## STATE OFCONNECTICUT DEPARTMENT OF ENVIRONMENTALPROTECTION

In the matter of
The State ofConnecticut and

The Connecticut Light and Power Company TradingAgreement andOrderNo. 8161

Whereas, the CommissionerofEnvironmental Protection ("Commissioner") and The Connecticut Light and PowerCompany ("CL&P") agree that it is in the public interest that they work cooperatively to improve the air quality within the State of 

### Connecticut and that the use ofemission reduction trading will achieve this result in a timely and cost-effective manner:

A. At the request and with the agreement ofCL&P, the Commissioner finds the following:

1. CL&P is an electric utility with headquarters in Berlin, Connecticut, which owns and operates four fossil fuel-fired electric generating stations within the state.
2. One ofthe four fossil fuel-fired electric generating stations within the state that CL&P owns and operates is Montville Station at 74 Lathrop Road inMontville, Connecticut {"facility"). At the facility, CL&P operates Montville Station Unit 5, an 82 megawatt tangentially-firedboiler on No. 6 fuel oil and/or natural gas, Connecticut Registration Number 107-0017, {"boiler"). Acontinuous emissions monitor ("CEM"), certifiedto 40 Code of Federal Regulations Part 75,
measures nitrogen oxide ("NOx")emissions from the boiler.

3. During the year 1995, priorto modifications of the boiler's burner, combustion controls, operating conditions and based on CEM data certifiedto 40 Code of Federal RegUlations Part 75, the average annual NOx emission rate for Montville Station Unit 5 was 0.245 pounds permillion British thermal units ("lbs/MMBtu")

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(Printed on Recycled Paper) 79 Elm Street • Hartford, CT 06106·5127 bup:/ldep.state.cl.us AnEqual OpportunityEmployer Date:The Connecticut Light and PowerCompany TradingAgreement andOrder No. 8161

ofheat input when operating on No. 6 fuel oil and 0.211 Ibs/MMBtu ofheat input when operating on natural gas. On and afterMay 31, 1995, the Regulations of Connecticut StateAgencies ("Regulations") require that the boiler emit NOx at a rate no greater than 0.25 Ibs/MMBtu ofheat input when operating on No. 6 fuel oil and 0.20 Ibs/MMBtu ofheat input when operating on natural gas.

4. In 1995, CL&P completedmodifications ofthe boiler's burnerand combustioncontrols, andbegan to test and adjust operating conditions, thereby reducing the boiler's NOx emission rates below its permitted, allowed and actual baseline emissions rates. Such modifications enabledCL&P's boiler to frequently meet and operate below the emission limitation specified in 

### Section 22a-174-22{e)ofthe Regulations.

5. After November 1, 1996, CL&Pmay obtain approval of actual reductions in NOx emissions, generatedby operating the boiler at a rate which is below 0.25 Ibs/MMBtu ofheat input when operating on No. 6 fuel oil and 0.20 Ibs/MMBtu ofheat input when operating on natural gas for use as emission reduction credits ("ERCs")

.
6 • Pursuant to Section 22a-174-22(j) ofthe Regulations, CL&P intends to acquire and generate approvedERCs until May 1, 2003 at the facility. Approved ERCs are defined for purposes ofthis Trading Agreement and Order as those for which the Commissioner has provided written authorization for use in compliance with Section 22a-174-22 ofthe Regulations. CL&P will acquire approvedERCs monthly on an as-neededbasis, as determinedby actual NOx emissions in the event that the 24-hour average exceeds the NOx emission limitations ofSection 22a-174-22(e) ofthe Regulations.

Date: 2 Whenproperly documentedby CL&P, and approvedby the Commissioner, the emission reductions identified above, and as computed in accordance with the terms ofthis Trading Agreement and Order, will conformto the 

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requirements Regulations. of Section 22a-174-22(j)(3) of the Specifically, the reductions will be:


### Realbecause they result in a reduction ofactual emissions released into the air, net ofany consequential increase in actual emissions resulting from shifting demand. The emission reductions are properlymeasured, recorded andreported.
Quantifiablebecause they are based on continuous emissionmonitoring data as applied in an appropriate reliable andreplicable protocol, providing the rate and total mass amount ofreduction. Surplus because they are not requiredby any Connecticut statute or regulation mandatedby a current 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 advanced control system is in place and operating, and an appropriate tracking system is in place to monitor all data required to verify and quantify the.creation ofERCs.

Enforceable because the ERCs are approvedby the Commissioner retrospectively after the submission by CL&P ofthe quarterly or semi-annual report that will document their creation.

