STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

State ofConnecticut

and

Capitol District Energy Center

Cogeneration Associates

)

)

)

)

Trading Agreement and Order No. 8298

WHEREAS, the Commissioner of Environmental Protection ("Commissioner") and Capitol District

Energy Center Cogeneration Associates ("Respondent") agree that the Commissioner may issue a permit

or order to allow emissions trading in accordance with Section 22a-174-22(j) ofthe Regulations of

Connecticut State Agencies ("Regulations") as a method of compliance with Section 22a-174-22 ofthe

Regulations:

A. At the request and with the agreement ofRespondent, the Commissioner finds the following:

I. This Trading Agreement and Order supersedes Trading Agreement and Order 8249 and all

subsequent modifications thereto.

2. Respondent is a corporation that owns and operates a cogeneration plant at 490 Capitol

Avenue, Hartford, Connecticut ("facility").

3. At the facility, Respondent operates the emission unit described in Table 1 below, which is

subject to Section 22a-174-22 ofthe Regulations ofConnecticut State Agencies

("Regulations") pertaining to the control of Nitrogen Oxide (NOx) emissions.

4. For the purposes ofthis Trading Agreement and Order, the following definitions shall apply:

a. Allowable Emission Limit (AEL): the applicable NOx emission limit set forth

in Section 22a-174-22(e) or Section 22a-174-22(f) ofthe Regulations

corresponding to the emission unit described in Table 1 ofthis Trading

Agreement and Order

b. Allowance: CAIR NOx Ozone Season allowance originally allocated to a

CAIR NOx Ozone Season unit, as defined in Section 22a-174-22c ofthe

Regulations, located in the State ofConnecticut or a NOx allowance

designated specifically for compliance during Ozone Season control periods

and allocated to a CArR NOx Ozone Season unit located in the State of

Connecticut after the date of issuance ofthis Trading Agreement and Order.

c. CArR NOx Ozone Season unit: shall be as defined in Section 22a-174-22c of

the Regulations

d. CEMS: Continuous Emissions Monitoring System

(Printed on Recycled Paper)

79 Elm Street _ Hartford. CT 06106·5127

www.cLgov/dcp

An Equal Opportuniry Employer
Capitol District Energy Center

Cogeneration Associates 2 Trading Agreement and Order 8298

e. Discrete Emission Reduction Credit (DERC): a unit that was generated and

approved by the Commissioner in accordance with a Trading Agreement and

Order issued by the Commissioner or generated and approved by the

Commissioner in accordance with a protocol submitted and approved pursuant

to Section 22a-174-38 ofthe Regulations. Such unit is equivalent to I ton of

NOx emissions and may be used for emissions trading in accordance with

Section 22a-174-22(j) ofthe Regulations, subject to the provisions of Part B of

this Trading Agreement and Order.

f. Non-Attainment Area: means the geographic area which has been designated

as nonattainment pursuant to 40 CFR 81 in accordance with the provisions of

42 USC 7407 (Section 107 of the Act). Pursuant to 40 CFR 81.307, the

designated ozone non-attainment areas in the State ofConnecticut are: the

Greater Connecticut, CT area and the New York-Northern New Jersey-Long

Island, NY-NJ-CT area.

g. CAIR NATS: "CAIR NOx Ozone Season Allowance Tracking System" as

defined in 40 CFR 96.302.

h. Ozone Season: May I through September 30 of each calendar year or such

period as defined by the U.S. Environmental Protection Agency, subsequent to

the issuance ofthis Trading Agreement and Order.

I. Non-Ozone Season: the period of consecutive calendar months between two

successive Ozone Seasons

Table 1

CAIR NOx Ozone Season Unit

UNIT- Fuel Heat Input Allowable Emission Limit

reg. or permit no. (MMBtu/hr) (AEL)-LbsIMMBtu

GE PG653 I Nat. Gas 738.8 .15

Cogeneration Turbine #2 Fuel 708.2 During the Non-Ozone Season

P-75-0064

5. The Respondent agrees that the actual NOx emissions rate from the emission unit

described in Table I, at times, exceeds the corresponding AEL.

6. Pursuant to Section 22a-174-22(j) of the Regulations, Respondent proposes to comply

with Section 22a-174-22(e) ofthe Regulations, when operating the emission unit

described in Table I by means of emissions trading in accordance with the provisions of

this Trading Agreement and Order.

