STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

STATE OF CONNECTICUT

AND

CITY OF NORWICH

DEPARTMENT OF PUBLIC UTILITIES

TRADING AGREEMENT AND

ORDER NO. 8119A

MODIFICATION NO.2

TRADING AGREEMENT AND ORDER MODIFICATION

In the matter of a Trading Agreement and Order between the Commissioner of

Environmental Protection ("Commissioner") and City of Norwich Department of Public

Utilities ("Norwich").

WHEREAS, the Commissioner and Norwich, having agreed to the tenns and

conditions set forth in Trading Agreement and Order No. 81l9A signed by the

Commissioner on April 29, 2003, and a modification thereto issued on March 21,2005,

do now, by mutual agreement, modify Trading Agreement and Order No. 8119A as

follows:

1. Delete paragraph A4. in its entirety and substitute the following therefor:

Emission testing perfonned on the dates indicated in Table 1, resulted in

NOx emission rates as follows:

Table 1

Emission Unit Fuel Heat Input FLER Allowable Date of Next

MMBtulhr Lbs/MMBtu Rate Stack Test Emission

LbslMMBtu Test Due

Rolls Royce #2 oil 249 .620 0.29 10119/04 10/19/09

2. Delete paragraph A6. and substitute the following therefor:

Reserved.

3. Delete the date May 1,2005, and substitute therefor May 1, 2009, in

paragraphs A7., A9., C.I., and C.2.a.

4. Delete paragraph A.I O. in its entirety.

( Printed on Recycled Paper)

79 Elm Street • Hartford. CT 06106-5127

An Equal Opportunity Employer
City ofNorwich

Department ofPublic Utilities

2

Trading Agreement and Order

No. 8119A Modification No.2

5. Delete paragraph C.2.d. and substitute the following therefor:

During the non-ozone season: Until May I, 2009, from October 1 through

April 30, inclusive, each year, the peaking unit shall, in addition to

meeting the 24-hour emission limit in Table 22-1 of Section 22a-174-22 of

the Regulations, meet a non-ozone season emission limit of 0.15

Ib/MMBtu. Prior to October 1, 2006, October 1, 2007 and October I,

2008, Norwich shall estimate and acquire the amount ofDERCs or

allowances required for such non-ozone season needed to comply with

Section 22a-174-22(e)(3) ofthe Regulations as follows:

Estimated DERCs (tons) use = [Estimated fuel use in MMBtu from

October 1 through Apri130 x (allowable

emission rate in Ibs/MMBtu - (0.95 x 0.15

Ib/MMBtu))] + 2000 lbs/ton

6. Delete paragraph C.2.e. and substitute the following therefor:

No later than May 31 of2007, 2008 and 2009, in addition to the DERCs

retired pursuant to paragraph C.2.b. ofthis Trading Agreement and Order,

Norwich shall calculate and permanently retire DERCs used in the

preceding non-ozone season as follows:

Actual DERCs (tons) used = [Actual fuel use in MMBtu from October 1

through April 30 x (allowable emission rate

in Ibs/MMBtu - (0.95 x 0.15 Ib/MMBtu))]

+ 2000 Ibs/ton

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

Annual Emission Statement and Non-Ozone Season Emission Statement.

No later than March I for the previous calendar year and July 30 (for the

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

after issuance ofthis Trading Agreement and Order, Norwich shall

provide to the Commissioner, a 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 Norwich's possession. Norwich shall also

include actual NOx emissions from the peaking unit 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.
8. Delete paragraph C.7. and substitute the following therefor:

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

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

a general account or use an existing compliance account or

overdraft account in EPA's NOx Allowance Tracking System

("NATS"); and

Trading Agreement and Order

No. 8119A Modification No.2

3

In addition, Norwich shall provide to the Commissioner an annual report

documenting the progress and results ofthe environmentally beneficial

program referenced in paragraph A.8 ofthis Trading Agreement and

Order, as approved in Trading Agreement and Order 8119.

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 22a-174-22 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 ID

CT0000000300 in the NATS).

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

Norwich may use NOx allowances, until May 1,2009, for the peaking unit

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;

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

upwards by 100% ifDERCs are not in Norwich'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. Norwich shall permanently retire the

quantity ofDERCs equivalent to the excess emissions plus a 100%

premium within sixty (60) days of Norwich's discovery ofthe DERC

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

the Commissioner in accordance with paragraph C.30. ofthis Trading

Agreement and Order.

City ofNorwich

Department of Public Utilities
FLER Exceedance. Noncompliance with an established FLER shall

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

12. Delete paragraph C.14. and substitute the following therefor:

Trading Agreement and Order

No. 8ll9A Modification No.2

4

Extension. No later than May 1, 2009, with respect to the peaking unit,

Norwich shall comply with the requirements of Sections 22a-174-22(d)(1)

and 22a-174-22(d)(2)(A) ofthe Regulations and amendments thereto.

There is no assurance that the Commissioner will grant a written extension

ofthis Trading Agreement and Order.

Future Compliance Report. On or before September 1, 2008, Norwich

shall submit a report in writing to the Commissioner, as directed in

paragraph C.31. ofthis Trading Agreement and Order, indicating how the

facility shall comply with Section 22a-174-22 ofthe Regulations with

respect to the peaking unit on and after May 1,2009.

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" means the Commissioner or a representative

ofthe Commissioner; "Non-ozone season" means the period from October

subject Norwich 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 Ibs/MMBtu,

multiplied by the total heat input during the period of noncompliance

divided by 2000 lbs/ton. Ifthe period of noncompliance is not known, the

time period from the completion ofthe 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. Norwich shall permanently retire DERCs calculated in

accordance with the above plus a 100% premium within sixty (60) days of

Norwich's discovery ofthe FLER exceedance. Norwich shall report any

FLER exceedance to the Commissioner in accordance with paragraph

C.30. ofthis Trading Agreement and Order.

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

10. Delete paragraph C.I O. and substitute the following therefor:

City ofNorwich

Department of Public Utilities
.

...

Certified Document No. 7002 2030 0006 5680 7444

Date

Trading Agreement and Order

No. 8119A Modification No.2

'l).tJUJ~WBePt of Public Utilities

GENE-Mt.. M..Pt~a-

-------=B=-Lu-\ 0 Co

6

Type Title:

Date:

Type Name:

Signature:

MAILED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

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

Norwich hereby consents to the entry ofthis modification to the Trading Agreement and

Order without further notice.

City of Norwich

Department of Public Utilities