8. As documented inAttachment 1, attached to and incorporatedby reference into this Trading Agreement and Order, 55 ERCs were createdby the boiler between November 1, 1996 and September 30, 1997 (37 during the
ozone season and 18 during the non-ozone season). Qf the 37 ozone season ERCs, 18 early emission reduction credits were createdbelow the standards prescribed in Section 22a-174-22a ofthe RegUlations (the NOx Budget Program) during 1997 by the boiler and shall be converted into allowances.

Date: 9.
Initials: Ten (10) percent ofthese ERes (6)

3 are retired and 

# <l4r/rrThe Connecticut Light and Power Company TradingAgreement and OrderNo. 8161

permanently removed from all calculations to assure a benefit to the environment, leaving 31 ERCs available for use (15 ozone season and 16 non-ozone season).

B. The Commissioner, in accordance with the provisions of this Trading Agreement and Order, pursuant to Section 22a-174- 22(d)(4) ofthe Regulations, will allow CL&P and approved
sources within Connecticut to use 31 tons ofNOx ERCs referenced in paragraph A.9. ofthis Trading Agreement and Order (15 during the ozone season and 16 during the nonozone season) for purposes ofcompliance under Section 22al74-22(j) and/or Section 22a-174-3(1)(5) ofthe Regulations to achieve a portion ofthe nitrogen oxide emission reductions required or as emission offsets for new sources. Upon sufficient documentation as prescribedbelow, the Commissionermay provide written approval ofadditional ERCs by CL&P retrospectively. Approved ERCs createdby CL&Pmay be held by CL&P or transferred to otherpersons. Such ERCs shall remain valid until they are used or until May I, 2003, whichever occurs first.

C. With the agreement ofCL&P, the Commissioner, acting under Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a-177 of the Connecticut General Statutes, orders CL&P as follows:

Date: 4 ERe generation. Forpurposes ofgenerating ERCs from the boiler at the facility, CL&P shall use 0.25 Ibs/MMBtu ofheat input when operating on No. 6 fuel oil and 0.20 Ibs/MMBtu ofheat input when operating on natural gas as the baseline emission rates for the boiler, or the proportionedbaseline emission rate set forth in footnote 2 ofparagraph C.10. ofthis Trading Agreement and Order, when simUltaneously operating on more than one fuel. CL&P shall use the above referenced baseline emission rate(s) when calculating the proportionedbaseline emission rate. When calculating ERCs, CL&P shall use the lower ofCEMrecorded NOx emission rate* or actual fuel usage data for the boiler in MMBtu/day, when determining heat input. Ten (10) percent ofall ERCs (tons) created by the boiler shall be retired by the facility and permanently removed from all calculations on a daily 

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basis to assure a benefit to the environment.

*This rate shall be calculatedpursuant to the methodology described in 40 Code of Federal Regulations Part 75.

2. ERC Use. Approved ERCs shall be acquired for the period beginning June 1, 1995 and continuing until CL&P achieves permanent compliance for the boiler with the emission standards in Section 22a-174-22{e) of the Regulations or until May 1, 2003, whichever occurs first. CL&P shall acquire approved ERCs, and document and record the amounts ofNOx emissions and ERCs used by the boiler each month, and shall maintain and provide such records in accordance with the following and Section 22a-174-4 of the Regulations, until May 1, 2003:

a. Before the first day of each month, calculate projected worst case ERCs required for the same calendarmonth as follows:

ERCs (tons) = {[estimated worst case NOx emission
rate in 1bs/MMBtu

- ((0.95) x {NOx RACT limit or proportioned emission rate calculated pursuant to Section 22a-174-22(fl(21 (AI ofthe Regulations in lbs/MMBtu))] x (Estimated fuel use in MMBtu)} 2000 pounds.

b. Acquire sufficient approved ERCs no later than the first of each month to assure compliance for, at a minimum, that calendarmonth. Excess ERCs from previous months can be applied to subsequent months. ERCs required shall be adjusted upwards by 100% if ERCs are not in CL&F's possession prior to use.

c. No later than the twentieth day ofeach month, calculate ERCs used in the preceding calendar month, as follows:

Date: 5 For the boiler on each day, determine whether the 24-hour average NOx emission rate is less than the baseline emission rate or greater 

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than the NOx RAeT limit.Trading Agreement and Order No. 8161

(2) When the boilerhas a dailyNOx emission rate (24-hour average) exceeding the NOx RAeT limit, calculate the amount ofERCs used, as follows:

ERCs (tons) = {[(CEM-recordedNOx daily average emission rate in lbs/MMBtu)

- ((0.95) x (NOx RACT limit orproportioned emission rate calculatedpursuant to Section 22a-174-22(f)(2)(A) ofthe Regulations in lbs/MMBtu))] x (actual fuel use inMMBtu)} 2000 pounds.

d. Maintain documentation to attest to the fact that ERCs used during the ozone season were generated during the ozone season. Generator certification ofthis fact shall be sufficient.

e. After full programreview, and ifthe Commissioner deems it appropriate! the Commissionermay allow the survival anduse ofthese ERCs beyondApril 30, 2003.

