# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of The State ofConnecticut and Devon PowerLLC ) ) ) ) ) Trading Agreement and Order No. 8181 A

Whereas, the Commissioner ofEnvironmental Protection ("Commissioner") and Devon PowerLLC ("DP'j agree that it is in the public interest that they work cooperatively to improve the air quality within the State ofConnecticut and that the use ofdiscrete emission reduction credit ("DERe") trading to reduce nitrogen oxide (''NOx'') emissions will achieve this result in a timely and cost

### effective manner:

A. At the request and with the agreement ofDP, the Commissionerfinds the following: 

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........ 1. This Trading Agreement and Order supercedes Trading Agreement and Order 8181 issued on January 12, 2000
. 2. DP is an exempt wholesale electric generating companywith its principal place of business in Sewickley, PelU1sylvania. DP O\lmS one (1) piece offuel-burning equipment ("peaking unit") identified in Table 1 oftrus Trading Agreement and Order. This peaking unit is a combustion turbine operated at Naugatuck Avenue, Milford, CT ("facility"). 3. Emission testing perfonned on the dates indicated 

### in Table 1, resulted in a NOx emission rates as follows:


### Table 1 Facility/ Fuel Heat Input Stack Test FLER Allowable Date of Next Peaking Unit MMBtuIbr (ppmvd) lbsIMMBtu Rate Stack Stack IbsIMMBtu Test Test Due Devon-IO #2 oil 

### 256 181.6 0.74 0.29 4/16/01 

# I 4/16/06

(Printed on Recycled Paper) 79 Elm Street • Hartford, CT 06106·5127 http://dep.stalc.cl.US An Equa' Opponuniry**Employ~'**Devon PowerLLC 2 Trading Agreement and Order No. 8181 A 4. DP exceeds the NOx allowable emission rate for the peaking unit specified in Section 22a-174-22(e) ofthe Regulations as shown in Table I ofthis Trading Agreement and Order. 5. Pursuant to the DepartmentofEnvironmental Protection's "Credit Trading/or Sources with 'Jrrrgu/arNOxEmissions"policy, with arevised date ofFebruary 27, 2001, anachedJ'iereto and incorporated by reference into this Trading Agreement and Order as Exhibit I, the peaking units have peakdailyNOx emissions greaterthan three times the average daily emissions during the ozone season and are therefore considered sources with irregularNOx emissions. 

### 6. Pursuant to Section 22a-174-220) ofthe Regulations, during the non-ozone season, DP intends

# '0 acquire approved DERCs until May I, 2005 for the peaking units. Pursuant to Section 22a-174-22(j) ofthe Regulations, during the ozone season, DP intends to acquire approved Budget discrete emission reduction credits ("BDERCs") until May I, 2005 for the peaking units. B. The Corrunissioner, in accordance with the provisions ofthis Trading Agreement and

...-. Order, and pursuantto Section 22a-l74.22(j) ofthe Regulations, hereby allows DP to 

# '",J comply with Section 22a-174-22 ofthe Regulations through use ofDERC and BDERC trading. C. With the agreement ofDP, the Commissioner, acting under Sections 22a-6, 22a-171, 22a174, 22a-176, and 22a-l77 ofthe Connecticut General Statutes, orders DP as follows:

I. Upon issuance ofthis Trading Agreement and Order, at the facility, DP shall comply with Section 22a-174-22 ofthe Regulations through DERC trading. Until DP achieves pennanent compliance with the.emission standard in Section 22a-174-22(e) ofthe regulation orby May I, 2005 whichever occurs earlier:

a. DP shall use approved DERCs 

### as required under this Trading Agreement and Order; b. DP shall have in its possession sufficient approved DERCs to meet applicable NOx emission limits as allowed WIder this Trading Agreement and Order; and

c. DP shall comply during operation ofthe peaking units with the FLERS shown in Table I ofthis Trading Agreement and Order.

