STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the maner of

The State ofConnecticut and

.AJgonquin Gas Transmission ~ompany

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Trading Agreement

and Order No. 8123A

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Whereas, the Commissioner ofEnvironmental Protection ("Commissioner") and AJgonquin

Gas Transmission Company (<<Algonquin") 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 of discrete emission reduction credit (<<DERe") trading and continuous emission

reduction credit ("CERe") trading 10 reduce nitrogen oxide (''NOx'') emissions will achieve

this result in a timely and cost-effective manner.

A. At the request and with the agreement ofiugonquin, the Commissioner fmds the

following:

1. This Trading Agreement and Order supercedes Trading Agreement and Order

8123 issued on April 18, 1997 and Trading Agreement and Order 8123

Modification issued April 29 1999.

2. Algonquin is a corporation, which owns and operates a natural gas compressor

station located at Shunpike Road, Cromwell, Connecticut ("facility").

3. At the facility, Algonqujn operates one Solar Centaur T-4700 Narural Gas

Turbine Engine ("unit C-7").

4. To reduce excess NOx emissions Algonquin added dry low-NOx emission

control on unit C~ 7 so that emissions frequently can be kept below the NOx

emission limitations established by Section 22a-174-22(e) oftbe Regulations of

Connecticut State Agencies ("Regulations").

5. Emission testing perfonned on the dates indicated in Table I, resulted in a NOx

emission rates as follows:

Table 1

Emission Fuel Heat Input FLER Baseline Allowable Date of No'"

Unit MMBtuIhr LbsIMMBru emission rate emission Emission Emission

LbsIMMBtu limit Tost Test Due

IbsIMMBtu

C·; Natural gas 46 I .145 .410 .170 3/14/00 I 3/14/05

(Primcd 00 Rccyclcd P'pcr)

79 Elm Snccr • H.nford, CT 06106 - 5127

II np:lldcp.S:.l c. CI.1l5

.... " Equgl OpPOrll/,nilY '/nploy"
Algonquin Gas Transmission Company Trading Agreement and

Order No. 8123A

6. Pursuant to Section 22a-174·22G) ofthe Regulations, Algonquin intends to

generate DERCs and CERCs until May 1,2007.

7. CERes will continue to be created from the difference between the baseline

emission rate of.(l.41 IbsIMMBlU and the permit limitation ("allowable limit")of

0.17 IbsIMMBlU, resulting in a stream of CERCs of 0.24IbsIMMBlU.

Algonquin indicates that 30 tons per year of offsets, based on a heat input of

250,000 :M:MBtuS, would be created, subject to any use restrictions that may be

applicable to the user under Section 22a-174-3a(I)(5) ofthe Regulations.

8. When properly documented by Algonquin, and approved by the Commissioner,

the emission reductions identified above, and as computed in accordance with

the terms ofthis Trading Agreement and Order, will conform to the

requirements of Section 22a-174-3a(l) (A) through (F) ofthe Regulations.

9. The Commissioner, pursuant to Section 22a-174-22(d)(3) of the Regulations,

previously approved the NOx DERCs referenced in Table 2 of this Trading

Agreement and Order. DERCs are subject to the vintage restrictions in this

Trading Agreement and Order. Dates that after which the unused DERCs will

no longer be eligible for use as a result ofthe vintage restrictions are provided

in Table 2 ofthis Trading Agreement and Order in the expiration date column.

Table 2

p re~OUSIV aoorovedNO DERC , x s

Year of Ozone season DERC serial Ozone Non-Ozone season DERC Non- Expiration

Generation numbers serial numbers Ozone Date

1994-1996 Not assilWed 8 Not assilmed 22 12131/04

10. As documented in Attaclunent 1, attached to and incorporated by reference into this

Trading Agreement and Order, 15 tons of ozone season NOx DERCs and 101 tons

of non-ozone season NOx DERCs were generated by unit C-7 bet\.Veen January 1,

1997, and December 31, 2002

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B.l. The Commissioner, in accordance with the provisions ofthis Trading Agreement and

Order, pursuant to Section 22a-174-22(d)(3) of the Regulations, will allow Algonquin and

approved sources within Connecticut to use the NOx DERCs referenced in paragraphs

A.9. and A.l O.of this Trading Agreement and Order ior purposes of compliance under