7. The Respondent proposes to use the actual non-ozone season average emission rate

measured by CEMS for the purposes of calculating Actual DERCs/Allowances Required

for the emission unit described in Table I.
Capitol District Energy Center

Cogeneration Associates 3 Trading Agreement and Order 8298

The Commissioner, in accordance with Section 22a-174-22(j) of the Regulations hereby allows

Respondent to comply with Section 22a-174-22 ofthe Regulations at the facility through the use

of emissions trading, subject to the provisions ofthis Trading Agreement and Order.

B. With the agreement ofRespondent, the Commissioner, acting under Sections 22a-6, 22a-174, 22a176, and 22a-l77 ofthe Connecticut General Statutes, hereby orders Respondent as follows:

I. Expiration of this Trading Agreement and Order: The Respondent may only use emissions

trading, subject to the provisions of this Trading Agreement and Order, until the date of

expiration ofthis Trading Agreement and Order. The date of expiration of this Trading

Agreement and Order shall be the earlier of:

a. January I, 2013;

b. The date upon which the Respondent demonstrates to the Commissioner's

satisfaction that actual NOx emissions from the emission unit, at all times,

does not exceed the corresponding AEL(s);

c. The date specified in any written notice from the Commissioner stating that the

Respondent is no longer allowed to use emissions trading due to the

Respondent's violation of any provision ofthis Trading Agreement and Order;

or

d. The date specified in any written notice from the Commissioner, notifying the

Respondent that the Commissioner has determined the use of emissions trading

as a compliance option has been further restricted, modified or nullified by:

(i) the promulgation of an Act, Statute, or Regulations; or

(ii) the issuance of a judgment or court order.

2. Respondent shall obtain and use sufficient DERCs and/or Allowances in such a manner as to

comply with Paragraph 8.5 ofthis Trading Agreement and Order. All Allowances used must

come from an emission unit that is within the same ozone nonattainment area as the

Respondent. Any Allowances used to comply with this Trading Agreement and Order must

be allocated for the control period that occurs during the same year those allowances are used

for compliance with this Trading Agreement and Order.

3. Prior to using Allowances in accordance with Paragraph B.6 of this Trading Agreement and

Order the Respondent shall obtain a General Account or Compliance Account in the CAIR

NATS.

4. Vintage Restriction. For the purposes of compliance with Section 22a-174-22 of the

Regulations and the provisions ofthis Trading Agreement and Order, DERCs shall only

remain valid for five (5) calendar years from the year of the generation ofsuch DERCs.

DERCs older than five (5) calendar years from their creation are not valid for use for

compliance with Section 22a-174-22 of the Regulations and the provisions of this Trading

Agreement and Order
Capitol District Energy Center

Cogeneration Associates 4 Trading Agreement and Order 8298

;'

5. Ozone Season Fuel Use Restriction: Notwithstanding the provisions of Paragraph B.2 ofthis

Trading Agreement and Order, when operating the emission unit described in Table I during

the Ozone Season, the Respondent shall operate those units while ftring or co-firing the lowest

NOx emitting fuel type or combination offuel types that legally authorized to burn in

accordance with Departmental statutes, regulations, permits and/or registration.

6. Notwithstanding Paragraph B.5 ofthis Trading Agreement and Order, during the Ozone

Season, the Respondent may operate the emission units described above on fuels that result in

higher emissions ofNOx, if either:

a. the availability offuel oil that complies with Paragraph B.5 is inadequate to meet the

needs ofresidential, commercial and industrial users in this state and that such

inadequate supply constitutes an emergency;

b. the supply of gaseous fuels to the emission units is interrupted due to inadequate supply

or in accordance with an interruptible supply agreement between the Respondent and

the gaseous fuel supplier;

c. the purchase of the lowest NOx emitting fuel type will prevent the unit from responding

to an ISO-New England dispatch directive on a timely basis under an emergency power

shortage event, or for audit purposes, in Connecticut or the ISO-NE region.

