)fi( STATE OF CONNECTICUT ~~~

~m::~:RTMENTOF ENVI~ONMENTAL PROTECTION

) Trading Agreement

The State of Connecticutand) and Order No. 8112A

)

United States Naval Submarine Base )

Whereas, the Commissioner ofEnvironmental Protection ("Commissioner") and United States

Naval Submarine Base, New-London ("SUBASENLON") 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 (UDERC") trading to reduce nitrogen oxide (''NOx'')

emissions will achieve this result in a timely and cost-effective manner.

A. At the request and wilh the agreement ofSUBASENLON, the Commissioner finds the

following;

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1. This Trading Agreement and Order supercedes Trading Agreement and Order 8112

issued on April 30, 1999, and Trading Agreement and Order 8112 Addendum 1

issued on July 30, 2001.

2. SUBASENLON is a branch ofthe Up.ited States government that owns and operates a

• aval Submarine training and maintenance facility at Groton, COIUlecricut

("facility").

3. At the facility, SUBASENLON operates the following fuel-burning equipment: one

(1) diesel powered electric generator ("diesel generator 519") which is used

exclusively for training <;If personnel in the operation and maintenance ofsuch

engines on board submarines, and boilers 1,2 and 3 ("boilers 1,2 and 3") that are

subject to Section 22a-174-22, Regulations ofCoIUlecticllt State Agencies

("Regulations") pertaining to the control ofNOx emissions.

4. Emissions testing resulted in NOx emission rates for diesel generator 519, in grams

per horsepower hour ("g:mIHP-hr'') and boilers I, 2 and 3 in pounds per million

British thermal units ("lbsIMMBru")"as follows:

Table 1

SUBASENLON

Emission Test Results, Allowable Emission Limits and FLERs in gm/HP-br or IbsfMMBtu

Unit Fuel Emission Test FLER Allowable Emission Next

Rate Emission Test Date EmissionT

#2oiVNat.Gas Limits est Due

Gen. #519 ! #2 diesel oil 19.88 24.63 8 11/19/02 I 11/19107

Boiler 1 #2oillN"nl.Gas 0.145/0.086 0.143/0.J26 0.20 I 6/20/02 I 6/20/07

Boiler 2 #2oillN"at.Gas 0.158/0.096 0.144 10.099 I 0.20 6/19~20/02 I 6/19-20/07

Boiler 3 #2oiVNat.Gas 0.134/0.090 0.134/0.076 I 0.20 I2I11/0l I 12111106

(Prinled on Retytled Paper)

79 Elm Sneet • Hm!ord, CT 06106 _ S127

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U.S. Naval Submarine Base 2 Trading Agreement

and Order 8112 A

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5. SUBASENLON is in excess of the allowable limits in Section 22a-174-22(e) of the

Regulations as shown in Table 1 ofthis Trading Agreement and Order when

operating diesel generator 519.

6. Depending on the training schedule, SUBASENLON operates diesel generator 519 in

"standard operation" or as a "peaker unit". Pursuant to the Department of

Environmental Protection ("Department") policy on "Credit Trading for Sources with

Irregular NOx Emissions" policy, with a revised date ofFebruary 27, 2001, attached

hereto and incorporated by reference into this Trading Agreement and Order as

Exhibit 1, each pe-mng unit has a peak daily NOx emissions greater than three times

the average daily emissions during the ozone season and is therefore considered to be

a source with irregular NOx emissions.

7. Pursuant to Section 22a-174-220) of the Regulations SUBASENLON proposes to

comply with Section 22a-174-22{e) ofthe Regulations, for diesel generator 519's

emissions, through the use of approved DERCs until April 30, 2007 at the facility in

ac.cordance with this Trading Agreement and Order.

8. Emissions testing perfonned for boilers I, 2 and 3 resulted in NOx emissions rates as

shown in Table I.

9. SUBASENLON is in excess ofthe generation FLERs, as shown in Table I, when

operating boiler 1,2 and 3.

