# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

State ofConnecticut and PSEG Power LLC PSEG Fossil LLC PSEG Power Connecticut LLC ) ) ) 

### ) ) ) 

### Trading Agreement and OrderNo. 8305

WHEREAS, the CommissionerofEnvironmental Protection ("Commissioner") and PSEG Power LLC, et al. ("Respondents") agree that the Commissionermay issue apermit or orderto allow emissions trading in accordance with Section 22a-174-22U) ofthe Regulations ofConnecticut State Agencies ("Regulations") as a method ofcompliance with Section 22a-174-22 ofthe Regulations: A. At the request and with the agreement ofRespondents, the Commissioner finds the following: I. This Trading Agreement and Order supersedes Trading Agreement and Orders 8240, 8241, 8243, 8253 and all subsequent modifications thereto. 2. Respondents own and operate electricity generation facilities in Connecticut ("facilities"). 3. At the facilities, Respondents operate the emission units described in Tables 1-3 below, which are subjectto Section 22a-174-22 ofthe Regulations ofConnecticut State Agencies ("Regulations") pertaining to the control ofNitrogen Oxide (NOx) emissions. 4. For the 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 each emission unit described in Tables 1-3 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 aNOx allowance designated specifically for compliance during Ozone Season control periods and allocated to a CAIRNOx Ozone Season unit located in the State of Connecticut after the date ofissuance ofthis Trading Agreement and Order.

c. CAIRNOx 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.Cl.gov/dep An Equal Opportunity EmployerPSEG Power LLC, et al. 2 Trading Agreement and OrderNo. 8305

e. Discrete Emission Reduction Credit (DERC): a unitthatwas generated and approved by the Commissioner in accordance with a Trading Agreement and Order issued by the Commissionerorgenerated and approved by the Commissioner in accordance with a protocol submitted and approved pursuant to Section 22a-174-38 ofthe Regulations. Such unit is equivalentto I ton of NOx emissions and may be used for emissions trading in accordance with Section 22a-174-220) ofthe Regulations, subject to the provisions ofPart 

### B of this Trading Agreementand Order. f. Full Load Emission Rate ("FLER"): Nitrogen Oxide ("NOx") emission rate corresponding to each emission unitdescribed in Table I ofthis Trading Agreement and Order thatthe Respondents shall not cause or allow the emissions ofNOx from that emission unitto exceed; and thatthe Respondents agree such FLER shall serve as the basis for determining Estimated DERCs Required, Estimated Allowances Required, Actual DERCs required, and Actual Allowances Required in accordance with this Trading Agreement and Order.
g. Non-Attainment Area: means the geographic areawhich has been designated as nonattainment pursuantto 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 GreaterConnecticut, CT area and the New York-Northern New Jersey-Long Island, NY-NJ-CT area. h. CAIRNATS: "CAIRNOxOzone Season Allowance Tracking System" as defined in 40 CFR 96.302.

I. Ozone Season: May I through September 30 ofeach calendaryearor such period as defined bythe U.S. Environmental Protection Agency, subsequent to the issuance ofthis Trading Agreement and Order. J. Non-Ozone Season: the period ofconsecutive calendar months between two successive Ozone Seasons k. ppmvd: parts per million, by volume, dry basis
Table I: Non CAIR NOx Ozone Season Unit NOx Emission Rates. FLERs and Allowable Limits (lbs/MMBtn, nnless otherwise noted) UNIT- Heat Stack FLER Allowable Date of Date of reg. or Fuel Input Test Rate (lb/mmbtu) Emission Last Stack NextStack permitno. (MMBtu) Limit Test Test IAELl New Haven No.6 143.4 <0.4 0.4 0.25 2/3/2010 2/3/2015 Aux. Boiler P 117-0021PSEG Power LLC, et al. 3 Trading Agreement and OrderNo. 8305

Table 2: CAIR NOx Ozone Season Unit Allowable Limits (Ibs/MMBtu, unless otherwise noted) UNIT- Fuel Heal Inpul Allowable Emission Limit reg. or permit no. (MMBlu) (AEL) Bridgeport Harbor Unit 2 No.6 1,785 0.15 non-ozone season average, regardless offuel burned R-015-0162 No.2

Table 3 Coal-Fired CAIR NOx Ozone Season UnitAllowahle Limits flbs/MMBtu, unless otherwise noted) UNIT- Fuel Heat Input Allowable Emission Limit reg. or permit no. (MMBlu) (AEL) Bridgeport Harbor Unit 3 Coal 4,100 0.38 P-015-0089 No.6 0.25 No.2 0.20 0.15 non-ozone season averai!c for all fuels) 5. The Respondents agree thatthe actual NOx emissions rate from the emission units described in Tables 1-3, at times, exceed the corresponding AELs.
6. The Respondents and the Commissioner agree that the actual 24-hour, block average NOx emission rate from the emissions unit described in Table 3, at times, may be less than the corresponding AELs. At such times, the Respondents propose to generate DERCs. 7. Pursuantto Section 22a-174-220) ofthe Regulations, Respondents propose to comply with Section 22a-174-22(e