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## , '."/Devon PowerLLC

2. DERC use 3 Trading Agreement and OrderNo. 8181 A

a. Until May 1, 2005, before the first day ofeach month, DP shall have in its possession sufficient approved DERCs for the peaking units based on the following calculations. Before the first day ofeach month, DP shall estimate DERCs required for such month for the peaJclng units as follows. i. At all times (mass calculation):

Estimated DERCs (in tons) = {(estimated fuel use in MMBtu) 

### x ((FLER)

- (0.95 

### x NOx allowable emission limit))) +2000 pounds/ton 'Where: -Allowable emission limit- in Ibs/1'vfMBtu as shown in Table 1 ofthis

Trading Agreement and Order.

- FLER= full load emission rate in Ibs/1'vfMBtu as shown 

### in Table 1 of this

Trading Agreement and Order.

- Discount (.95)= %5 design margin applied to the allowable limit. ii. During the ozone season only (peak day calculation): the maximum actual excess NOx emissions (in lbs) on any ofthe days projectedby the Commissionerto be "moderate to unhealthful," "unhealthful," or "very unhealthful," divided by 3 and then divided by 13 (with the result 

### in tons): Estimated DERCs (in tons) = [(MaximlUI1 estimated excess NOx in Ibs) + 3] +[13Ibs/day/ton] b. No laterthan October 30 of2003, and 2004 calculate and permanently retire the DERCs used in the preceding ozone season as the greater of: i. the actual total excess emissions for the ozone season in tons, as follows:
DERCs (in tons) = {(actual fuel use in MMBtu) 

### x ((FLER)

- (0.95 

### xNOx allowable emission limit))}+ 2000 pounds/ton OR

### Devon Power LLC 4 

### Trading Agreement and Order No. 8181 A

c. ii. 

### the maximum actual excess NOx emissions (in lbs) on any ofthe 

### days projected by the Commissionerto be "moderate to unhealthful", "unhealthful", or "very unhealthful", divided by 3 and then divided by 13 

### (with the result in tons):



# , Actual DERCs (tons) used [(Actual excess NOx in lbs) .;.3].;. [13 lbsldaylton) 

### As described in Exhibit 1ofthis 

### TradingAgreement and Order, to the extent that DERCs used to offset on peak daybasis exceed the total mass excess emissions, remaining DERCs may beused in the non-ozone season in the same or subsequent years tmough May 1, 2005. During the non-ozone season starting on October 1,2003: In 

### addition to meeting the 24-bouremission limit 

### in Table 22-1 ofSection 22a174-22 ofthe Regulations, meet anon-ozone season emission limit of0.15 IblMMBtu. Priorto October I, 2003 and October 1,2004, DP shall estimate 

### and acquire sufficientDERCs andlor allowances needed to comply with Section 22a-174-22(e)(3) ofthe Regulations as follows: Estimated DERCs (tons) [Estimated fuel use in MMBtu from October I 

### through April 30x (Estimated maximum emission rate 

### in IblMMBtu during October I through April 30

- (0.95 x 0.15 IblMMBtu))J ).;. 2000 poundslton.



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-

# - d. No later than May 31 of2004, calculate and permanently retire DERCs used 

### in the precedingnon-ozone season as follows: Actual DERCs (tons) [Actual fuel use 

### in MMBtu from October I through 

### April 30x (average emission rate in lblMMBru during October I through April 30

- (0.95 x 0.15 IblMMBtu))] .;. 2000 poundslton. 

### BDERCs shall onlybeused by otherNOx budgetprogram sources located in Connecticut. BDERCs shall only be used to offset ozone season excess emissions, a.TId shall not be used for compliance during the non-ozone season. BDERCs generated during agiven year shall onlybe used through the following ozone season. BDERCs are subject to all DERC 

### requirements set forth in this Trading Agreement and Orderexcept for those requirements pertaining solely to non-ozone season DERCS and as otherwise may be provided..Devon Power LLC 5 Trading Agreement and OrderNo. 8181 A



### .. 4. DP shall make and keep records of: daily fuel use and fuel type; excess NOx emissions; the number ofDERCs in its possession, created, purchased and used (by serial number if assigned) each month 