10. Based on findings by the Department on June 11, 2002, Notice ofViolation NOV No.

14895 was issued on June 20, 2002 to SUBASENLON for exceeding generation

FLER limits for boilers 3 specified in Trading Agreement and Order 8112. On

August 9, 2002, SUBASENLON voluntary notified the Department that boilers I and

2 also exceeded generation FLER limits specified in Trading Agreement and Order

8112. The exceedance of the three boilers resulted in the creation of 1 tons of ozone

and 3 tons of non-Olone invalid credits during the time period since the previous

emissions test.

II. In response to NOV No. 14895, SUBASENLON agreed to retire without use, 4 tons

of valid DERCs (I ton of alone season and 3 tons of non-alone season) to replace 4

tons ofthe invalid DERCs, and retired without use another 4 tons of valid DERCs (I

ton of ozone season and 3 tons of non-ozone season) for a 100% penalty premium.

12. The Commissioner, pursuant to Section 22a-174-22 of the Regulations, previously

approved the NOx DERCs referenced in Table 2 of this Trading Agreement and

Order. DERC creation serial numbers if assigned by the Deparonent to these

previously approved DERCs are provided in Table 2 ofthis Trading Agreement and

Order. Unused DERCs are subject to the vintage restrictions ofthis Trading

Agreement and Order. Dates after which the unused DERCs will no longer be

eligible for use as a result of the vintage restrictions are provided in Table 2 of this

Trading Agreement and Order in the expiration date column.
u.s. Naval Submarine Base 3

•

Trading Agreement

and Order 8112 A

Table 2

SUBASENLON - DERCs Previously Purch.:ased .:and Gener:Hed (10 the extent nor alre.:adv used)

Year Ozone Season NO:r DERC Ozone Non-ozone season NOx Non- Expir:ttion

of serial numbers Season DERC seri:tl numbers ozone Date

Gen. DERCs seaSOD

DERCs

1996 Generated SIN Not assigned 14.2 Generated SIN Not assi2Iled 17.1 12131/04

1996 Purchased SIN Not assi~ed 26 N/A N/A 12131104

1997 Purchased SlN-Not assigned 19 N/A N/A 12131104

1997 Generated SIN Not assi2tled 1.74 Generated SIN Not assilZDed 11.07 I 12131/04

1998 CT2818112(DqNOxoz(l) I CT9818112(DqNoxnoz(I-4) I 4 I 12131/04

1999 NlA N/A CT99/8112(DC Nomoz 1-4) 4 I 12131/04

2000 crOO/8112 DC)NOxoz(J) I crOO/8112(DC Nomoz 1·5) 5 12/31/05

2001 NIl\. N/A CTOl/8112mc Noxno 1·2) I 2 12/31/06

2002 I cr02l8112(DC)NOxoz(l) I I CT02I8112(DC)Noxnoz(I·2) I 2 I 12131107

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

Order, and pursuant to Sections 22a.174-22(d)(3), (e) and OJ of the Regulations hereby

allows SUBASENLON to comply with Section 22a-174-22 ofthe Regulations through

use ofDERC trading and the emissions limitations at the facility as provided herein.

J .-c.

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With the agreement ofSUBASENLON, the Commissioner, acting under Sections

22a-6, 22a-I71, 22a-174, 22a-I76, and 22a-177 ofthe COIU1ecticut General Starutes,

orders SUBASENLON as follows:

1. Upon issuance ofthis Trading Agreement and Order, SUBASENLON shall:

a) 0 longer create new DERCs using boilers I, 2 and 3 at the facility; and

b) Submit to the Commissioner a certification that it has retired without use, 8 tons

ofDERCs to offset the FLER exceedance described in NOV No. 14895.

2. Upon issuance ofthis Trading Agreement and Order at the facility, SUBASENLON

shall comply with Section 22a-I74-22 of the Regulations through emission reduction

trading until the diesel generator 519 achieves pennanent compliance with the

emission standard in Section 22a-174-22(e) of the Regulations or by April 30, 2007,

whichever is earlier, as follows:

a. SUBASENLON·shall use approved DERCs as required under this Trading

Agreement and Order;

b. SUBASENLON shall have in its possession sufficient approved DERCs to

meet the applicable NOx emission limits as allowed under this Trading

Agreement and Order; and
U.S. Naval Submarine Base 4 Trading Agreement

and Order 8112 A

c. SUBASENLON shall comply during operation of each peaking unil with the

FLERs shown in Table I ofthis Trading Agreement and Order.