- f) ofthe Regulations, when operating the emission units described in Tables 1-3 by means ofemissions trading in accordance with the provisions ofthis Trading Agreement and Order. 8. The Respondents propose to use a full load emission rate ("FLER") identified in Table 1 for the purposes ofcalculating Estimated DERCs/Allowances Required and Actual DERCs/AlIowances Required for those emission units described in Table 1. The Respondents propose to use the actual 24-hour average emissions rate measured by CEMS for the purposes ofcalculating Actual DERCS generated and/orActual DERCs/AlIowances Required for the emissions units described in Tables 2 & 3. The Commissioner, in accordance with Section 22a-174-22(j) ofthe Regulations hereby allows Respondents to comply with Section 22a-174-22 ofthe Regulations at the facilities through the use ofemissions trading, subjectto the provisions ofthis Trading Agreement and Order. 

### B. With the agreement ofRespondents, the Commissioner, acting under Sections 22a-6, 22a-174, 22a176, and 22a-l77 ofthe Connecticut General Statutes, hereby orders Respondents as follows:

I. The Respondents may use emissions trading, subjectto the provisions ofthis Trading Agreement and Order until the earlierof:PSEG Power LLC, et al. 4 Trading Agreementand OrderNo. 8305

a. May 31, 2014; b. The Commissioner issues written notice to the Respondents stating thatthe Respondents are no longerallowed to use emissions trading due to the Respondents' violation ofany provision ofthis Trading Agreement and Order; or

c. The Commissioner issues written notice to the Respondents notifYing the Respondents thatthe Commissioner has determined the use ofemissions trading as a compliance option has been further restricted, modified ornullified by: (i) the promulgation ofan Act, Statute, or Regulations; or (ii) the issuance ofajudgment or courtorder. 2. Control Technology Evaluation: Not more than 9 months from the date ofissuance ofthis Trading Agreement and Order, the Respondents shall submit acontrol technology evaluation to reduce emissions ofNOx from the emissions units described in Tables 1-3 to, at a bare minimum, a rate orconcentration that complies with the applicable limits ofSection 22a-174- 22 ofthe Regulations as may be amended, without using, tendering, orotherwise acquiring Allowances or DERCs. Such evaluation shall include but not be limited to the following:

a. A detailed description ofall subjectemissions units, currently installed emissions controls equipment and methods, all currently installed emissions monitoring systems; b. A detailed description ofany and all additional oralternative emissions control equipment and methods or, combinations thereof, that are capable of reducing NOx emissions from subject emissions units to, at a bare minimum, a rate orconcentration that complies with the applicable limits ofSection 22a174-22 ofthe Regulations as may be amended, without using, tendering, or otherwise acquiring Allowances or DERCs;

c. An evaluation ofcapital costs, annual operating costs, and total annualized $/ton costs associated with the installation and operation ofany and all additional oralternative emissions control equipmentand methods, or combinations thereof, that are capable ofreducing NOx emission from the subject units to, at a bare minimum, arate orconcentration that complies with the applicable limits ofSection 22a-174-22 ofthe Regulations as may be amended, without using, tendering, or otherwise acquiring Allowances or DERCs; d. An estimated schedule for the design, procurement, installation and operation ofany additional or alternative emissions control equipment and methods, or combinations thereof, that are capable ofreducingNOx emission from the subject units to, at a bare minimum, a rate orconcentration that complies with the applicable limits ofSection 22a-174-22 ofthe Regulations as may bePSEG Power LLC, et al. 5 Trading Agreement and OrderNo. 8305 amended, without using, tendering, or otherwise acquiring Allowances or DERCs;