Section 22a·174-22(j) of the Regulations to achieve a portion of the nitrogen oxide

emission reductions required by Section 22a-174-22 of the Regulations. DERC creation

serial numbers assigned by the Department of Environmental Protection ("Department") to

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Algonquin Gas Transmission Company Trading Agreement and

Order No. BI23A

these approved reductions ofNOx emissions referenced in paragraph A.l O. are provided in

Table 3 ofthis Trading Agreement and Order:

Table 3

Year of - Ozone season DERC serial Ozone Non~Ozone season DERC Non- Expiration

Generation numbers serial cumbers Ozone Dale

1997-1999 Not assi~ed 7 Not assi2D.ed 52 12131/04

2000 N/A I 0 croo/8123(DC)Noxnozl-19 19 12131/05

2001 I CT00I8123(DC)Noxoz1·2 I 2 CTOO/8123(DClNoxnozl·14 14 I 12131/06

2002 CT00I8123{DC)Noxozl·6 6 CTOO/8123(DC)Nonxozl-16 16 I 12131107

B.2. Upon sufficient documentation as prescribed in this Trading Agreement and Order,

Algonquin may generate additional DERCs. Upon issuance of an addendum to this

Trading Agreement and Order the Commissioner may approve the generation of additional

DERCs by Algonquin retrospectively. Approved DERCs generated by Algonquin m.y be

held by Algonquin or transferred to other persons in accordance with this Trading

Agreement and Order.

C. With the agreement of Algonquin, the Commissioner, acting under Sec~ions 22a-6,

22.-171, 22a-174, 22.-176, and 22.-177 ofthe Connecticul General Statutes, hereby

orders Algonquin as follows:

1. Upon issuance ofthis Trading Agreement and Order, Algonquin may hold or transfer to

other persons approved DERCs as allowed under this Trading Agreement and Order

until April 31, 2007.

2. Upon issuance ofthis Trading Agreement and Order, Algonquin may hold or transfer to

other persons approved DERCs generated from a continuous rate of .24 lbs!.MMBtu as

allowed under this Trading Agreement and Order until April 31, 2007.

3. DERC 2:eneration:

a. Until April 31, 2007 Algonquin shall calculate the amount ofDERCs generated

as follows:

DERCs (tons) ([Actual fuel use fuels in MMBru x (allow.ble emission limitFLER)] x (.9 x .9)1.,. 2000 lbs/ton)

b. Until April 31, 2007 Algonquin shall calculate the amount of DERCs generated

from the continuous rate of.24 Lbsl MMBtu as follows:

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Algonquin Gas Transmission Company Trading Agreement and

Order No. 8123A

DERCs (tons) = {[Acrual fuel use fuels in MMBru x \Baseline emission limitAllowable emission linn)] x (.9 x .9) .;. 2000 Ibslton}

Where:

-Allowable emission limit- in lbslM11Btu as shown in Table 1 ofthis

Trading Agreement and Order.

-.EL&R= full load emission rate in IbsflvfMBtu as shown in Table 1 of this Trading

Agreement and Order.

- Baseline emission limit= in Ibs/M1v:1Bru as shown in Table 1 of this Trading

Agreement and Order. The Commissioner reserves the right to modify such

baseline emission rate to meet any new requirements which may be established

subsequent to this Trading Agreement and Order or as a result of additionaJ

approved stack testing.

I Ten (10) percent of the DERCs generated by the facility will be permanently removed from all

calculations to assure a benefit to the environmenL.'\.o additional ten (10) percent ofthe

DERCs generated by the facility will be permanently removed from all calculations due to

uncenainties from a single approved emission tesL

4. In order to maintain the creation of CERCs and DERCs, Algonquin must meet the

permit limit of 0.17 IbsJrvfMBtu. However, if at any time after issuance ofthis Trading

Agreement and Order, Algonquin exceeds this limit stated above in this paragraph,

Algonquin shall conduct NOx emission testing of unit C-7 on or before sixty (60) days

after the exceedance of the above limit in accordance with the requirements specified in

paragraph C.S.i. through C.S.viii.