3. CL&P shall maintain records for the boiler showing daily NOxmass emissions, and actual NOx emission rates (24-hour average). CL&P shall alsomaintain records showing a monthly total ofall ERCs generated net of the ten (10) percent environmental discount.

4. In requesting ERC approval, CL&P shall provide documentation containingmonthly operating reports of actual fuel usage inMMBtu and actual heat input based upon CEM-recordeddata, daily actual NOxmass emissions and NOx emission rates (24-hour average), number of operating hours perday, andERCs generatedusing the baseline emission rate(s), or the proportionedbaseline emission rate, net ofthe ten (10) percent environmental discount.

5. No later than March 1 ofevery year after issuance of

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this Trading Agreement and Order, CL&P shall include with the Annual Emission Statement provided to the Commissioner, a record of each sale or other transfer, and use of any and all of the ERCs approved within and subsequent to issuance of this Trading Agreement and Order until all such ERCs have been used. CL&P shall also include actual NOx emissions from the boiler, and the amount of all ERCs used (including approved ERCs generated and/or purchased from other facilities), generated and/or approved for the previous calendar year. These reports will be on a form prescribed by the Commissioner. This reporting may cease if a central registry is approved by the Commissioner. Should CL&P choose to discontinue the generation of ERCs, CL&P will notify the Commissioner upon discontinuance.

6. In order to consider CEM-recorded NOx emission rates valid for ERC approval, all NOx and CO2/02 CEMs must comply with 40 Code of Federal Regulations Part 75.

7. CL&P shall retain records and supporting documentation
as described in this Trading Agreement and Order for a minimum of five years, commencing on the date such records were created. CL&P shall provide the records specified above to the Commissioner within thirty (30) days of receipt of a written request from the Commissioner.

8. Upon sufficient documentation that CL&P has met the requirements ofparagraphs C.1., C.3, C.4., and C.10., of this Trading Agreement and Order, the Commissioner may provide written approval of ERCs created by CL&P retrospectively, in addition to those approved in paragraph B. of this Trading Agreement and Order. Requests for approval of all subsequent ERCs created shall be submitted in writing to the Commissioner. Approved ERCs created by CL&P may be held or transferred to other persons. Such ERCs shall remain valid until they are used or until May 1, 2003, whichever occurs first.

Should CL&P choose to generate additional 9.

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# ~~fThe Connecticut Light and PowerCompany Trading Agreement andOrderNo. 8161

documenting these ERCs
or semi-annual basis.
on a monthlybasis. may be submittedon a Such reports shall be quarterly compiled

10. When the boiler has daily NOx emissions below the applicable baseline emission rate(s), or the proportionedbaseline emission rate, CL&P shall calculate the amount ofERCs generated as follows:

ERCs (tons) = {[Total heat input! ofall fuels in MMBtu

x ((proportionedbaseline emission rate2) - (the CEMrecorded NOx emission rate3))] + 2000 Ibs/tonJ x (0.90).'

I Heat input shall be calculated using the lower of CEM-recordeddata or actual fuel usage data in MMBtu per unit of fuel combusted.

2This rate shall be calculatedby l}multiplying the heat input ofeach fuel combustedby the baseline emission rate(s) for such fuel; 2) summing those products; and 3) dividing the sumby the total heat input. Ifthe boiler is operating exclusively on one fuel, CL&Pmay replace the proportionedbaseline emission rate with the applicable baseline emission rate, for that fuel.

3 This rate shall be calculatedpursuant to the methodology described in 40 Code ofFederal Regulations Part 75.

4Ten (10) percent ofall ERCs (tons) createdby the boiler shall be retiredby the facility andpermanently removed from all calculations on a daily basis to
assure a benefit to the environment.

11. As used in this TradingAgreement and Order, "Commissioner" means the Commissioner ofEnvironmental Protection oran agent ofthe Commissioner. "Ozone season" means the period fromMay 1 through September 30 in any given calendar year.

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12. Notification ofnoncompliance. In the event that CL&P becomes aware that it did not ormay not comply, or did not ormay not comply on time, with any requirement of this TradingAgreement and Order or ofany document required hereunder, CL&P shall immediately notify the Commissioner and shall take all reasonable steps to
ensure that any noncompliance or delay is avoided or, ifunavoidable, is minimized to the greatest extent possible. In so notifying the Commissioner, CL&P shall state in writing the reasons for the noncompliance or delay andpropose, for the,review and written approval of the Commissioner, dates by which compliance will be achieved, and CL&P shall comply with any dates which may be approved in writing by the Commissioner. Notification by CL&P shall not excuse noncompliance or delay, and the Commissioner's approval of any compliance dates proposed shall not excuse noncompliance or delayunless specifically so statedby the Commissioner in writing.