e. A detailed description ofany adjustments and/ormodifications that must be made to the emissions monitoring systems for the subjectemission units in orderto demonstrate compliance with, at least, Section 22a-174-22 ofthe Regulations as may be amended, without using, tendering, or otherwise acquiring Allowances or DERCs; and f. Adetailed description ofany collateral environmental impacts that will result as a direct consequence ofthe Respondents' use ofadditional/altemative emissions control equipmentand methods to reduce NOx emissions to, at a bare minimum, a rate orconcentrationthat complies with the applicable limits ofSection 22a-174-22 ofthe Regulations as may be amended, without using, tendering, or otherwise acquiring Allowances or DERCs. Should this Trading Agreement and Orderexpire in accordance with Paragraphs B.I(b) or B.I(c) within the nine-month period from date ofissuance ofthis Trading Agreement and Order, then Respondents need not comply with the provisions ofParagraph 8.2. 3. While using emissions trading in accordance with this Trading Agreementand Order, the Respondents shall obtain and use sufficient DERCs and/orAllowances in such a manner as to comply with Paragraphs B.9 and 8.11 ofthis Trading Agreementand Order. All Allowances used must come from one or more emission units that are within the same ozone NonAttainment Area as the unit seeking to use the Allowance(s) for compliance with this Trading Agreement and Order. Any Allowances used to comply with this Trading Agreementand Order must be allocated for the control period that occurs during the same year those allowances are used for compliance with this Trading Agreementand Order. All DERCs used during the Ozone Season for the emission unit described in Table I shall have been generated during an Ozone Season by the operation ofan emission unitthat is not aCAIR NOx Ozone Season unit, as defined in Section 22a-174-22c ofthe Regulations. All DERCs used during the Ozone Season for the emissions unit described in Table 3, shall have been generated during an Ozone Season. 4. Prior to using Allowances to comply with this Trading Agreement and Orderthe Respondents shall obtain a General and/orCompliance Account in the CAIRNATS. 5. 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 older than five (5) calendaryears from theircreation are not valid for use for compliance with Section 22a-174-22 ofthe Regulations and the provisions ofthis Trading Agreementand Order. 6. Respondents shall not cause orallow actual NOx emissions from the operation ofthe emission unit described in Table I ofthis Trading Agreement and Orderto exceed the corresponding FLERs. Compliance with the corresponding FLERs specified in Table I shall be determined based on the results ofemissions testing performed in accordance with SectionPSEG Power LLC, et al. 6 Trading Agreement and OrderNo. 8305 22a-174-22 ofthe Regulations orbased on NOx emissions monitored and recorded by a continuous emissions monitoring system that was approved by the Commissioner and that complies with Section 22a-174-4 ofthe Regulations and either40 CFR 60, Appendices B&F or40 CFR 75. 7. Ozone Season Fuel Use Restriction: Notwithstanding the provisions ofParagraph B.3 ofthis Trading Agreement and Order, when operating the emission units described in Table I during the Ozone Season, the Respondents shall operate this unit while firing orco-firing the lowest NOx emitting fuel type orcombination offuel types that the unit is physically able to burn, in accordance with Department permit, order, registration, regulation and/or statutes in orderto perform all ofits design functions. Notwithstanding the provisions ofParagraph 8.3 ofthis Trading Agreement and Order, when operating the emission units described in Tables 2-3 during the Ozone Season, the Respondents shall operate those units while firing or co-firing the lowestNOx emitting fuel type or combination offuel types that the units are physically able to burn to achieve the units' rated electricity output, according to the Independent System Operator- New England (ISO NE), and thatthe Respondents are authorized to burn in accordance with Departmental permit, registration, or applicable regulation. 8. Notwithstanding Paragraph B. 7 ofthis Trading Agreement and Order, during the Ozone Season, the Respondents may operatethe emission units described above on fuels thatresult in higheremissions ofNOx, ifeither:

a. the availability offuel oil that complies with Paragraph B.7 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 unit is: I.) interrupted, 2.) otherwise unavailable due to inadequate supply within the supply area, or 3.) curtailed in accordance with an interruptible supply agreement between the Respondents and the gaseous fuel supplier, or

c. the unit is operating in orderto conducttesting required by any governmental agency or auditing/testing required to demonstrate the abilityto satisfY commitments made to ISO NE in the Forward Capacity and/or Locational Forward Reserve Markets. 9. DERC/Aliowance Use. On the first day ofeach calendarmonth, the Respondents shall possess a quantity ofDERCs and/or Allowances that equals or exceeds the quantity ofActual DERCs Required and/or Actual Allowances Required in that month. Compliance with Paragraph 8.9 ofthis Trading Agreement and Order shall be determined as follows:

a. Before the first dayofeach month, Respondents shall estimate DERCs and/or Allowances required for such calendar month for each emission unit as follows: Estimated DERCsIAllowances Required (Table I emission unit) =

({Estimated fuel use in MMBtu) x «FLER)

- (0.95 x AEL))} +2000 Ibs/tonPSEG Power LLC, et al. Where: 7 Trading Agreement and OrderNo. 8305

• AEL = Allowable Emission limit, as defined in Paragraph

### AA ofthis Trading Agreement and Order

• FLER = Full Load Emission Rate, as defined in Paragraph

### AA ofthis Trading Agreement and Order

• Discount (0.95) = 5% design margin applied to the AEL. Estimated DERCs/Allowances Required (Table 3 emission unit) = {(Estimated fuel use in MMBtu) x «estimated 24-hr average NOx emission rate Ib/mmbtu)

- (0.95 x AEL»} +2000 lbs/ton b. No laterthan the twentieth day ofeach month, Respondents shall calculate actual DERCs and/or Allowances used in the preceding calendar month for each emission unit described in Tables I and 3 as follows: Actual DERCs/Allowances Required (Table I emission unit) =

{(Actual fuel use in MMBtu) x «FLER)

- (0.95 x AEL»} +2000 lbs/ton Actual DERCs/Allowances Required <Table 3 emission unit) = 1:{(Daily fuel use MMBtu) x «actual 24-hr average emission rate Ib/mmbtu)