7. Non-Ozone Season DERCfAllowance Use. The Respondent shall possess a quantity of

DERCs and/or Allowances that equals or exceeds the quantity of Non- Ozone Season Actual

DERCsfAllowances Required for that Non-Ozone Season. Compliance with Paragraph B.7 of

this Trading Agreement and Order shall be determined as follows:

a. Before the first day of each Non-Ozone Season, Respondent shall estimate DERCs

and/or Allowances required for that Non- Ozone Season for the emission unit

described in Table I based on the average actual NOx emission rate from the

emission unit and an emission limit of O. I 5 Ibfmmbtu as follows:

Estimated Non-Ozone Season DERCsfAllowances Required =

{(Estimated Non-Ozone Season fuel use in MMBtu) x «estimated average NOx Emission Rate

Ibfmmbtu) - (0.95 x 0.15 Ibfmmbtu))} + 2000 Ibsfton

b. No later than thirty (30) days after the end of each Non-Ozone Season, the

Respondent shall calculate Actual Non-Ozone Season DERCs and/or Allowances

used during that Non-Ozone Season for each emission unit as follows:

Actual Non-Ozone Season DERCsfAllowances Required =

{(Actual Non-Ozone Season fuel use in MMBtu) x «Non-Ozone Season Average Actual NOx

Emission Rate Ibfmmbtu) - (0.95 x 0.15 Ibfmmbtu))}+2000 Ibsfton
a. Inspect the combustion system, and clean or replace any components ofthe

combustion system as necessary, in accordance with manufacturer's specification

or current good engineering practice;

Such additional DERC deduction or Allowance transfer shall be performed at the same time

as any DERC deduction or Allowance transfer specified in Paragraph B.8 of this Trading

Agreement and Order.

Notwithstanding the provisions of Paragraph B.9 of this Trading Agreement and Order, any

violation of Paragraphs B.7 of this Trading Agreement and Order may be subject to additional

enforcement action as may be deemed appropriate by the Commissioner in accordance with

the Department's enforcement response policy.

5 Trading Agreement and Order 8298

8. Not more than thirty (30) days after the completion ofthe Non-Ozone Season, the Respondent

shall deduct a quantity ofDERCS from the current balance ofDERCs possessed by the

Respondent and/or transfer a quantity of Allowances from the Respondent's NOx General

Account or Compliance Account to the CT State NOx Retirement Account (Account ill

CT0000000300 in the CAIR NATS) such that the total is equal to Actual Non-Ozone Season

DERCs/Allowances Required for the most recently completed Non-Ozone Season.

II. Maintenance and Tune-up. Not more than I year from the date ofissuance ofthis Trading

Agreement and Order, the Respondent shall perform maintenance and inspection ofthe

emission unit listed in Table I. Such maintenance and inspection shall include, but not be

limited to, the following:

9. Doubling: Ifthe Actual DERCs/Allowances Required for any Non-Ozone Season, determined

in accordance with Paragraph B.7, exceeds the quantity ofDERCs and/or Allowances in the

Respondent's possession on the first day ofthat Non-Ozone Season, then in addition to the

deduction or transfer specified in Paragraphs B.8, the Respondent shall also deduct a quantity

ofDERCs from the current balance ofDERCs possessed by the Respondent and/or transfer a

quantity ofAllowances from the Respondent's NOx General Account or Compliance Account

to the CT State NOx Retirement Account (Account ill CT0000000300 in the CAIR NATS)

such that the total is equal to Actual Non-Ozone Season DERCs/Allowances Required for the

most recently completed Non-Ozone Season.

10. Not more than thirty (30) days after the completion of each Non-Ozone Season, the

Respondent shall demonstrate that any Allowances used for compliance with this Trading

Agreement and Order during the each non-ozone season are surplus, quantifiable, enforceable

and permanent. This shall be determined by demonstrating that the actual NOx emissions

during the ozone season, as reported to the United States Environmental Protection Agency,

from the emission unit to which the Allowances were originally allocated were equal to or less

than the amount of Allowances allocated to such unit by the State ofConnecticut minus the

Allowances used for compliance with this Trading Agreement and Order. Notwithstanding the

control period limitations of Paragraph B.2 ofthis Trading Agreement and Order, Allowances

used to comply with this Paragraph for a Non-Ozone Season must have been originally

allocated for the control periods that correspond to the same calendar years within that NonOzone Season.

