SIP DESCRIPTION - Montville Power LLC-Trading Agreement and Order

No. 8183A Modification I

t. SIP - DESCRIPTION OF DERC CREAnON ANDIOR USE

SIP SUMMARY TABLE

TradinQ: AQ'reement and Order No. 8183A

Montville Power LLC 74 Lathrop Road Montville cr 06382

Identifier Client 7741 Town # 107 Premise # ISequence # J.

Contact Ms. Cynthia Karlic Tel: (860) 343-6962 Fax (860) 343-6969

ReJtional Mana2er

PoUutant and Regulatory Standard: NOx ISection 22a-174-22 ofthe Regulations of

Connecticut State A2encies.

Nonattainment Area Classification Severe

Annual DERCs needed Estimated 5 ozone and I non-Qzone.

Comoliance Time Period Until Aori130, 2007.

Max. Emission Rate: CEM and full load emission rate (FLER) for Generation and

Use. (See Table I below):

Table 1

NOx Emission Rates and Allowable Limits .. (pW FT4A-8 Turbines)

Unit Fuel Maximum Stack Test FLER Allowable Date of Next

PIR number Capacity (ppmvd) IbslMMBlU Rate Stack Stack

MMBtuIhr IbsIMMBlU Test Test Due

Montville-IO #2 oil 256 9.718 3.11 2.35 5/23/01 5/23/06

R-21·

Montville-II #2 oil 256 10.236 2.96 2.35 5/23/01 5/23/06

R-22

11. SPECIAL REOUIREMENTS

a. This Trading Agreement and Order Modification supersedes Trading Agreement and

Order No. 8183A issued on April 22, 2003.

b. Calculations of credits used shall be as specified in Trading Agreement and Order No.

8183A.

c. Montville Power LLC shall acquire and permanently retire seven ozone season DERCs

for every actual ton of excess NOx emitted from the peaking unit 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

MONTVll..LE POWER LLC

TRADING AGREEMENT AND

ORDER NO. 8183A

MODIFICATION NO. I

TRADING AGREEMENT AND ORDER MODIFICATION

In the maUer of a Trading Agreement and Order between the Commissioner of Environmental

Protection ("Commissioner") and Montville Power U.c ("MPll.C").

WHEREAS, the Commissioner and MPLLC, having agreed to the terms and conditions set

forth in Trading Agreement and Order No. 8183A signed by the Commissioner on April 22,

2003, do now, by mutual agreement, modify said Trading Agreement and Order as follows:

t. Delete paragraph A.5. and substitute the following therefor:

Reserved.

2. Delete the date April 30, 2007 and substitute therefor May 1,2007, in paragraphs

A.6. and c.l.

3. Delete paragraph C.Z.a. and substitute the following therefor:

Until May 1,2007, before the first day of each month MPLLC shall have in its

possession sufficient approved DERCs for the current day for the peaking units

based on the following calculations;

Before the first day of each month, 1v1PLLC shall estimate DERCs required for

such month for the peaking units as follows:

(i) At all times:

Estimated DERCs (in tons) use; [«(FLER in IbsIMMBtu) - (0.95 x NOx

allowable rate in IbslMMBtu)) x (estimated

fuel use in MMBtu)] 2000 poundslton

(I'rinccd on Recycled Paper)

1\1 Elm Screel • li:lrlfnnt. CT 06106 - sin

All £q""j O"l'"rr,,,,ify Eml,/ovrr
Montville Power LLC 2 Trading Agreement and Order

No. 8183A Modification No.1

No later than the twentieth day of each month, MPLLC shall calculate and

permanently retire DERCs used in the preceding calendar month, as follows:

Actual DERCs (in tons) =[«(RER in IbsIMMBtu) - (0.95 x NOx allowable rate

in IbslMMBtu)) x (actual fuel use in MMBtu)) .. 2000

pounds/ton

Where:

• NOx allowable rate:: allowable limit rate in IbsIMMBtu shown in Table 1 of

this Trading Agreement and Order.

• HER = full load emission rate in IbsIMMBtu as shown in Table 1 of this

Trading Agreement and Order.

• Discount (0.95) = 5% design margin applied to the allowable limit rate.

ii) During the ozone season only:

No later than December 31st each year, MPLLC shall acquire and permanently

retire seven ozone season DERCs for every actual [on of excess NOx emitted

from the peaking units during the previous ozone season based upon the actual

emissions for each day that ConnecticU( one hour ozone levels were forecasted to

be "moderate to unheahhful", "unhealthful", or "very unhealthful", until such time

that the EPA revokes the I-hour standard. Upon such revocation, MPllC shall

calculate and pennanently retire seven ozone season DERCs for every actual ton

of excess NOx emitted from the peaking units during such ozone season based

upon the actual emissions for each day that Connecticut eight hour ozone levels

were forecasted to be "unhealthy for sensitive groups", "unhealthy", or "very

unhealthy".