- (0.95 x AEL»} + 2000 Ibs/ton Forall days in the month where actual 24-hraverage emissions rate> AEL 10. DERC Generation. No laterthan the twentieth day ofeach month, Respondents shall calculate actual DERCs generated in the preceding calendar month for the emission unit described in Table 3 as follows:

Actual DERCs Generated {Table 3 emission unit (during ozone season only)} = 1:{(Daily fuel use MMBtu) x «AEL)

- actual 24-hraverage NOx emission rate lb/mmbtu»} + 2000 lbs/ton For all days in the month where actual 24-hraverage NOx emissions rate < AEL Where: Daily fuel use and actual 24-hr average emission rate shall exclude missing data substituted in accordance with any missing data substitution procedures, including those allowed under Section 22a-174-22c ofthe Regulations and 40 CFRPart 75. Notwithstanding Paragraph B.5, all DERCs generated bythe Table 3 emission unit in accordance with this paragraph shall expire 1 calendaryear afterthe date ofgeneration and may only be used by CAIRNOx Ozone Season units.PSEG Power LLC, et al. 8 Trading Agreement and OrderNo. 8305

II. Non-Ozone Season DERC/Allowance Use. In addition to the requirements ofParagraph 8.9 ofthis Trading Agreement and Order, on the first day ofeach Non-Ozone Season, the Respondents shall possess a quantity ofDERCs and/or Allowances that equals orexceeds the quantity ofNon- Ozone Season Actual DERCs/ Allowances Required for thatNon-Ozone Season. Compliance with Paragraph 8.1 I ofthis Trading Agreement and Order shall be determined as follows:

a. Before the first dayofeach Non-Ozone Season, Respondents shall estimate DERCs and/orAllowances required for thatNon- Ozone Season for each emission unit described in Tables 2 and 3 based an emission limit of0.15 Ib/mmbtu as follows: EstimatedNon-Ozone Season DERCs/Allowances Required (Tables 2 - 3 Units) = {(EstimatedNon-Ozone Season fuel use in MMBtu) x «estimated average NOx Emission Rate Ib/mmbtu)

- (0.95 x 0.15 Ib/mmbtu»} + 2000 Ibs/ton b. No laterthan thirty (30) days afterthe end ofeach Non-Ozone Season, the Respondents shall calculate Actual Non-Ozone Season DERCs and/or Allowances used during thatNon-Ozone Season for each emission unit as follows: Actual Non-Ozone Season DERCs/Allowances Required (Tables 2 - 3 Units) =

{(Actual Non-Ozone Season fuel use in MMBtu) x «Non-Ozone Season Average Actual NOx Emission Rate Ib/mmbtu)

- (0.95 x 0.15 Ib/mmbtu»} +2000 Ibs/ton

### L( DERCS and/orAllowances Required for all months ofthe Non-Ozone Season calculated pursuantto Paragraph 8.9) 12. Non-Ozone Season DERC Generation. No laterthan thirty (30) days afterthe end ofthe NonOzone Season, Respondents shall calculate actual DERCs generated during the Non-Ozone Season from the emission unit described in Table 3 as follows: Actual Non Ozone Season DERCs Generated by Table 3 emission unit=

{Non-Ozone Season fuel use (MMBtu) x [(0.15 Ib/mmbtu)

- Non-Ozone Season average emission rate (Ib/mmbtu)]} + 2000 Ibs/ton Where: Non-Ozone Season Average Emission Rate < 0.15 Ib/mmbtu; and Non-Ozone Season fuel use and Non-Ozone Season Average Emission rate shall exclude data substituted in accordance with any missing data substitution procedures, including those allowed under Section 22a-174-22c ofthe Regulations and 40 CFR Part 75.PSEG Power LLC, et al. 

### 9 Trading Agreement and OrderNo. 8305

13. The Respondents shall retire ten (10) percent ofall DERCs (tons) generated by the emission unit identified in Table 3, priorto use, and shall deduct them from any calculations ofDERCs available and possessed bythe Respondents to assure a benefitto the environment. 14. On orbefore January 31 ofeach calendaryear, the Respondents shall deduct a quantity of DERCS from the current balance ofDERCs possessed by the Respondents and/ortransfer a quantity ofAllowances from the Respondents' NOx General and/or Compliance Account to the CT State NOx Retirement Account (Account 10 CT0000000300 in the CAIR NATS) such thatthe total is equal to 0 orthe sum of(Actual DERCs/ Allowances Required determined pursuant to Paragraph R 9 for the preceding calendar year)

- 0.9*(Actual DERCs Generated determined pursuantto Paragraph RIO in the preceding calendar year) for all emissions units, whichever is greater. IS. Not more than thirty (30) days afterthe completion ofthe Non-Ozone Season, the Respondents shall deduct a quantity ofDERCS from the current balance ofDERCs possessed by the Respondents and/ortransfer a quantity ofAllowances from the Respondents' NOx General and/orCompliance Account to the CT StateNOx Retirement Account (Account 10 CT0000000300 in the CAIR NATS) such thatthe total is equal to 0 orthe total of(Actual Non-Ozone Season DERCs/Allowances Required for the most recently completed Non-Ozone Season)