Capitol District Energy Center

Cogeneration Associates
d. Make and keep records including, but not limited to, the following:

b. Inspect the system controlling the air-to-fuel ratio, and ensure that it is calibrated

and functioning in accordance with the manufacturer's specifications or current

good engineering practice;

b. On each day, during the Ozone Season, that the Respondent operates in

accordance with Paragraph B.6 of this Trading Agreement and Order, the

Respondent shall make and keep records of all emissions unit operations in

accordance with Paragraph B.6, including copies of all written

6 Trading Agreement and Order 8298

iii. The name, title and affiliation ofthe person conducting any

maintenance, tune-up, and/or inspection activity performed on the

emission unit described in Table I in accordance with Paragraph B.II

ofthis Trading Agreement and Order,

IV. The operating parameters of the emission unit used to determine that

the emission unit is operating in accordance with manufacturer's

specification or current good engineering practice prior to and after any

adjustments are made during maintenance, tune-up, or inspection

activity performed in accordance with Paragraph E.II ofthis Trading

Agreement and Order.

c. Measure the operating parameters of the emission unit used to determine that the

emission unit is operating in accordance with manufacturer's specification or

current good engineering practice prior to and after any adjustments are made

during maintenance, tune-up, or inspection activity;

1. Demonstration that any maintenance, tune-up, and/or inspection

activity performed on the emission unit described in Table I in

accordance with Paragraph B.II ofthis Trading Agreement and Order

has been performed in accordance with the manufacturer's

specifications or current good engineering practice,

11. The date and a description of any maintenance, tune-up, and/or

inspection activity performed on the emission unit described in Table I

in accordance with Paragraph B.II ofthis Trading Agreement and

Order,

12. Record Keeping;

a. Not more than thirty (30) days after the completion of each Non-Ozone

Season, the Respondent shall record the Non-Ozone Season average NOx

emission rate for the emission unit described in Table I, the quantity of

DERCs and/or allowances possessed on the first day ofthe Non-Ozone

Season, and the quantity ofDERCs deducted and/or Allowances transferred

in accordance with Paragraphs E.8 and E.9 ofthis Trading Agreement and

Order.

Capitol District Energy Center

Cogeneration Associates
correspondence demonstrating that operations are due to one or more ofthe

factors described in Paragraph 8.6.a through Paragraph B.6.c.

19. Certification of documents. 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

15. Full compliance. Respondent shall not be considered in full compliance with this Trading

Agreement and Order until all actions required by this Trading Agreement and Order have

been completed as approved and to the Commissioner's satisfaction.

7 Trading Agreement and Order 8298

16. Approvals. Respondent shall use best efforts to submit to the Commissioner all documents

required by this Trading Agreement and Order in a complete and approvable form. If the

Commissioner notifies Respondent that any document or other action is deficient, and does

not approve it with conditions or modifications, it is deemed disapproved, and Respondent

shall correct the deficiencies and resubmit it within the time specified by the Commissioner

or, if no time is specified by the Commissioner, within 30 days of the Commissioner's notice

of deficiencies. In approving any document or other action under this Trading Agreement and

Order, the Commissioner may approve the document or other action as submitted or

performed or with such conditions or modifications as the Commissioner deems necessary to

carry out the purposes ofthis Trading Agreement and Order. Nothing in this paragraph shall

excuse noncompliance or delay.

17. Definitions. As used in this Trading Agreement and Order "Commissioner" means the

Commissioner or a representative ofthe Commissioner; 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.

18. Dates. 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 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.

13. Respondent shall retain records and supporting documentation required by this Trading

Agreement and Order for a minimum offive years, commencing on the date such records were

created. Respondent shall provide the records specified above to the Commissioner within

thirty (30) days ofreceipt of a written request from the Commissioner. All records shall be

maintained in accordance with Sections 22a-174-4 and 22a-174-22 ofthe Regulations.

14. Reporting: Not later than July 30 of each calendar year, the Respondent shall submit a written

report containing copies of all records required pursuant to Paragraph B.l2 ofthis Trading

Agreement and Order. The Commissioner may prescribe the forms to be used for the

submission ofthese reports. The Respondent shall submit these reports on such forms, if

prescribed by the Commissioner.

Capitol District Energy Center

Cogeneration Associates
Capitol District Energy Center

Cogeneration Associates 8 Trading Agreement and Order 8298

be signed by the Respondent or, if Respondent is not an individual, by an individual,

employed by the Respondent, who satisfies the criteria set forth in Section 22a-174-2a(a)(I) of

the Regulations of Connecticut State Agencies and by the individual(s) responsible for

actually preparing such document. Each individual who signs documents in accordance with

this Paragraph 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, based on reasonable investigation,

including my inquiry of those individuals responsible for obtaining the information, that

the submitted information is true, accurate and complete to the best ofmy knowledge and

belief. I understand that any false statement made in the submitted information may be

punishable as a criminal offense under Section 53a-157b ofthe Connecticut General

Statutes and any other applicable law."

