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STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

STATE OF CONNECTICUT

AND

COMBUSTION ENGINEERING, INC.

TRADING AGREEMENT AND

ORDER NO. 8I54A

MODIF[CATION NO. 1

TRADING AGREEMENT AND ORDER MODIFICATION

[n the matter of a Trading Agreement and Order between the Commissioner of Environmental

Protection ("Commissioner") and Combustion Engineering ("CE").

WHEREAS, the Commissioner and CE, having agreed to the terms and conditions set forth in

Trading Agreement and Order No. 8154A issued on April 26, 2003, do now, by mutual

agreement, modify Trading Agreement and Order No.8 I54A as follows:

1. Delete the date April 30, 2007, and substitute therefor May I, 2009, in paragraph

A.6.

2. Delete Table 2 in paragraph A.8. in its entirety and substitute the following

therefor:

Table 2

Purchased Approved DERCs

Year Ozone Season Tons Non-ozone Tons Expiration

season Date

2001 SIN not assigned 9 SIN not assib'11ed 6 12/31/06

3. Delete the date April 30, 2007, and substitute therefor May I, 2009 in paragraph

C.1. and C.2.

4. Delete paragraph C.5. and substitute the following therefor:

Annual Emission Statement and Non-Ozone Season Emission Statement. No

later than March 1 for the previous calendar year and July 30 (for the October

through April time period only starting in 2003) of every year after issuance of

this Trading Agreement and Order, CE shall provide to the Commissioner, a

( Printed on Recycled Paper)

79 Elm Street • Hartford, CT 06106 - 5127

All Equal Op/wrlllll;ty Employer
Combustion Engineering, Inc. 2 Trading Agreement and Order

No. 8154A Modification No. I

record of each sale or other transfer, and use of any and all ofthe DERCs

approved within and subsequent to issuance ofthis Trading Agreement and Order

until all such DERCs have been used or are no longer in CE's possession. CE

shall also include actual NOx emissions from the boiler and the amount of

all DERCs used (including serial numbers (if assigned) and approved DERCs

generated and/or purchased from other facilities), generated and/or approved for

the previous calendar year and October through April time period. These reports

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

increments, and by ozone and non-ozone seasons.

5. Delete paragraph C.6. and substitute the following therefor:

Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, CE

may use NOx allowances, until May I, 2009, for the boiler pursuant to

Section 22a-174-22(j) ofthe Regulations to achieve all or a portion ofthe

reductions required by Section 22a-174-22 ofthe Regulations. Any allowance

used for compliance with Section 22a-174-22(e) ofthe Regulations shall be

subject to all restrictions and/or requirements applicable to DERCs contained in

this Trading Agreement and Order;

a. In order for CE to use NOx allowances, CE shall create a general account

or use an existing compliance account or overdraft account in EPA's NOx

Allowance Tracking System (UNATS"); and

b. Each allowance used for compliance with Section 22a-174-22 ofthe

Regulations shall be equivalent to one discrete emission reduction credit.

Allowances shall be considered used for compliance with Section 22a174-22 ofthe Regulations when they are transferred from the facility's

NOx general account in the NATS or the facility's NOx compliance

account in the NATS to the CT State NOx Retirement Account (Account

ill CT0000000300 in the NATS)

6. Delete paragraph C.7. and substitute the following therefor:

DERC Shortfall. At a minimum, DERCs required shall be adjusted upwards by

100% ifDERCs are not in CE's possession for use prior to the first day of each

month or applicable season. However, nothing in this Trading Agreement and

Order shall affect the Commissioner's authority to institute any proceeding or take

any other action to require additional upward adjustment, based on the gravity of

any alleged noncompliance or violation oflaw. CE shall permanently retire the

quantity ofDERCs equivalent to the excess emissions plus a 100% premium

within sixty (60) days ofCE's discovery ofthe DERC shortfall. CE shall

certifY and report any such DERC retirement to the Commissioner in accordance
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Combustion Engineering, Inc. 3 Trading Agreement and Order

No. 8154A Modification No. I

with paragraph C.30. ofthis Trading Agreement and Order.