- 0.9*(Actual Non-Ozone Season DERCs Generated in the most recently completed Non-Ozone Season) for all emissions units described in Tables 2 and 3, whichever is greater. Notwithstanding the control period limitations ofParagraph R3 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 calendar years within that Non-Ozone Season. 16. Doubling: Ifthe Actual DERCs/Allowances Required for any month, determined in accordance with Paragraph R9, exceeds the quantity ofDERCs and/or Allowances in the Respondents' possession on the first day ofthat month, then in addition to the deduction or transfer specified in Paragraphs R I4, the Respondents shall also deduct a quantity ofDERCs from the current balance ofDERCs possessed bythe Respondents and/ortransfer a quantity of Allowances from the Respondents' NOx General and/orCompliance Account to the CT State NOx Retirement Account (Account 10 CT0000000300 in the CAIR NATS) such thatthe total is equal to 0 orthe total of(Actual DERCs/Allowances Required for thatmonth)- 0.9*(Actual DERCs Generated in that month) for all emission units, whichever is greater. Such additional DERC deduction or Allowance transfer shall be performed atthe same time as any DERC deduction orAllowance transfer specified in Paragraph RI4 ofthis Trading Agreement and Order. Ifthe Actual Non-Ozone Season DERCs/Allowances Required for any Non-Ozone Season, determined in accordance with Paragraph B.II, exceeds the quantity ofDERCs and/or Allowances in the Respondents' possession on the first day ofthe Non-Ozone Season, then in addition to the deduction ortransfer specified in Paragraphs R15, the Respondents shall also deduct a quantity ofDERCs from the current balance ofDERCs possessed bythe Respondents and/ortransfer a quantity ofAllowances from the Respondents' NOx General and/or Compliance Account to the CT State NOx Retirement Account (Account 10 CT0000000300 in the CAIR NATS) suchthatthe total is equal to 0 orthe total of(ActualPSEG Power LLC, et al. 

### 10 Trading Agreement and OrderNo. 8305 Non-Ozone Season DERCslAllowances Required for the most recently completed Non-Ozone Season)

- 0.9*(Actual Non- Ozone Season DERCs Generated in the most recently completed Non-Ozone Season) for Tables 2 and 3 emissions units, whichever is greater. Such additional DERC deduction orAllowance transfer shall be performed atthe sametime as any DERC deduction or Allowance transfer specified in Paragraph B.15 ofthis Trading Agreement and Order. Notwithstanding the provisions ofParagraph 8.16 ofthis Trading Agreement and Order, any violation ofParagraphs 8.9 and B.II ofthis Trading Agreement and Order may be subjectto additional enforcement action as may be deemed appropriate by the Commissioner in accordance with the Department's enforcementresponse policy. 17. At the end ofeach calendaryear, the Respondent shall demonstrate that any Allowances used for compliance with this Trading Agreement and Order during the year satisfYthe requirements ofParagraph B.3 and are surplus, quantifiable, enforceable and permanent. This shall be determined forthe emissions units in each Non-AttainmentArea by demonstrating that the actual, aggregateNOx emissions during the most recent control period, as reported to the United States Environmental Protection Agency, from the emission unites) to which the Allowances were originally allocated were equal to or less than the aggregate amount of Allowances allocatedto such unites) bythe State ofConnecticut minus the aggregate amount ofAllowances transferred or used for compliance with this and any otherTrading Agreement and Order. The Respondents shall also demonstrate that any DERCs generated and/orused in accordance with this Trading Agreement and Order are: Real because they will result in a reduction ofactual emissions released into the air, net of any consequential increase in actual emissions resulting from shifting demand. The emission reductions will be properly measured, recorded and reported. Surplus because they are not required by any Connecticut statute or regulation mandated by a current State Implementation Plan ("SIP"), and are not currently relied upon in any applicable attainment plan, any reasonable further progress plan or milestone demonstration. Permanent because NOx controls are in place and operating, and an appropriate tracking system is in place to monitor all data required to verify and quantifYthe creation ofDERCs. Enforceable because the DERCs were generated in accordance with the provisions ofthis or a priorTrading Agreement and Order issued bythe Commissioner 18. Maintenance and Tune-up. Not more than 2 years from the date ofissuance ofthis Trading Agreement and Order, the Respondents shall perform maintenance and inspection ofeach emission unit listed inTables 1-4. Such maintenance and inspection shall include, but notbe limited to, the following:

a. Inspectthe combustion system, and clean or replace anycomponents ofthe combustion system as necessary, in accordance with manufacturer's specification orcurrent good engineering practice;PSEG Power LLC, et al. I I Trading Agreement and OrderNo. 8305

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;