### in accordance with the appropriate emission rates and limits in this Trading Agreement and Order; the numberofDERCs used during the ozone season and non-ozone season (the remainderofthe year); during the ozone season, the ozone 

# , classification as fore«asted bythe Commissioneron the previous day; as well as documentation attesting to the fact that approved DERCs used during the ozone season were generated during the ozone season. Generator certification ofthis fact shall be sufficient. DP shall maintain and submit such records to the Commissioner 

### in accordance with Section 22a-174-22 ofthe Regulations. 5. Record Keeping. DP shall retain records and supporting documentation as described in this Trading Agreement and Orderfor aminimum offive years, commencing on the date such records were created. DP shall provide the records specified above to the Commissionerwithin thirty (30) days ofreceipt ofawritten request from the Commissioner. 6. Annual Emission Statement. No laterthan March I ofevery year afterissuance ofthis Trading Agreement and Order, DP shall include with the Annual Emission Statement provided to the Commissioner, arecord ofeach sale or othertransfer, and use ofany and all ofthe DERCs approved within and subsequent to issuance ofthis Trading Agreement and Orderuntil all such DERCs have been used or are no longer in DP's possession. DP shall also include actual NOx emissions from the peaking units and the amount ofall DERCs used (including serial numbers (ifassigned) and approved DERCs generated andlorpurchased from other facilities), generated and/or approved for the previous calendaryear. These reports shall be on a fonn prescribed by the Commissioner and shall be in monthly increments. Should DP choose to discontinue the generation ofDERCs, DP will notify the Commissionerupon discontinuance. 7. Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, DP may use NOx allowances, pursuant to Section 22a-174-22G) ofthe Regulations to achieve all or a portion ofthe reductions required by Section 22a-174-22 ofthe Regulations. Any allowance used for compliancewith Section 22a-174-22(e) ofthe Regulations shall be subjectto all restrictions and/orrequirements applicable to DERCs contained 

### in this Trading Agreement and Order. Each allowance used for compliance with Section 22a174-22 ofthe Regulations shall be equivalent to one discrete emission reduction credit and shall be deducted from DP's. Ox BudgetProgram compliance account upon such use. Allowances shall be considered used for compliance with Section 22a-174-22 ofthe Regulations when they are transferred from the facility's compliance account or overdraft account to a State ofConnecticutNOx allowance retirement account, account ID CT0000000300 in the NOx Allowance Tracking System.Devon Power LLC 6 Trading Agreement and OrderNo. 8181 A

8. DERC Doublimz. At a minimum, DERCs required shall be adjusted upwards by 100% if DERCs are not in DP's possession for use prior to the first day ofeach month or applicable season. Howeverbased on the gravity ofthe noncompliance, the Commissionermayrequire additional upwards adjustment. 

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" 9. Vintage Resniction. For the purposes ofcompliance with Section 22a-174-22 ofthe Regularions, DERCsiallowances shall onlyremain valid for five (5) calendaryears from the year ofthe generation/allocation ofsuch DERCsiallowances. DERCs/allowances older than five (5) calendar years from their creation/allocation are Dot valid for use for compliance with Section 22a-174-22 ofthe Regulations. Notwithstanding the above, DERCs/allowances generated/allocated prior to calendar year 2000 are valid for use for compliance with Section 22a-174-22 ofthe Regulations up to and including December 31, 2004. 10. FLERExceedance. Noncompliance with an establishedFLER shall subjectDP to make restitution by matching the quantity ofemissions ("true up") caused by the exceedance plus a 100% premium. The true up in tons ofDERCs shall be equal to the FLER exceedance in IbsIMMBtu, multiplied by the total heat input during the period of noncompliance divided by 2000 Ibs/ton. Ifthe period ofooncompliance is not known, the time period from the completion ofthe last/previous Department 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 anyproceeding or take any other action to require additional upward adjustmept, based on the gravity ofany alleged noncompliance or violation oflaw. 11. FLERModification. FLERs set forth in Table 1 ofthis Trading Agreement and Order maybe modified only after the consent ofthe Commissionerby written modification of this Trading Agreement and Order. 12. Emissions Testing. Pursuant to Section 22a-174-22(k) ofthe Regulations, DP shall conduct NOx emission tests ofthe peaking units at least once every five years commencing from the dates ofthe NOx emission tests for the peaking units as provided in Table 1 ofthis Trading Agreement and Order. 13. Extension. No laterthan May 1, 2005, with respect to the peaking units, DP shall comply with the requirements ofSection 22a-174-22(d)(I) ofthe Regulations. However, after full program review ofthis and otherTrading Agreements and Orders and, ifdetennined to be appropriate, the Commissioner may grant a v..rrinen extension ofthis Trading Agreement and Order.Devon Power LLC 7 Trading Agreement and OrderNo. 8181 A



