STATE OF CO. ECTICUT

DEPARTMENT OF ENVIRO MENTAL PROTECTION 5l~r . SF\h,'~\!'

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The Sw.te of Connecticut and

Devon Power LLC

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Tracing Agreement

and Order No. 8251

Whereas, the Commissioner of Environmental Protection ("Commissioner") and Devon

Power LLC ("DP") agree that it is in the public interest that they work cooperatively to

improve the air qU:l!ity within the State of Connecticut and that the use of discrete 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 of DP, the Commissioner finds the following:

1. DP is an exempt wholesale electric generating company with its principal place

of business in Sewickley, Pennsylvania. On December 15, 1999 DP purchased

from The Connecticut Light and Power Company and now owns one fossil

fuel·fired electric generating station, Devon Station, at Naugatuck Avenue,

Milford, Connecticut ("facility").

2. At the facility, DP owns fuel burning equipment, consisting of Devon Station

Units II, 12. 13 and 14,40 megawau GE Turbines, LM6000PA, Connecticut

Pennit Numbers 105-0040, 105-0041, 105-0042, and 105-0043, respectively

("turbines"). The turbines opernte on jet fuel or natural gas and are subject to

Section 22a·174-22 of the Regulations of Connecticut State Agencies

("Regulations") pertaining to the control of NOx emissions. Continuous

emissions monitors ("CEMs") certified to 40 Code of Federal Regulations

("CFR.") Part 75, measure NOx emissions from the turbines.

3. When operating the turbines. DP sometimes exceeds the NOx allowable

emission rate limit specified in Section 22a-174-22(e)(3) of the Regulations.

4. Pursuant to Section 22a-174.22(j) of the Regulations, during the non-ozone

season, DP intends to acquire approved DERCs until May 1, 2005 for the

turbines at the facility.

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Devon Power LLC Trading Agreement and

Order No. 8251

B. The Commissioner, in accordance with the provisions of this Trading Agreement and

Order, pursuant to Section 22a-174-22(d)(3) of the Regulations, hereby allows DP to

comply with Section 22a-174-22(d)(2) of the Regulations through use of DERC trading.

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C. With the agreement of OF, the Commissioner, acting under Sections 22a-6, 22a-171,

22a-174, 22a-176, and 22a-177 of the Connecticut General Statutes, hereby orders DP

as follows:

1. Upon issuance of this Trading Agreement and Order, DP shall comply with Section

22a-174-22 of the Regulations through emission reduction trading. Until DP achieves

pennanent compliance with the emission standard in Section 22a-174-22(e) of the

Regulations or by May 1, 2005, whichever occurs earlier:

a. DP shall use approved DERCs as required under this Trading Agreement and

Order; and

b. DP shall have in its possession sufficient approved DERCs to meet applicable

NOx emission limits as allowed under this Trading Agreement and Order.

2. DERC use. Starting on October 1, 2003, and until May 1, 2005, before the first day

of each non-Olone season, DP shall have in its possession sufficient approved

DERCs for the turbines based on the following:

a. Durin£!: the non-alone season:

DP shall meet a non-alone seasonal average emission limit of 0.15

IbslMMBtu. Prior to October 1,2003 and October 1, 2004, DP shall

estimate and acquire the amount of DERCs or allowances required for

such non-alone season needed to comply with Section 22a-174-22(e)(3)

of the Regulations as follows:

Estimated DERCs (tons) = [Estimated fuel use in :tvnv1Btu from October 1

through April 30 x (estimated seasonal average NOx

emission rate in Ibs/!v11v1Btu during October 1 through

April 30 - (0.95 x 0.15 IbsIMMBtu))] .,. 2000 poundslton.

No later than May 31,2004, and May 1, 2005, DP shall calculate and

perm::mently retire DERCs used in the preceding non-alone season as follows:

Actual DERCs (tons);;; [Actual fuel use in J'v11'.1Btu from October 1 through

April 30 x (actual seasonal average NOx emission rate in

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Devon Power LLC Tr:J.ding Agreement and

Order No. 8251

Ibs!MMB,u during Oc,ober 1 through April 30 - (0.95 x

0.15Ibs!MMB,u))] 2000 pounds/ton.

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b, When the non'-ozone season CEM-recorded NOx emission rate is used to

calculate DERCs used by the turbines, DP shall include missing data

calculated in ac~ordance with missing data substitution procedures under 40

CFR Part 75.'

