# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

State ofConnecticut and Capitol District Energy Center Cogeneration Associates ) ) ) ) 

### Trading Agreement and OrderNo. 8298

WHEREAS, the Commissioner ofEnvironmental Protection ("Commissioner") and Capitol District Energy Center Cogeneration Associates ("Respondent") agree that the Commissioner may issue apermit or orderto allow emissions trading in accordance with Section 22a-174-22(j) ofthe Regulations of Connecticut State Agencies ("Regulations") as a method ofcompliance with Section 22a-174-22 ofthe Regulations:
A. At the request and withthe 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 ofNitrogen Oxide (NOx) emissions.
4. Forthe 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: CAIRNOx Ozone Season allowance originally allocated to a CAIRNOx 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 CArRNOx Ozone Season unit located in the State of Connecticut afterthe date ofissuance ofthis Trading Agreement and Order.

c. CArRNOx 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 EmployerCapitol District EnergyCenter 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 Commissioneror generated and approved by the Commissioner in accordance with a protocol submitted and approved pursuant to Section 22a-174-38 ofthe Regulations. Suchunit 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 ofPartB of this Trading Agreement and Order.
f. Non-Attainment Area: means the geographic area which has been designated as nonattainmentpursuant to 40 CFR 81 in accordance with the provisions of 42 USC 7407 (Section 107 ofthe 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-NorthernNew Jersey-Long Island, NY-NJ-CT area.
g. CAIR NATS: "CAIRNOxOzone Season Allowance Tracking System" as defined in 40 CFR 96.302.

h. Ozone Season: May I through September 30 ofeach calendaryear 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 ofconsecutive calendarmonths 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 PG653I 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) ofthe Regulations, Respondentproposes to comply with Section 22a-174-22(e) ofthe Regulations, when operating the emission unit described in Table I by means ofemissions 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 byCEMS for the purposes ofcalculating 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) ofthe Regulations hereby allows Respondent to comply with Section 22a-174-22 ofthe Regulations at the facility through the use ofemissions 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 ConnecticutGeneral Statutes, hereby orders Respondent as follows:
I. Expiration ofthis Trading Agreement and Order: The Respondent may only use emissions trading, subject to the provisions ofthis Trading Agreement and Order, until the date of expiration ofthis Trading Agreement and Order. The date ofexpiration ofthis Trading Agreement and Order shall be the earlierof:

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 ofany provision ofthis Trading Agreement and Order; or d. The date specified in any written notice from the Commissioner, notifying the Respondent that the Commissionerhas determined the use ofemissions trading as a compliance option has been further restricted, modified ornullified by: (i) the promulgation ofan Act, Statute, orRegulations; or (ii) the issuance ofajudgment orcourt order.
2. Respondent shall obtain and use sufficient DERCs and/or Allowances in such a manneras 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 Ordermust be allocated for the control period that occurs during the same yearthose allowances are used for compliance with this Trading Agreement and Order.
3. Priorto using Allowances in accordance with Paragraph B.6 ofthis Trading Agreement and Orderthe Respondent shall obtain a General Account orCompliance Account in the CAIR NATS.
4. Vintage Restriction. Forthe purposes ofcompliance with Section 22a-174-22 ofthe Regulations and the provisions ofthis Trading Agreement and Order, DERCs shall only remain valid for five (5) calendaryears from the year ofthe generation ofsuch DERCs. DERCs olderthan five (5) calendaryears from their creation are not valid for use for compliance with Section 22a-174-22 ofthe Regulations and the provisions ofthis Trading Agreement and OrderCapitol DistrictEnergy Center Cogeneration Associates 4 Trading Agreement and Order 8298

;' 5. Ozone Season Fuel Use Restriction: Notwithstanding the provisions ofParagraph 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 orco-firing the lowest NOx emitting fuel type orcombination offuel types that legally authorized to burn in accordance with Departmental statutes, regulations, permits and/orregistration.
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, ifeither:

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 ofgaseous fuels to the emission units is interrupted due to inadequate supply orin accordance with an interruptible supply agreementbetween the Respondent and the gaseous fuel supplier;

c. the purchase ofthe 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 auditpurposes, in Connecticutorthe ISO-NE region.
7. Non-Ozone Season DERCfAllowance Use. The Respondent shall possess a quantity of DERCs and/or Allowances that equals orexceeds the quantity ofNon- Ozone Season Actual DERCsf Allowances Required for thatNon-Ozone Season. Compliance with Paragraph B.7 of this Trading Agreement and Order shall be determined as follows:

a. Before the first day ofeach Non-Ozone Season, Respondent shall estimate DERCs and/or Allowances required forthat Non- Ozone Season forthe emission unit described in Table I based on the average actual NOx emissionrate from the emission unit and an emission limit of