20. Noncompliance. This Trading Agreement and Order is a final order of the Commissioner with

respect to the matters addressed herein, and is nonappealable and immediately enforceable.

Failure to comply with this Trading Agreement and Order may subject Respondent to an

injunction and penalties.

21. 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 53a-157b ofthe

Connecticut General Statutes and any other applicable law.

22. Notice oftransfer; liability of Respondent. Until Respondent has fully complied with this

Trading Agreement and Order, Respondent shall notify the Commissioner in writing no later

than 15 days after transferring all or any portion of the facility, the operations, the site or the

business which is the subject ofthis Trading Agreement and Order or after obtaining a new

mailing or location address. Respondent'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.

23. Commissioner's powers Nothing in this Trading Agreement and Order shall affect the

Commissioner's authority 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 past, present, or future violations oflaw. If at any time

the Commissioner determines that the actions taken by Respondent pursuant to this Trading

Agreement and Order have not successfully corrected all violations, fully characterized the

extent or degree of any pollution, or successfully abated or prevented pollution, the

Commissioner may institute any proceeding to require Respondent to undertake further

investigation or further action to prevent or abate violations or pollution.

24. Respondent's obligations under law. Nothing in this Trading Agreement and Order shall

relieve Respondent of other obligations under applicable federal, state and local law.

25. No assurance by Commissioner. No provision ofthis Trading Agreement and Order and no

action or inaction by the Commissioner shall be construed to constitute an assurance by the

Commissioner that the actions taken by Respondent pursuant to this Trading Agreement and
-----------------------------------------

Order will result in compliance or prevent or abate pollution.

Capitol District Energy Center

Cogeneration Associates 9 Trading Agreement and Order 8298
28. No Creation ofProoertv Rights. This Consent Order does not create any property rights with

respect to these DERCs or Allowances.

27. No effect on rights of other persons. This Trading Agreement and Order neither creates nor

affects any rights of persons or municipalities that are not parties to this Trading Agreement

and Order.

26. Access to premises. Any representative ofthe Department ofEnvironmental Protection may

enter the without prior notice for the purposes ofmonitoring and enforcing the actions

required or allowed by this Trading Agreement and Order.

10 Trading Agreement and Order 8298

Supervisor

Administrative Enforcement Group

Engineering and Enforcement Division

Bureau of Air Management

Department ofEnvironmental Protection

79 Elm Street, 5th Floor

Hartford, Connecticut 06106

(860) 424-3702

29. Notice to Commissioner of changes. Within 15 days of the date Respondent becomes aware

of a change in any information submitted to the Commissioner under this Trading Agreement

and Order, or that any such information was inaccurate or misleading or that any relevant

information was omitted, Respondent shall submit the correct or omitted information to the

Commissioner.

30. Notification of noncompliance. In the event that Respondent becomes aware that it did not or

may not comply, or did not or may not comply on time, with any requirement ofthis Trading

Agreement and Order or of any document required hereunder, Respondent shall immediately

notify by telephone the individual identified in the next paragraph 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. Within five (5) days ofthe initial notice, Respondent shall submit

in writing the date, time, and duration ofthe noncompliance and 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 Respondent shall comply

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

Respondent 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.

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

under this Trading Agreement and Order shall, unless otherwise specified in this Trading

Agreement and Order or in writing by the Commissioner, be directed to:

Capitol District Energy Center

Cogeneration Associates
..

Capitol District Energy Center

Cogeneration Associates II Trading Agreement and Order 8298

VP, Operations, Maxim Power (USA) Inc. Type

Signature:_--".,7--?4:-!S::=::::..-..LL _

Respondent consents to the issuance of this 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 Respondent to the terms and conditions of the Trading Agreement and Order.

Date: A---.:p:....n_·1_2_0_,2_0_1_0 _

Issued as a fmal consent order ofthe Commissioner of the Department ofEnvironmental Protection.

G

En nee g & Enforcement Division

Bureau of Air Management

CITY OF HARTFORD LAND RECORDS

MAILED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

Certified Document