5. Upon issuance ofthis Trading Agreement and Order, if Algonquin has reason to believe

unit C-7 may be exceeding 0.17 Ibs/MlvfBtu, Algonquin shall conduct NOx emissions

testing of unit C-7 on or before sixty (60) days after the exceedance of the above limits

in accordance with the following:

1. Algonquin shall submit to the Commissioner for his review and

wrinen approvaJ an Intent-To·Test ("ITT") protocol not less than

thiny (30) days prior to the emissions testing required pursuant to

this paragraph and paragraph CA, ofthis Trading Agreement and

Order. The m protocol shall include at least:

11 The Depanment's Bureau of Air Management Test Form No. I, "Intent

to Test",

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Algonquin Gas Transmission Company Trading Agreement and

Order No. 8123A

lll. System operating parameters indicative of the highest operating rate

since the March 14, 2002 stack test or a more recent Department

witnessed emission test, including, but not limited to: fuel firing rate, and

NOx emissions rate.

IV. The ITT protocol shall provide that Algonquin shall perform testing

as specified in Sections 22a-174-5 and 22a-174-22 of the

Regulations, including operating unit C-7 at not less than ninety

percent (90%) ofits maximum rated capacity limit or highest

operating rate since its last/previous emissions test, whichever is

higher.

v. Algonquin shall perform all testing required by this Trading

Agreement and Order in accordance with the approved ITT protocoL

Vi. In conducting and performing the testing required by this Trading

Agreement and Order, and analyzing the results ofsuch testing,

Algonquin shall adhere to methods specified in Sections 22a-174-5

and 22a-174-22 oftbe Regulations and as approved by the United

States Environmental Protection Agency ("EPA'') and the

Commissioner.

Vll. Algonquin shall schedule all emissions testing to allow the

Commissioner to be prese-nt during such testing and to

independently verify facility operations, air pollution control

equipment parameters, and testing procedures.

Vlll. Within 30 days after completing any emissions testing required by

this Trading Agreement and Order, Algonquin shall submit to the

Commissioner a wrinen report providing the results ofsuch testing;

within 15 days of a notice from the Commissioner indicating any

deficiencies in such report, Algonquin shall submit a revised report.

6. !\.lgonquin shall make and keep records for Unit C-7 of: fuel use, NOx mass

emissions, the amount of all CERes and DERCs generated eac.h month, and

running totals of each ofthe foregoing for the current calendar year.

7. Record Keeping. Algonquin 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. Algonquin shall provide the

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Algonquin Gas Transmission Company Trading Agreement and

Order No. 8123A

records specified above to the Commissioner within thirty (30) days ofreceipt of a

written request from the Commissioner.

8. Annual Emission Statement. No later than March 1 of every year after issuance of

this Trading Agreement and Order, Algonquin 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 ofthe CERCs and DERCs approved within and

subsequent to issuance of this Trading Agreement and Order until all such CERCs

and DERCs have been used or are no longer in Algonqu.in's possession. Algonquin

shall also include actual NOx emissions from Unit C-7 and the amount of all

CERes and DERCs, approved and/or for the previous calendar year. These reports

shall be on a fonn prescribed by the Commissioner and shall be in monthly

increments. Should ..<\..lgonquin choose to discontinue the generation of CERCs and

DERCs. Algonquin will notify the Commissioner upon discontinuance.

9. VintalZe Restriction. For the pwposes of compliance with Section 22a-174-22 of

the Regulations, DERCs/alIowances shall only remain valid for five (5) calendar

years from the year of the generation/allocation ofsuch DERCs/allowances.

DERCs/allowances generated/allocated more than five (5) calendar years ago are

not valid for use for compliance with Section 22a-174-22 ofthe Regulations.

Notwithstanding the above the DERCsiallowances generated/allocated prior to

calendar year 2000 shall be valid for use until December 31, 2004.

10. Extension. No laler than April 30, 2007, with respect to unit C-7, Algonquin shall

comply with the requirements of Subdivision 22a-174-22(d)(I) ofthe Regulations.

However, after full program review ofthis and other Trading Agreements and

Orders and, if determined to be appropriate, the Commissioner may grant a written

extension ofthis Trading Agreement and Order.