### O.I 5 Ibfmmbtu as follows:
Estimated Non-Ozone Season DERCsfAllowances Required = {(EstimatedNon-Ozone Season fuel use in MMBtu) x «estimated average NOx Emission Rate Ibfmmbtu)

- (0.95 x 0.15 Ibfmmbtu))} + 2000 Ibsfton
b. No laterthan thirty (30) days afterthe end ofeach 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 DERCsf Allowances 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 Ibsftona. Inspect the combustion system, and clean orreplace 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 ofthis Trading Agreement and Order. Notwithstanding the provisions ofParagraph B.9 ofthis Trading Agreement and Order, any violation ofParagraphs B.7 ofthis Trading Agreement and Ordermay be subject to additional enforcement action as maybe deemed appropriate bythe Commissioner in accordance with the Department's enforcement response policy. Trading Agreement and Order 8298 5
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 ofAllowances from the Respondent's NOx General Account or Compliance Account to the CT State NOx Retirement Account (Account ill CT0000000300 in the CAIRNATS) such that the total is equal to Actual Non-Ozone Season DERCs/Allowances Required for the mostrecently 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/orAllowances in the Respondent's possession on the first day ofthat Non-Ozone Season, then in addition to the deduction ortransfer specified in Paragraphs B.8, the Respondent shall also deduct a quantity ofDERCs from the current balance ofDERCs possessed by the Respondent and/or transfera 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 ofeach Non-Ozone Season, the Respondent shall demonstrate that any Allowances used for compliance with this Trading Agreement and Orderduring 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 orless than the amount ofAllowances 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 ofParagraph 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 calendaryears within that NonOzone Season. Capitol DistrictEnergy Center Cogeneration Associatesd. 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 orcurrent good engineering practice;

b. On each day, during the Ozone Season, that the Respondent operates in accordance with Paragraph B.6 ofthis Trading Agreement and Order, the Respondent shall make and keep records ofall emissions unit operations in accordance with Paragraph B.6, including copies ofall written Trading Agreement and Order 8298 6

iii. The name, title and affiliation ofthe person conducting any maintenance, tune-up, and/or inspection activityperformed on the emission unit described in Table I in accordance with Paragraph B.II ofthis Trading Agreement and Order,

IV. The operating parameters ofthe emission unit used to determine that the emission unit is operating in accordance with manufacturer's specification orcurrent good engineering practice priorto and afterany 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 ofthe 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/orinspection activityperformed 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 orcurrent good engineering practice,

11. The date and a description ofany 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 afterthe completion ofeach Non-Ozone Season, the Respondent shall record the Non-Ozone Season average NOx emission rate for the emissionunit 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/orAllowances transferred in accordance with Paragraphs E.8 and E.9 ofthis Trading Agreement and Order. Capitol District EnergyCenter Cogeneration Associatescorrespondence demonstrating that operations are due to one ormore ofthe factors described in Paragraph 8.6.athrough Paragraph B.6.c.

19. Certification ofdocuments. Any document, including butnot limited to any notice, which is required to be submittedto the Commissionerunder this Trading Agreement and Order shall 15. Full compliance. Respondent shall not be considered in full compliance with this Trading Agreement and Orderuntil all actions required by this Trading Agreement and Orderhave been completed as approved and to the Commissioner's satisfaction. Trading Agreement and Order 8298 7

16. Approvals. Respondent shall use best efforts to submit to the Commissioner all documents required bythis Trading Agreement and Orderin a complete and approvable form. Ifthe Commissionernotifies Respondent that any document orother action is deficient, and does not approve it with conditions ormodifications, it is deemed disapproved, and Respondent shall correct the deficiencies and resubmit it within the time specified by the Commissioner or, ifno time is specifiedby the Commissioner, within 30 days ofthe Commissioner's notice ofdeficiencies. In approving any document or other action under this Trading Agreement and Order, the Commissionermay approve the document or other action as submitted or performed or with such conditions or modifications as the Commissionerdeems 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 orpersonally delivered, whicheveris earlier.
18. Dates. The date ofsubmission to the Commissionerofany document required by this Trading Agreement and Order shall be the date such document is received by the Commissioner. The date ofany notice by the CommissionerunderTrading Agreement and Order, including but not limited to notice ofapproval or disapproval ofany document or other action, shall be the date such notice is deposited in the U.S. mail or is personally delivered, whicheveris earlier. Except as otherwise specified in this Trading Agreement and Order, the word "day" as used in this Trading Agreement and Ordermeans calendarday. Any document or action which is required by this Trading Agreement and Order to be submitted orperformed by a date which falls on a Saturday, Sunday or a Connecticutor federal holiday shall be submitted or performedby the next day which is not a Saturday, Sunday or Connecticutor 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 suchrecords were created. Respondent shall provide the records specified above to the Commissionerwithin thirty (30) days ofreceipt ofa 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 laterthan July 30 ofeach calendaryear, the Respondent shall submit a written report containing copies ofall records required pursuant to Paragraph B.l2 ofthis Trading Agreement and Order. The Commissionermayprescribe 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 AssociatesCapitol District Energy Center Cogeneration Associates 

### 8 Trading Agreement and Order 8298
be signedby the Respondent or, ifRespondent 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 ofConnecticut 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 ofthose individuals responsible for obtaining the information, that the submitted information is true, accurate and complete to the best ofmyknowledge and belief. Iunderstand that any false statement made in the submitted information maybe punishable as a criminal offense under Section 53a-157b ofthe ConnecticutGeneral Statutes and any other applicable law."