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 priorto and after any adjustments are made during maintenance, tune-up, or inspection activity; and d. Make and keep records including, but not limitedto, the following: i. Demonstration that any maintenance, tune-up, and/or inspection activity performed on the emission units described in Tables 1-3 in accordance with Paragraph B. 18 ofthis Trading Agreement and Order has been performed in accordance with the manufacturer's specifications orcurrent good engineering practice,

II. The date and a description ofany maintenance, tune-up, and/or inspection activity performed on the emission units described in Tables I - 3 in accordance with Paragraph B.l8 ofthis Trading Agreement and Order, iii. The name, title and affiliation ofthe person conducting any maintenance, tune-up, and/or inspection activity performed on the emission units described in Tables 1-3 in accordance with Paragraph B.18 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 or current good engineering practice prior to and after any adjustments are made during maintenance, tune-up, or inspection activity performed in accordance with Paragraph B.18 ofthis Trading Agreement and Order. 19. Record Keeping;

a. By the close ofeach calendar day, the Respondents shall record the actual 24-hour average NOx emission rate for any emission unit equipped with an approved CEMS, the actual fuel type and the actual quantity ofeach type of. fuel in units ofvolume per day or MMbtu per day for each fuel used on the preceding day in an emission unit described in this Trading Agreement and Order. Foremission units described in this Trading Agreement & Order that are equipped with an approved NOx CEMs, the actual NOx emission rate shall be recorded within the Data Acquisition and Handling System (DAHS) in accordance with 40 CFR Part 75. The Respondent shall record the actual fuel type and the actual quantity ofeach type offuel, in units of volume perday or MMBtu, for each fuel used on an operating day,PSEG Power LLC, et al. 

### 12 Trading Agreement and OrderNo. 8305 b. On or before the first day ofeach calendar month, the Respondents shall record the numberofDERCs and corresponding serial numbers and vintages for all DERCs in its possession on the first calendar day ofthat calendar month,

c. On or before the first day ofeach calendar month, the Respondents shall record the number ofAllowances and corresponding identification numbers and allocation control periods for all Allowances in its possession on the first calendarday ofthat calendar month, d. On or before the first day ofeach calendar month, the Respondents shall record the number ofDERCs and corresponding serial numbers, vintages, purchase/sales dates, and seller/buyer for all DERCs purchased or sold during the preceding calendar month,

e. On or before the first day ofeach calendar month, the Respondents shall record the number ofAllowances and corresponding identification numbers, purchase/sales dates, allocation years, and seller/buyer for all Allowances purchased or sold during the preceding calendar month, 

### f. On orbefore the first day ofeach calendar month, the Respondents shall record the Estimated DERCs/ Allowances Required for thatcalendarmonth determined in accordance with Paragraph 8.9 ofthis Trading Agreement and Order, g. On orbefore the twentieth calendarday ofeach calendar month, the Respondents shall record the Actual DERCs/Allowances Required for the preceding calendarmonth determined in accordance with Paragraph B.9 of this Trading Agreement and Order, h. On or before the twentieth calendarday ofeach calendarmonth, the Respondents shall record the Actual DERCs/ Allowances Generated for the preceding calendarmonth determined in accordance with Paragraph B.l0 of this Trading Agreement and Order and DERCs retired for environmental benefit in accordance with Paragraph 8.13 ofthis Trading Agreement and Order,

I. On or before January 31 ofeach calendaryear, the Respondents shall record the quantity ofDERCs deducted in accordance with Paragraphs 8.14 and B.16 ofthis Trading Agreement and Order for the preceding month. Such records shall include the serial number and vintage ofeach DERC deducted from the Respondents' current balance pursuantto Paragraphs B.14 and 8.16 ofthis Trading Agreement and Order, 

### j. On or before January 31 ofeach calendar year, the Respondents shall record the quantity ofAllowances transferred in accordance with Paragraphs 8.14 and B.l6 ofthis Trading Agreement and Order. Such records shall include the identification number and allocation control period ofeach Allowance transferred pursuantto Paragraphs B.14 and 8.16 ofthis Trading Agreement and Order,PSEG Power LLC, et al. 13 Trading Agreement and OrderNo. 8305 k. Not more than thirty (30) days afterthe completion ofeach Non-Ozone Season, the Respondents shall record the Non-Ozone Season Average NOx emission rate for all emissions units described in Tables 2-4, the quantity of DERCs and/or allowances possessed on the first day ofthe Non-Ozone Season, the quantity ofDERCs deducted and/or Allowances transferred in accordance with Paragraph B.15 ofthis Trading Agreement and Order, the quantity ofDERCs generatedduring the Non-Ozone Season in accordance with Paragraph 8.12 ofthis Trading Agreement and Order, and the quantity ofNon-Ozone Season DERCs generated during the Non-Ozone Season and retired for environmental benefit in accordance with Paragraph B.15 ofthis Trading Agreement and Order, I. Foreach month ofthe Ozone season, the Respondents shall maintain records attesting to the fact that any DERCs deducted from its balance in accordance with Paragraphs 8.14 and B.16 ofthis Trading Agreementand Order satisfY the requirements ofParagraph 8.5. Generatorcertification of this fact shall be sufficient, and