11. Full compliance. Algonquin shall Dot 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.

12. Approvals. Algonquin shall use best efforts to submit to the Commissioner all

documents required by this Trading Agreement and Order in a complete and

approvable form. Ifthe Commissioner notifies Algonquin that any document or

other action is deficient, and does not approve it with conditions or modifications, it

is deemed disapproved, and Algonquin 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 Corrunissioner's notice of deficiencies. In

approving any document or other action under this Trading Agreement and Order,

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/'/ Algonquin Gas Transmission Company Trading Agreement and

Order No. 8123A

the Conunissioner may approve the document or other action as submined 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 Uris paragraph shall excuse noncompliance or delay.

13. 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. The date of "issuance"

Of this 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.

14. 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. ~e 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 w.ord "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 submined or perfonned. by the next day which is not a SatUrday,

Sunday or Connecticut or federal holiday.

15. 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 be signed by Algonquin or, if Algonquin is not an

individual, by an individual who is an authorized representative of the Respondent,

in .accordan~e with Section 22a·174-2a(a) ofthe Regulations of Connecticut State

Agencies, and by the individual(s) responsible for actually preparing such . .

document, and each such individual 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 i..,dividuals responsible for

obtaining the information, that the submitted infonnation is true, accurate and

complete to the best ofmy lmowledge and belief. I understand that any false

statement made in the submitted information is punishable as a criminal offense

under Section 53a·157b ofthe Connecticut General Statutes and wyother

applicable law."

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Algonquin Gas Transmission Company Trading Agreement and

Order No. 8123A

16. Noncompliance. This Trading Agreement and Order is a final order ofthe

Commissioner with respect to the maners addressed herein, and is nonappealable and

immediately enforceable. Failure to comply with this Trading Agreement and Order

may subject Algonquin to an injunction and penalties.

17. False statements. Any false statement in any information submitted pursuant to this

Trading Agreement and Order is punishable as a criminal offense under Section 53a·

15Th of the Connecticut General Statutes and any other applicable law.

18. ooce oftransfer: liability of A1e:onouin. Until Algonquin has fully complied with this

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

later than 15 days after transferring all or any portion ofthe facility, the operations, the

site or the business which is the subject oftrus Trading Agreement and Order or after

obtaining a new mailing or location address. Algonquin'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.

19. 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. !fat any

time the Commissioner determines that the actions taken by Algonquin pursuant to this

Trading Agreement and Order have Dot 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 Algonquin to

undertake further investigation or further action to prevent or abate violations or

pollution.

20. Ahzonauin's obli2ations under law. Nothing in this Trading Agreement and Order shall

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

21. No assurance by Commissioner. No provision of this 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 Algonquin pursuant to this

Trading Agreement and Order will result in compliance or prevent or abate pollution.

22. Access to facilitv. AIJy representative ofthe Department ofEnvironmental Protection

may enter the facility without prior notice for the purposes ofmonitoring and enforcing

the actions required or allowed by this Trading Agreement and Order.

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Algonquin Gas Transmission Company Trading Agreement and

Order No. 8123A

23. No effect on rights of other oersons. 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.

24. No Creation ofProperty Ri2hts. This Trading Agreement and Order does not create

any property rights with respect to these DERCs and CERes.

25. Notice to Commissioner of changes. Within 15 days ofthe date Algonquin becomes

aware of a change in any information submined 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, Algonquin shall submit the

correct or omitted information to tbe Commissioner.

26. Notification of noncomoliance. In the event that Algonquin becomes aware that it did

not or may not comply, or did not or may not comply on time, with any requirement of

this Trading Agreement and Order or of any document required hereunder, Algonquin

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 of

the initial notice, Algonquin 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 Algonquin shall comply v.tith any dates which may be approved in

writing by the Commissioner. Notification by Algonquin 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.

27. 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:

Mr. Michael Lafleur

Department ofEnvironmental Protection

Bureau ofAir Management

Emissions and Credit Trading Section

;9 Elm Street

Hartford, Connecticut 06106-512i

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Algonquin Gas Transmission Company Trading Agreement and

Order No. 8123A

Algonquin 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 Algonquin to the tenns and conditions of the Trading Agreement and Order..

Algonquin, Inc.

Date: T - 28- 20(73

Issued as a final order of the Commissioner of

Environmental Protection on _-<&,,'!/:Jjf' =:':;)='..J.~_3=-O=-_~, 2003

("')~ IC da-dr

f\iih.t1r J. Rocque, Jr.:::>

/ Cofumissioner

TOWN OF CROMWELL LAND RECORDS

V

Mlill..ED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

Certified Document No.

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