20. Noncompliance. This Trading Agreement and Order is a final order ofthe Commissionerwith respect to the matters addressed herein, and is nonappealable and immediately enforceable. Failure to comply with this Trading Agreement and Ordermay subject Respondent to an injunction and penalties.
21. False statements. Any false statement in anyinformation submittedpursuantto this Trading Agreement and Ordermaybe punishable as a criminal offense under Section 53a-157b ofthe Connecticut General Statutes and any other applicable law.
22. Notice oftransfer; liability ofRespondent. Until Respondent has fully complied with this Trading Agreement and Order, Respondent shall notify the Commissioner in writing no later than 15 days aftertransferring all or anyportion ofthe facility, the operations, the site or the business which is the subject ofthis Trading Agreement and Orderorafter 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 otherperson or municipality.
23. Commissioner's powers Nothing in this Trading Agreement and Order shall affect the Commissioner's authority to institute anyproceeding ortake any otheraction to prevent or abate violations oflaw, prevent or abate pollution, recovercosts and natural resource damages, and to impose penalties forpast, present, or future violations oflaw. Ifat any time the Commissionerdetermines that the actions taken by Respondentpursuant to this Trading Agreement and Orderhave not successfully corrected all violations, fully characterized the extent or degree ofany pollution, or successfully abated orpreventedpollution, the Commissionermay institute anyproceeding to require Respondent to undertake further investigation or further action to prevent or abate violations orpollution.
24. Respondent's obligations under law. Nothing in this Trading Agreement and Order shall relieve Respondent ofotherobligations under applicable federal, state and local law.
25. No assurance by Commissioner. No provision ofthis Trading Agreement and Order and no action orinaction by the Commissioner shall be construed to constitute an assurance by the Commissionerthat the actions taken by Respondentpursuant to this Trading Agreement and-----------------------------------------

Orderwill result in compliance orpreventor abate pollution. Capitol District Energy Center Cogeneration Associates 9 Trading Agreement and Order 829828. No Creation ofProoertv Rights. This Consent Orderdoes not create any propertyrights with respect to these DERCs orAllowances. 27. No effect on rights ofotherpersons. This Trading Agreement and Orderneither creates nor affects any rights ofpersons ormunicipalities that are not parties to this Trading Agreement and Order. 26. Access to premises. Any representative ofthe Department ofEnvironmental Protection may enter the withoutpriornotice for the purposes ofmonitoring and enforcing the actions required or allowed by this Trading Agreement and Order. Trading Agreement and Order 8298 10

Supervisor Administrative Enforcement Group Engineering and Enforcement Division Bureau ofAirManagement Department ofEnvironmental Protection 79 Elm Street, 5th Floor Hartford, Connecticut 06106 (860) 424-3702 29. Notice to Commissionerofchanges. Within 15 days ofthe date Respondentbecomes aware ofa change in any information submitted to the Commissionerunder this Trading Agreement and Order, orthat any such information was inaccurate ormisleading orthat anyrelevant information was omitted, Respondent shall submit the correct oromitted information to the Commissioner.
30. Notification ofnoncompliance. In the event that Respondent becomes aware that it did not or may not comply, ordid not ormay not comply on time, with any requirement ofthis Trading Agreement and Order orofany 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 ordelay is avoided or, ifunavoidable, is minimized to the greatest extentpossible. 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 ordelay and propose, for the review and written approval ofthe Commissioner, dates bywhich compliance will be achieved, and Respondent shall comply with any dates which maybe approved in writing by the Commissioner. Notification by Respondent shall not excuse noncompliance or delay, and the Commissioner's approval ofany compliance dates proposed shall not excuse noncompliance ordelayunless specifically so statedby the Commissionerin writing.
31. Submission ofdocuments. Any documentrequired to be submitted to the Commissioner under this Trading Agreement and Order shall, unless otherwise specified in this Trading Agreement and Order orin 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 ofthis Trading Agreement and Orderwithout further notice. The undersigned certifies that he/she is fully authorized to enter into this Trading Agreement and Orderand to legally bind Respondent to the terms and conditions ofthe Trading Agreement and Order.

Date: A---.:p:....n_·1_2_0_, 2_0_1_0

_

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

G En nee g & EnforcementDivision Bureau ofAirManagement

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