7. Delete paragraph C.9. and substitute the following therefor:

FLER Exceedance. Noncompliance with an established FLER shall subject

CE to make restitution by matching the quantity of emissions ("true up")

caused by the exceedance plus a 100% premium. The true up in tons ofDERCs

shall be equal to the FLER exceedance in IbslMMBtu, multiplied by the total

heat input during the period of noncompliance divided by 2000 Ibs/ton. Ifthe

period of noncompliance is not known, the time period from the completion of

the last/previous Commissioner witnessed emission test through the date the

FLER compliance is achieved as approved by the Commissioner shall be used.

However, nothing in this Trading Agreement and Order shall affect the

Commissioner's authority to institute any proceeding or take any other action to

require additional upward adjustment, based on the gravity of any alleged

noncompliance or violation oflaw. CE shall pennanently retire DERCs

calculated in accordance with the above plus a 100% premium within sixty (60)

days ofCE's discovery ofthe FLER exceedance. CE shall report any FLER

exceedance to the Commissioner in accordance with paragraph C.30. ofthis

Trading Agreement and Order.

8. Delete paragraph C.12. and substitute the following therefor:

Extension. No later than May 1,2009, with respect to the boiler, CE shall comply

with the requirements of Sections 22a-174-22(d)(l) and 22a-174-22(d)(2)(A) of

the Regulations and amendments thereto. There is no assurance that the

Commissioner will grant a written extension ofthis Trading Agreement and

Order.

9. Delete paragraph C.l3. and substitute the following therefor:

Future Compliance Report. On or before September I, 2008, CE shall submit a

report in writing to the Commissioner, as directed in paragraph C.30. ofthis

Trading Agreement and Order, indicating how the facility shall comply with

Section 22a-174-22 ofthe Regulations with respect to the boiler on and

after May 1, 2009.

10. Delete paragraph C.16. 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

in compliance with Section 22a-174-22 ofthe Regulations; "Commissioner"
'f, '.~

Combustion Engineering, Inc. 4 Trading Agreement and Order

No. 8154A Modification No.1

means the Commissioner or a representative ofthe Commissioner; "Non-ozone

season" means the period from October 1 through April 30 in any given calendar

year; "Ozone season" means the period May 1 through September 30 in any

given calendar year.

11. Delete paragraph C.17. and substitute the following therefor:

Dates. The date of "issuance" ofthis Trading Agreement and Order is the date

the Trading Agreement and Order is deposited in the U.S. mail or personally

delivered, whichever is earlier. The date ofsubmission to the Commissioner of

any document required by this Trading Agreement and Order shall be the date

such document is received by the Commissioner. The date of any notice by the

Commissioner under this Trading Agreement and Order, including but not limited

to notice of approval or disapproval of any document or other action, shall be the

date such notice is deposited in the U.S. mail or is personally delivered, whichever

is earlier. Except as otherwise specified in this Trading Agreement and Order, the

word "day" as used in this Trading Agreement and Order means calendar day.

Any document or action which is required by this Trading Agreement and Order to

be submitted or performed by a date which falls on a Saturday, Sunday or a

Connecticut or federal holiday shall be submitted or performed by the next day

which is not a Saturday, Sunday or Connecticut or federal holiday.

12. Delete the word "individual" and substitute therefor the word "Section" in

paragraph C.29.

13. Delete the name "Mr. Roland L. Severance Jr., PE" in paragraph C.30.

All other terms and conditions of Trading Agreement and Order No. 8154A issued by the

Commissioner acting under Chapter 446c, Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a177 ofthe Connecticut General Statutes shall remain in effect.
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Combustion Engineering, Inc. 5 Trading Agreement and Order

No. 8154A Modification No. I

Signature:

CE hereby consents to the entry ofthis modification to the Trading Agreement and Order without

further notice.

COMBUSTION ENGINEERING INC.

~~ Type Name:

Type Title:

Date:

R. Keith Knauerhase

Director, Environmental Engineering and Support

October 2, 2006

Issued as a modification of an Order ofthe Commissioner ofEnvironmental Protection.

Date i

TOWN OF WINDSOR LAND RECORDS

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