13. Certification ofdocuments. Any document, including but not limited to any notice, which is required to be submittedto the Commissioner under this Trading Agreement and Order shall be signedby a responsible corporate officer ofCL&P or a duly authorized representative of such officer, as those terms are 

### defined in Section 22a-430-3(b)(2) ofthe Regulations, and by the individual or individuals responsible for actuallypreparing such document, each ofwhom shall examine and be familiar with the information 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:

Date: 9 "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, including my inquiry of those individuals responsible for obtaining the information, the submitted information 

### is true, accurate and complete to the best ofmy knowledge andbelief. I

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understand that any false statementmade in the submitted information 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 53al57b ofthe Connecticut General Statutes, and in accordance with any other applicable statute."

14. Final Agreement and Order. This Trading Agreement and Order is the final agreement and orderby andbetween the Commissioner and CL&P with respect to the matters addressed herein, and shall not be modified without the written agreement ofbothparties.

15. False statements. Any false statement in any information submittedpursuant to this Trading Agreement and Ordermay 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 of the Connecticut General Statutes.

16. Notice oftransfer; liability ofCL&P and others. 

### Until CL&Phas fully compliedwith this Trading Agreement andOrder, CL&P shall notify the Commissioner in writing no later than fifteen (15) days after transferring all or anyportion ofthe facility, the operations, the site or the business which are the SUbject ofthis TradingAgreement 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. CL&P'S obligations under this Trading Agreement and Order shall not be affectedby the passage oftitle to anyproperty to any otherperson ormunicipality. Any future owner ofthe facility may be subject to the issuance ofa TradingAgreement and Order from the Comrnissioner.

Date: 10 Commissioner's powers. Nothing in this Trading Agreement and Order shall affect the Comrnissioner's authority to institute any proceeding or take any other action to prevent or abate violations oflaw, prevent 

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or abate pollution, recover costs and natural resource damages, and to impose penalties for violations of law which are willful or criminally negligent or for which penalties have not been specificallyprovided in this Trading Agreement andOrder, including but not limited to violations ofanypermit issuedby the Commissioner. Ifat any time the Commissioner determines that the actions takenby CL&Ppursuant to this Trading Agreement and Order have not fully achieved compliance with Section 22a-174-22 ofthe Regulations, the Commissionermay institute anyproceeding against CL&P and/or require CL&P to undertake further investigation
or further action.

18. CL&P's obligations under law. Nothing in this Trading Agreement and Order shall relieve CL&P ofother obligations under applicable federal, state and local law.

19. Access to records and facility. Any representative of the Department ofEnvironmental Protectionmay enter and inspect the facility and inspect and copy records within normal business hours without priornotice for the purposes ofmonitoring and enforcing the actions required or allowedby this TradingAgreement and Order.

20. No effect Qn rights ofQtherpersons. This Trading Agreement and Order shall neither create nQr affect any rights Qfpersons whQ Qrmunicipalities which are not parties tQ this Trading Agreement and Order.

21. No Creation ofProperty Rights. This Trading Agreement andOrderdoes not create any property rights with respect to these ERCs.

22. Notice to Commissioner ofchanges. Within fifteen (15) days ofthe date CL&Pbecomes aware ofa change in any information submittedto the Commissioner under this Trading Agreement and Order, or that any such information was inaccurate ormisleading or that any relevant information was omitted, CL&P shall submit the correct oromitted information to the Commissioner.

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23. Submission ofdocuments. Any document required to be submitted to the Commissionerunder this Trading Agreement andOrder shall, unless otherwise specified in writing by the Commissioner, be directedto:

Mr. DavidJawin Department ofEnvironmental Protection Bureau of

### AirManagement Compliance and FieldOperations Division Emissions Trading Unit 79 Elm Street Hartford, Connecticut 06106

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CL&P consents to the issuance ofthis 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 legallybindCL&P to the terms and conditions of the Trading**Agree~ent** and Order.

Signature: Type Name:
Type Title:

Date: Vice President April 28, 1999

Issued as a final consent order

Environmental Protection on issionerof

1999.

Arthur J. Rocque, Jr. Commissioner

CITY OFMONTVILLE LAND RECORDS MAILED CERTIFIEDMAIL, RETURN RECEIPT REQUESTED Certified Document No.

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