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'. 14. Future Compliance Report. On orbefore September 1,2004, DP shall submit a report indicating how the facility shall comply with section 22a·174·22 ofthe Regulations with respect to the Peaking units on and afterMay 1,2007. 15. Full compliance. DP shall not be considered in full compliance with this Trading Agreement and

### Ord~ hntil all actions required by this Trading Agreement and Orderhave been completed as approved and to the Commissioner's satisfaction. 16. Approvals. DP shall use best effons to submit to the Commissioner all documents required by this Trading Agreement and Order in acomplete and approvable form. lfthe Commissionernotifies DP that any document or other action is deficient, and does not approve 

### it with conditions ormodifications, it is deemed disapproved, and DP shall correct the deficiencies and resubmit it within the time specified by the Commissioneror, ifno time is specified by the Commissioner, within 30 days ofthe Commissioner's notice of deficiencies. In approving anydocument or other action underthis Trading Agreement and Order, the Commissionermay approve the document or other action as submitted or perfonned or with such conditions ormodifications as the Commissioner deems necessary to carry out the purposes ofthis Trading Agreement and Order. Nothing 

### in this paragraph shall excuse noncompliance ordelay
. 17. Definitions. As used in this TradingAgreement and Order, "Commissioner" means the CommissionerofEnvironmental Protection or an agent ofthe Commissioner. "Ozone season" means theperiod from May 1 through September 30 in any given calendaryear. The date of"issuance" ofthis Trading Agreement and Orderis the date the Trading Agreement and Orderis 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 Commissionerunder this Trading Agreement and Order, including butnot limited to notice ofapproval or disapproval of any document or other action, shall be the date such notice is deposited in the U.S. mail oris 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 Orderto be submined orperformed by adate which falls on a Saturday, Sundayor a Connecticut orfederal holiday shall be submitted orperfonned by the next day which is not a Saturday, Sunday orConnecticut or federal holiday 19. Cenification ofdocuments. Any document, including but not limited to any notice, which is required to be submined to the Commissionerunder this Trading Agreement andDevon PowerLLC 8 Trading Agreement and Order 0.8181 A Order shall be signed by DP or, ifDP is not an individual, by DP's chiefexecutive officer or aduly authorized representative ofsuch officer, as those terms are defined in Section 22a-430-3(b)(2) ofthe Regulations, and by the individual(s) responsible for actually preparing such document, and DP orDP's chiefexecutive officer and each such individual shall certify in writing as follows: I "1 have personally examined and am familiar with the information submitted in this document and all attachments thereto, and 1certify, 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 ofmy knowledge and belief I understand that any false statementmade in the submitted information is punishable as acriminal offense under Section 53a-157P ofthe Connecticut General Statutes and any other applicable law." 20. Noncompliance. This Trading Agreement and Order is a final order ofthe Commissioner with respect to the matters addressed herein, and is nonappealable and immediately enforceable. Failure to complywith this Trading Agreement and Ordermay subject DP to an injunction and penalties. I"""''''l:

## ;~S 21. False statements. Any false statement in anyinformation submitted pursuant to this Trading Agreement and Orderis punishable as acriminal offense under Section 53a·157b ofthe Connecticut General Statutes and any other applicable law. 22. Notice oftransfer; liability ofDP and others. Until DP has fully complied with this Trading Agreement and Order, DP shall notify the Commissionerin writing no laterthan fifteen (15) days after transferring all or anyportion ofany ofthe facilities, the operations, the sites orthe businesses which are the subject ofthis Trading Agreement and Order or after obtaining anew mailing or location addresses. DP's obligations under this Trading Agreement and Order shall notbe affected by the passage oftitle to any property to any otherperson ormunicipality. Commissioner's powers. Nothing 