C. DP shall not exceed any NOx pennit limitations for the turbines.

3. DP shall make and keep records for the turbines of: non-ozone season fuel use; nonozone season NOx emission rates, number of operating hours per non-ozone season,

the number of invalid data hours of the total operating hours per non-ozone season;

the number of DERCs in its possession, purchased and used (by serial number if

assigned) each non-ozone season in accordance with the appropriate emission rates

and limits in this Trading Agreement and Order, DP shall maintain and submit such

records in accordance with Section 22a-174~22 of the Regulations.

4. Record Keeping, DP shall retain records and supponing documentation as described

in this Trading Agreement and Order for a minimum of five years, commencing on

the clate such records were created. DP shall provide the records specified above to

the Commissioner within thirty (30) days of receipt of a written request from the

Commissioner.

5. Reporting. No later than July 30 of every year after issuance of this Trading

Agreement and Order, DP shall submit in writing to rhe Commissioner the nonozone season fuel consumption and amount of all DERCs used (including serial

numbers (if assigned) and approved DERCs purchased from other facilities) for the

turbines during the previous October through April time period. These reports shall

be on a form prescribed by ihe Commissioner.

6. Allowance Use. Pursuant to Section 22a-174-22(d)(3) of the Regulations, DP may

use NOx allowances, pursuant to Section 22a-174-220) of the Regulations to achieve

all or a portion of the reductions required by Section 22a-174-22 of the Regulations.

Any allowance used for compliance with Section 22a-174-22(e) of the Regulations

shall be subject to all restrictions and/or requirements applicable to DERCs

contained in this Trading Agreement and Order. Each allowance used for

compliance with Section 22a-174-22 of the Regulations shall be equi valent to one

discrete emission reduction credit and shall be deducted from DP's NOx Budget

Program compliance account upon such use. Allowances shall be considered used

for compliance with Section 22a·174-22 of the Regulations when they are transferred

from the facility's compliance acCOunt or overdraft account to a State of Conneclicut

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Devon Power LLC Trading Agreement and

Order No. 8251

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NOx allowance retirement account, account ID CT0000000300 in the NOx

Allowance Tracking System.

7. DERC Doubling. 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 of each

month or applicable!season. However, based on the gravity of the noncompliance,

the Commissionefmay require additional upward adjustment.

8. Vinta2:e Restriction. For the purposes of compliance with Section 22a-174-22 of the

Regulations, DERCsJallowances shall only remain valid for five (5) calendar years

from the year of the generation/allocation of such DERCs/al1owances.

DERCs/alJowances generated/allocated more than five (5) calendar years ago are not

valid for use for compliance with Section 22a-174-22 of the Regulations.

Notwithstanding the above the DERCs/allowances generated/allocated prior to

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

9. Extension. No later than May 1, 2005, with respect to the turbines, DP shall comply

with the requirements of Subdivision 22a-174-22(d)(2) of the Regulations.

However, after full program review of this and other Trading Agreements and

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

extension of this Trading Agreement and Order.

10. Future Compliance Report. On or before September 1, 2004, DP shall submit a

report indicating how the facility shall comply with Section 22a-174-22 of the

Regulations with respect to the turbines on and after May 1, 2005.

11. Full compliance. DP shall not be considered in full compliance with this Trading

Agreement and Order until all actions required by this Trading Agreement nnd

Order have been completed as approved and to the Commissioner's satisfaction.

12. Approvals. DP shall use best effons to submit to the Commissioner all documents

required by this Trading Agreement and Order in a complete and approvable form.

If the Commissioner notifies DP that any document or other action is deficient, and

does not approve it with conditions or modifications, it is deemed disapproved, and

DP 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

Commissioner's notice of deficiencies. In approving any document or other action

under this Trading Agreement and Order, the Commissioner may approve the

document or other action as submitted or performed or with such conditions or

modifications as the Commissioner deems necessary to carry out the purposes of

this Trading Agreement and Order. Nothing in this paragraph shn.lJ excuse

noncompliance or delay.