Where:

Actual ton of excess NOx emitted = [«FLER in IbslMMBtu) - (0.95 x

NOx allowable rate in IbslMMBtu)) x (actual

fuel use in MMBtu)) .. 2000 poundslton

The total actual tons of excess NOx emitted from the peaking units during

forecasted ozone exceedance days shall be multiplied by seven and then rounded

to the next greater whole ton, to detennine the number of DERCs to be

pennanently retired. This requirement is in addition to !.he MPLLC's requirement

to estimate excess emissions and subsequent pennanent retirement of a sufficient

number of approved DERCs in accordance with paragraph C.2.a.(i) of this

Trading Agreement and Order.

4. Delete paragraph C.2.b. and substitute the following therefor:
Montville Power LLC

Reserved.

3 Trading Agreement and Order

No. 8183A Modification No. I

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

Annual DERC Report. No later than March 1 of every year after issuance of this

Trading Agreement and Order, MP~C shall submit in writing to the

Commissioner, a record of each sale or other transfer of DERCs for the previous

calendar year. MP~C shall also include actual NOx emissions from the peaking

units and the amount ~f all DERCs used (including serial numbers (if assigned)

and DERCs purchased from other facilities). These reports shall be on forms

prescribed by the Commissioner and shall be in monthly increments, and by ozone

and non ozone seasons.

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

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

MP~C may use NOx allowances, until May 1, 2007, for the peaking units

pursuant to Section 22a-174·22(j) of the Regulations to achieve all or a portion of

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

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

subject to all restrictions andlor requirements applicable to DERCs contained in

this Trading Agreement and Order;

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

account or use an existing compliance account or overdraft account in

EPA's NOx Allowance Tracking System ("NATS"); and

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

Regulations shall be equivalent to one discrete emission reduction credit.

Allowances shall be considered used for compliance with Section 22a174-22 of the 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 cr State NOx Retirement Account (Account

ID CToo000003oo in the NATS).

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

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

100% if DERCs are not in MPLLC'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 of law. MPLLC shall
Montville Power LLC 4 Trading Agreement and Order

No. 8l83A Modification No.1

permanently retire the quantity of DERCs equivalent to the excess emissions

plus a 100% premium within sixty (60) days of :MPLLC's discovery of the

DERC shortfall. MPLLC shall certify and report any such DERC retirement to

the Commissioner in accordance with paragraph C.29. of this Trading

Agreement and Order.

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

FLER Exceedance. Noncompliance with an established FLER shall subject

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

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

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

the total heat input during the period of noncompliance divided by 2000

lbslton. If the 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 of law. :MPLLC shall permanently

retire DERCs calculated in accordance with the above plus a 100% premium

within sixty (60) days of :MPLLC's discovery of the FLER exceedance.

:MPLLC shall report any FLER exceedance to the Commissioner in accordance

with paragraph C.29. of this Trading Agreement and Order.

9.

10.

11.

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

Extension. No later than May 1, 2007, with respect to the peaking units,

MPLLC shall comply with the requirements of Section 22a-174-22(d)(l) of

the Regulations. There is no assurance that after full program review of this

and other Trading Agreements and Orders that the Commissioner will grant a

written extension of this Trading Agreement and Order.

Delete paragraph C.13. and substitute the following therefor:

Future Compliance Report. On or before September 1, 2006, MPLLC shall

submit a report in writing to the Commissioner, as directed in paragraph CJO.

of this Trading Agreement and Order, indicating how the facility shall comply

with Section 22a-174-22 of the Regulations with respect to the peaking units

on and after May 1, 2007.

Delete paragraph C.16. and substitute the following therefor:
Montville Power LLC 6 Trading Agreement and Order

No. 8183A Modification No.1

MPLLC hereby consents to the entry of this modification to the Trading Agreement and Order

without further notice.

Montville Power LLC

Signature:

Type Name:

Type Title:

Date:

Iff:JllL.tA et!/f2L:b.6

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-Rf!!()fJ(;j G11M:Y}f!1Wt!L tr'C~()9!Jt'Y

.,3--/S-Q.jIssued as a modification of an Order of the Commissioner of Environmental Protection.

Date

MArr..ED CERTIFIED MArr..,

RETURN RECEIPT REQUESTED

Certified Document No. 7002 2030 0006 5643 0055