995 and continuing until Pfizerachieves permanent compliance for boilers 1, 2

# Date:~1Pfizer, Inc. 6 TRADING AGREEMENT AND ORDERNO. 8136

and 3 with the emission standards in Section 22a-174-22(e) ofthe Regulations or until May 1,2003, whichever occurs first. Pfizershall acquire approved ERCs, and document, summarize and record the daily amounts ofNOx emissions and ERCs used by each 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:

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d. Forthe 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 ofpurchase (May 30, 1996); Before the first day ofeach 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-l74- 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 ofeach month to assure compliance for, at aminimum, 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 possessionpriorto use, with the exception ofthose ERCs referenced in paragraph D.9.a. ofthis Trading Agreement and Order. No later than the twentieth day ofeach month, calculate ERCs used in the preceding month, as follows: I) For each boiler on each day, detennine whetherthe 24-hour average NOx emission rate* exceeds the allowable emission limit in Section 22a-174-22 ofthe Regulations. 2) Foreach 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 orproportioned emissionrate 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 ORDERNO. 8136

Code ofFederal 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 calendaryear. Generator certification ofthis fact shall be sufficient. g. After full program review, and ifthe Commissionerdeems it appropriate. the Commissionermay allow the survival and use ofthese ERCs beyond April 30, 2003. 10. Pfizershall retain records and**supportin~** documentation as described in this Trading Agreement and Order for amimmum offive years, commencing on the date such records were created. Pfizer shall provide the records specified above to the Commissionerwithin thirty (30) days ofreceipt ofa 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 ofeach boiler with a full load emission rate limitation of0.366 IbsIMMBtu heat input, averaged on a 24-hourbasis. 12. No laterthan May 1,2003, Pfizer shall comply with the requirements ofSection 22a-174-22(d)(2) ofthe Regulations unless this Trading Agreement and Order is otherwise extended by the Commissioner. 13. As used inthis Trading Agreement and Order, "Commissioner" means the Commissioner ofEnvironmental Protection or an agent ofthe Commissioner. 14. Notification ofooncompliance. In the event thatPfizerbecomes aware that it did not ormay notcomply, or did notor may oot comply on time, with any requirementofthis Trading Agreement and Orderor ofany document required hereunder, Pfizershall immediately notify the Commissioner and shall take all reasonable steps to ensure that any noncompliance ordelay 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 andpropose, 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 ofany compliance dates proposed shall not excuse noncompliance or delay unless specifically so stated by the Commissionerinwriting. 15. Certification ofdocumeots. Any document, including but not limited to any notice, which is required to be submitted to the Commissionerunderthis Trading Agreement and Order shall be signed by the chiefexecutive officer of
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# cdtIPfizeror 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 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.**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 orderby and between the Commissioner and Pfizer with respect to the matters addressed herein, and shall not be modified without the written agreement ofboth 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 oftransfer: liability ofPfizerand others. Until Pfizer has fully complied with this Trading Agreement and Order, Pfizer shall notify the Commissioner in 

### writing no laterthan fifteen (15) days aftertransferring alforany 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 ofa 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 ortake 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 orcriminally negligent or for which penalties have not been specifically provided in this Trading Agreement and Order, including but not limited to violations ofany permit issued by the Commissioner. Ifat any time

# Date:~Pfizer, Inc. 9 TRADING AGREEMENT AND ORDERNO. 8136

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Initials: the Commissioner determines that the actions taken by Pfizer pursuant to this Trading Agreement and Orderhave not fully achieved compliance with Section 22a-174-22 ofthe Regulations, the Commissioner may institute any proceeding against Pfizerto undertake further investigation or further action. Pfizer's obligations under law. Nothing in this Trading Agreement and Order shall relieve Pfizer ofotherobligations 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 ofother persons, This Trading Agreement and Order shall neither create nor affect any rights ofpersons who or municipalities which are not parties to this Trading Agreement and Order. No Creation ofProperty Rights. This Trading Agreement and Order does not create any property rights with respect to these ERCs. Notice to Commissionerofcban£:es. Within fifteen (15) days ofthe date Pfizer becomes aware ofa change in any information submitted to the Commissioner under this Trading Aweement and Order, orthat any such information was inaccurate or misleadmg orthat any relevant information was omitted, Pfizer shall submit the correct or omitted information to the Commissioner. Submission ofdocuments. Any document required to be submitted to the Commissioner underthis 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

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Pfizer consents to the issuance ofthis Trading Agreement and Orderwithout further notice. The undersigned certifies that he/she is fully authorized to enter into this Trading Agreement and Order and to legally bind Pfizerto 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
afinal consent order ofthe Commissioner ofEnvironmental Protection on**_-'---J1f,P"","~~L-** , 1999

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CITY OF GROTON LAND RECORDS MAlLED CERTIFIED MAIL, RETIJRN RECEIPT REQUESTED Certified DocumentNo.