m. On each day during the ozone season that the Respondents operate in accordance with Paragraph B.8 ofthis Trading Agreement and Order, the Respondents shall make and keep Records ofall emission unit operation in accordance with Paragraph B.8 ofthis Trading Agreement and Order, including copies ofany written correspondence from the Respondents' fuel supplierdetailing the duration and circumstances ofthe inadequate fuel oil supply or interruption ofgaseous fuel supply to the emission units. 20. Respondents shall retain records and supporting documentation required bythis Trading Agreement and Order for a minimum offive years, commencing onthe date such records were created. Respondents shall provide the records specified above to the Commissionerwithin thirty (30) days ofreceiptofa written request from the Commissioner. All records shall be maintained in accordance with Sections 22a-174-4 and 22a-174-22 ofthe Regulations. 21. Reporting: No later than March I ofevery year after issuance ofthis Trading Agreement and Order, the Respondents shall submit to the Commissionera written reportcontaining copies of all ofthe records required pursuantto Paragraphs B.19.a.

- B.19.j, 8.19.1 and 8.19.m ofthis Trading Agreement and Order. Not laterthan July 30 ofeach calendar year, the Respondents shall submit a written report containing copies ofall records required pursuant to Paragraph 8.19.kofthis Trading Agreementand Order. The Commissioner may prescribethe forms to be used for the submission ofthese reports. The Respondents shall submitthese reports on such forms, ifprescribed by the Commissioner. 22. FLER Violation. Violation ofan established FLER shall subject Respondents to make restitution by matching the quantity ofemissions ("true up") caused bythe exceedance plus a 100% premium. The true up in tons ofDERCs or Allowances shall be equal to the FLER exceedance in Ibs/MMBtu, multiplied by the total heat input during the period of noncompliance divided by 2000 Ibs/ton. Ifthe period ofnoncompliance is notknown, the time period from the completion ofthe last/previous Departmentwitnessed emission testthrough the date that FLER compliance is achieved as approved by the Commissioner shall be used. Notwithstanding this requirement, exceedance ofany FLERcontained inTable I is a violation in Paragraph B.6 ofthis Trading Agreement and Order subjectto enforcementaction in accordance with the Department ofEnvironmental Protection's Enforcement Response Policy, in effect atthe time ofsuch violation.PSEG Power LLC, et al. 14 Trading Agreement and OrderNo. 8305

23. FLERModification. FLERs set forth in Table I ofthis Trading Agreement and Order may be modified only afterthe consentofthe Commissioner by written modification ofthis Trading Agreement and Order. 24. Emissions Testing. The Respondents shall perform emissions testing in accordance with Section 22a-174-22(k) ofthe Regulations for each emission unit described in Table I ofthis Trading Agreement and Orderthat is not equipped with acontinuous emissions monitoring system that was approved by the Commissionerand that complies with Section 22a-174-4 of the Regulations and either40 CFR 60, Appendix B&F or40 CFR 75. 25. Full compliance. Respondents shall not 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. 26. Approvals. Respondents shall use best efforts to submitto the Commissioner all documents required by this Trading Agreementand Order in acomplete and approvable form. Ifthe Commissioner notifies Respondents that any documentorotheraction is deficient, and does not approve it with conditions ormodifications, it is deemed disapproved, and Respondents shall correct the deficiencies and resubmit it within the time specified by the Commissioner or, ifno time is specified bythe Commissioner, within 30 days ofthe Commissioner's notice of deficiencies. In approving anydocument or other action underthis Trading Agreement and Order, the Commissioner may approve the document orother action as submitted or performed or with such conditions or modifications as the Commissionerdeems necessaryto carry outthe purposes ofthis Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance ordelay. 27. Definitions. As used in this Trading Agreement and Order "Commissioner" means the Commissionerora representative ofthe Commissioner; The date of"issuance" ofthis Trading Agreementand Order is the date the Trading Agreement and Order is deposited in the U.S. mail or personally delivered, whichever is earlier. 28. Dates. The date ofsubmissionto 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 Commissioner underTrading Agreement and Order, including but not limited to notice ofapproval or disapproval ofany document or otheraction, shall be the date such notice is deposited inthe U.S. mail or is personally delivered, whichever is earlier. Except as otherwise specified in this Trading Agreementand Order, the word "day" as used in this Trading Agreement and Order means calendarday. Any document oraction which is required by this Trading Agreement and Orderto be submitted or performed by a date which falls on a Saturday, Sunday or a Connecticutor federal holiday shall be submitted or performed by the nextday which is not a Saturday, Sunday orConnecticut or federal holiday. 29. Certification ofdocuments. Any document, including but not limited to any notice, which is required to be submitted to the Commissioner underthis Trading Agreement and Order shall be signed by an individual, employed by the Respondents, who satisfies the criteria set forth in Section 22a-174-2a(a)(l) ofthe 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:PSEG Power LLC, et at. 15 Trading Agreement and OrderNo. 8305