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Devon Power LLC Trading Agreement and

Order No. 8251

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13. Definitions. As used in this Trading Agreement and Order, "Approved DERCs" are

those for which t~e Commissioner has provided written authorizDtion for use in

compliance with Section 22a-174-22 of the Regulations; "Commissioner" means the

Commissioner or a representative of the Commissioner; "Non-ozone season" means

the period from October 1 through April 30 in any given calendar year. 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 of submission to the Commissioner of any document required by

this Trading Agreement and Order shall be the date such document is received by

the Commissioner. The date of any notice by the Commissioner under Trading

Agreement and Order, including but not limited to notice of approval or disDpproval

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 word "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

submitted or perfonned by the next day which is not a Saturday, Sunday or

Connecticut or federal holiday.

15. Cenification 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 DP or, if DP is not an individual, by an

indi vidual who is an authorized representative of DP, in accordance with Section

22a·174-2a(o.) of the Regulations of Connecticut State Agencies, and by the

individual(s) responsible for actually preparing such document, and each such

individual shall cenify in writing as follows:

"I have personally examined and am familiar with the information submilted in

this document and all attachments thereto, and I certify, based on reasonable

investigation, including my inquiry of those individuals responsible for

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

complete to the best of my knowledge and belief. I understand that any false

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

under Section 53a-157b of the Connecticut General Statutes and any other

·applicable law."

16. Noncomolinnce. This Trading Agreement and Order is a final order of the

Commissioner with respect to the mntters addressed herein, nnd is nonnppe::llnble

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Devon Power LLC Trading Agreement and

Order No. 8251

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

Order may subject DP to an injunction and penJlties.

17. False statements. Any false statement in any infonnation submitted pursu:mt to this

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

53a-157b of the .cofmecticut General Statutes and any other applicable law.

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18. Notice of transfer: liability of DP. Until DP has fully complied with this Trading

Agreement and Order, DP shall notify the Commissioner in writing no later than 15

days after transferring all or any portion of the facility, the operations, the site or the

business which is the subject of this Trading Agreement and Order or after

obtaining a new mailing or location address. DP's obligations under this Trading

Agreement and Order shall not be affected by the passage of title 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 of law, prevent or abate pollution, recover costs and

natural resource damages, and to impose penalties for past, present, or future

violations of law. If at any time the Commissioner detennines that the actions taken

by DP pursuant to this Trading Agreement and Order have not 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 DP to undertake further investigation or further action to

prevent or abate violatio~s or pollution.

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

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

21. No assurance bv 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 DP pursuant

to this Trading Agreement and Order will result in compliance or prevent or abate

pollution.

22. Access to facility. Any representative of the Department of Environmental

Protection may enter the facility without prior notice for the purposes of monitoring

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

23. No effect on TI2hts of other Dersons. This Trading Agreement and Order neither

creates nor affects any rights of persons or municipalities that are not parties to this

TrJding Agreement an~ Order.

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Devon Power lie Trading Agreement and

Order No. 8251

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24. No Creation of Propertv Rig:hIS. This Tr<lding Agreement nnd Order does nO[ cre<lte

nny property rights with respect to these DERCs.

25. Norice to Commissioner of chang:es. Within 15 dnys of the date DP becomes aware

of a change in an~ ihfonnation submitted to the Commissioner under this Trading

Agreement and Order, or that any such infonnation was inaccurate or misleading or

th<lt any relevant infomation was omitted, DP shall submit the correct or omitted

infonnation to the Commissioner..

26. Notification of noncomoliance. 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 of

this Trading Agreement and Order or of any document required hereunder, 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, if unavoidable, is minimized to the greatest extent possible. Within five (5) days

of the initial notice, DP shall submit in writing the date, time, and duration of the

noncompliance and the reasons for the noncompliance or delay and propose, for the

review and written approval of the 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 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:

Ms. Wendy Jacobs

Depanment of Environmental Protection

Bureau of Air Management

Emissions and Credit Trading Section

79 Elm Street

Hartford, Connecticut 06106-5127

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Devon Power LLC Trading Agreement and

Order No. 8251

DP consents to the issuance of this Trading Agreement and Order without funher notice. The

undersigned cenifies that he/she is fully authorized to enter inlO this Trading Agreement and Order

and to legally bind DP to th~ tenns and conditions of the Tr::J.d.ing Agreement and Order.

Devon Power LLC

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Issued as a final order of the Commissioner of Environment

,2003

TOWN OF MILFORD LAND RECORDS

MAILED CERTlFlED MAlL,

RETURN RECEIPT REQUESTED

Cenified Document No.

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