### in this Trading Agreement and Order shall affect the Commissioner's authorityto institute anyproceeding ortake any other action to prevent or abate violations oflaw, prevent or abate pollution, recover costs and natural resource damages, and to impose penalties forpast, present, orfuture violations oflaw. Ifat any time the Commissionerdetermines that the actions taken byDP pursuant to this Trading Agreement and Orderhave successfuIly corrected all violations, fully characterized the extent or degree ofanypollution, or successfully abated orprevented pollution, the Commissionermay institute anyproceeding to require DP to undertake further investigation or further action to prevent or abate violations orpollution. 24. DP's oblie:ations under law. Nothing in this Trading Agreement and Order shall relieveDevon Power LLC 

### 9 Trading Agreement and Order No. 8181 A

7- -).

26.

27.

28. DP ofother obligations under applicable federal, state and local law. No assurance bv 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 Commissionerthat the actions taken byDP pursuant to this Trading Agreement and Orderwill result ih compliance orprevent or abate pollution. ! 

# , Access to facility. Anyrepresentative ofthe Department ofEnvironmental Protection may enter any ofthese facilities without priornotice for the purposes ofmonitoring and enforcing the actions required or allowed by this Trading Agreement and Order. No effect on rights ofotherpersons. This Trading Agreement and Order neither creates nor affects anyrights ofpersons ormunicipalities that are not parties to this Trading Agreement and Order.
. No Creation ofPropertv RilZhtS. This Trading Agreement and Order does not create any property rights with respect to these DERCs. ,....,,,\ 29. Notice to Commissioner ofchanQ':es. Within fifteen (15) days ofthe date DP becomes

### ':"',.~J aware ofa change in any infonnation submitted to the Commissionerunder this Trading Agreement and Order, or that any such information was inaccurate or misleading or that any relevant information was omitted, DP shall submit the correct or omitted information to the Commissioner. 30. Notification ofnoncompliance. 

### In the event that DP 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 ofany document required hereWlder, DP 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, ifunavoidable, is minimized to the greatest extentpossible. Within five (5) days ofthe initial notice, DP 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 DP shall comply with any dates which may be approved 

### in writing by the Commissioner. Notification by DP shall not excuse noncompliance ordelay, and the Commissioner's approval ofany compliance dates proposed shall not excuse noncompliance or delay unless specifically so stated by the Commissionerin writing. 31. Submission ofdocuments. Any document required to be submitted to the Corrunissioner under this Trading Agreement and Order shall, unless otherwise specified in this Trading \, ) Agreement and Order or in writing bythe Commissioner, be directed to:

### Devon Power LLC 10 

### Trading Agreement and OrderNo. 8181 A

Mr. Michael Lafleur 

### Department ofEnvirorunental Protection Bureau of

### AirManagement 

### Complianceand Field Operations Division Emissions and CreditTrading Section 79 Elm 

### Street, 

### Hanford, CT 06106

### Devon Power LLC 11 

### Trading Agreement and OrderNo. 8181 A 

### DP consents to the issuance ofthis 

### Trading Agreement and Order without further notice. The undersigned certifies that he/she is fully authorized to enterinto this Trading Agreement and Order and to legallybind DP to the terms and conditions ofthe 

### Trading Agreement and Order. DevonPowerLLC 

# :::nrre**c~,;:::** 

# . Title :Jf(¥jIDnaJ

# ~te Date; 

## Lj- 

## 0-63

Issued as afinal order ofthe 

### Commissioner ofEnvironment

# --,,4"¥'~<LL.!.' I--",lko=..

__" 2003.

CITY OF MILFORD LAND RECORDS MAILED CERTIFIED MAIL, RETURN RECEIPT REQUESTED 

### Certified DocumentNo.