"I have personally examined and am familiar with the information submitted in this document and all attachments thereto, and IcertifY, 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. Iunderstand that any false statement made in the submitted information may be punishable as a criminal offense under Section 53a-157b ofthe ConnecticutGeneral Statutes and any otherapplicable law."
30. Noncompliance. This Trading Agreement and Order is a final orderofthe Commissioner with respect to the matters addressed herein, and is nonappealable and immediately enforceable. Failure to comply with this Trading Agreement and Order may subject Respondents to an injunction and penalties. 31. False statements. Any false statement in any information submitted pursuant to this Trading Agreement and Order may be punishable as a criminal offense under Section 53a-157b ofthe Connecticut General Statutes and any otherapplicable law. 32. Notice oftransfer; liability ofRespondents. Until Respondents have fully complied with this Trading Agreement and Order, Respondents 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 ofthis Trading Agreement and Orderorafterobtaining a new mailing or location address. Respondents' obligations underthis Trading Agreement and Order shall not be affected by the passage oftitle to any propertyto any otherperson or municipality. 33. Commissioner's powers. Nothing in this Trading Agreement and Order shall affect the Commissioner's authority to institute any proceeding ortake any otheraction to prevent or abate violations oflaw, preventorabate pollution, recover costs and natural resource damages, and to impose penalties for past, present, or future violations oflaw. Ifat any time the Commissioner determines thatthe actions taken by Respondents pursuant to this Trading Agreement and Order have not successfully corrected all violations, fully characterizedthe extent or degree ofany pollution, or successfully abated or prevented pollution, the Commissioner may institute any proceeding to require Respondents to undertake further investigation or further action to prevent or abate violations orpollution. 34. Respondents' obligations under law. Nothing in this Trading Agreement and Order shall relieve Respondents ofotherobligations under applicable federal, state and local law. 35. No assurance by Commissioner. No provision ofthis Trading Agreement and Orderand no action or inaction by the Commissioner shall be construed to constitute an assurance by the Commissionerthat the actions taken by Respondents pursuant to this Trading Agreement and Orderwill result in compliance orpreventorabate pollution. 36. Access to premises. Any representative ofthe Department ofEnvironmental Protection may enterthe withoutpriornotice for the purposes ofmonitoring and enforcing the actions required or allowed by this Trading Agreement and Order.PSEG Power LLC, et al. 16 Trading Agreement and Order No. 830S

37. No effect on rights ofother persons. This Trading Agreement and Order neithercreates nor affects any rights ofpersons or municipalities that are not parties to this Trading Agreement and Order. 38. No Creation ofPropertv Rights. This Consent Orderdoes not create any propertyrights with respect to these DERCs orAllowances. 39. Notice to Commissionerofchanges. Within IS days ofthe date Respondents become aware of a change in any information submitted to the Commissioner underthis Trading Agreement and Order, orthat any such information was inaccurate ormisleading or that any relevant information was omitted, Respondents shall submit the correctoromitted information to the Commissioner. 40. Notification ofnoncompliance. In the event that Respondents become aware that it did not or may notcomply, ordid not ormay notcomply on time, with any requirement ofthis Trading Agreement and Order orofany document required hereunder, Respondents shall immediately notifY by telephone the section identified in the nextparagraph and shall take all reasonable steps to ensure that any noncompliance or delay is avoided or, ifunavoidable, is minimized to the greatestextent possible. Within five (S) days ofthe initial notice, Respondents 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 by which compliance will be achieved, and Respondents shall comply with any dates which may be approved in writing bythe Commissioner. Notification by Respondents shall notexcuse noncompliance ordelay, and the Commissioner's approval ofany compliance dates proposed shall not excuse noncompliance ordelay unless specifically so stated by the Commissioner in writing. 41. 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 Orderor in writing bythe Commissioner, be directed to:
Supervisor Administrative Enforcement Group Engineering and Enforcement Division Bureau ofAir Management Department ofEnvironmental Protection 79 Elm Street, Sth Floor Hartford, Connecticut 06106 (860) 424-3702PSEG Power LLC, et al. 

### 17 Trading Agreementand OrderNo. 

### 8305

Type Title:

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Issued as a final consentorderofthe Commissionerofthe DepartmentofEnvironmental Protection. Respondents consentto 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 Order and to legallybind Respondents to the terms and conditions ofthe Trading Agreement and Order.



# 4/**~/(D** Date 

### I 

# I Respondents

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# ===-=-=-:-::-_ MAILED CERTIFIED MAIL, RETURN RECEIPT REQUESTED Certified Document 

# &n 0 

# £yY\**~-><~....>'-9**_____ Arney MarrellO Commissioner



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