3. DERCs use for Diesel Generator 519

a. Until April 30, 2007 before the first day of each month SUBASENLON

shall have in its possession sufficient approved DERCs for the upcoming

ozone seaso.n, based on the following calculations (described also in

Exhibit I); ,

Before the first day of each month SUBASENLON shall estimate DERCs

required for such month for the diesel generator 519 as follows:

(i) At all times (mass calculation):

Estimate DERCs (tons) on a mass basis = [Number of ozone months x

estimated gaVrnonth x heat input in M:MBtulgal x (FLER grarnsIHP-hr-

(Allowable limit in grams/HP-hr x 0.95(1~) x EFF. (2) x HP-hr/0.002544

MMBtu x Ibs/453.6 grams] + 2000 pounds/ton.

Where:

(l) Equivalent to a 5% design margin

(2) Manufacturer's engine efficiency = 37% for diesel generator 519.

(il) Dunne: the ozone season onlv (peak dav calculation):

, .../

The estimated maximum excess NOx emissions (in Ibs) on any ofthe days

projected by the Commissioner to be "moderate to unhealthful",

"unhealthful" or "very unhealthful" divided by 3 and then divided by 13

(with the resull in Ions):

Estimate DERCs (in tons) = [(Estimate excess NOx in lbs x maximum

estimated hoursi24 hrratio of operating hours) + 3] + [13Ibs/day/ton]

b. No later than October 30 of 2003, 2004, 2005, and 2006 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:

Actual DERCs (tons) on a mass basis = [Number of ozone months x

actual gaVmonth x heat input in MMBtulgaJ x (FLER grams/HP-hr -

(Allowable limit in gramslHP-hr x 0.95» x EFF. x HP-hr/0.002544

MMBtu x Ibs/453.6 grams] + 2000 poundsiton.
u.s. ""aval Submarine Base 5

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Trading Agreement

and Order 8112 A

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(ii) the actual excess NOx emissions (in Ibs) on any of the days

projected by the Commissioner to be "moderate to unhealthful",

"unhealthful", or "very unhealthful", divided by 3 and then divided

by 13 (with the result in tons):

DERCs (in tons) = [(Actual daily excess NOx in Ibs on a mass basis x

actual h6un/24 hr ratio of operating hours) + 3) + 13 Ibs/day/ton] ,

As described in Exhibit I ofthis Trading Agreement and Order, to the

extent that DERCs used to offset on peak day basis (method (ii)) exceed

the total mass excess emissions (method (i», remaining DERCs may be

used in the non-ozone season in the same or subsequent years L"rrough

April 30, 2007.

4. SUBASENLON shall make and keep records of: daily fuel use and fuel type;

excess NOx emissions; the number of DERCs in its possession, created,

purchased and used (by serial number if assigned) each month, as in accordance

with the appropriate emission rates and limits in this Trading Agreement and

Order; the number ofDERCs used in the ozone season and non-ozone season

(the remainder ofthe year), the daily ozone classification as forecasted by the

Commissioner on the previous day; well as documentation attesting to the fact

that approved DERCs used in the ozone season were created during the ozone

season. Generator certification of this fact shall be sufficient.

5. Record Keeping. SUBASENLON shall retilin records and supporting

documentation as described in this Trading Agreement and Order for a

minimwn offive years,'commencing on the date such records were created.

SUBASENLON shall provide the records specified above to the Commissioner

within thirty (30) days ofreceipt ofa 'V.'litten request from the Commissioner.

All records shall be maintained in accordance with Sections 22a-174-4 and 22a174-22 of the Regulations.

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

SUBASENLON may use NOx allowances, through April 30, 2007, pursuant to

Section 22a-174-22(j) of the Regulations to achieve all or a portion of the

reductions required by Section 22a-174-22 ofthe Regulations. Any allowance

used for compliance with Section 22a-174-22(e) ofthe Regulations shall be

subject to all resnictions and/or requirements applicable to DERCs contained in

this Trading Agreement and Order;

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a. In nrder for SUBASENLON to use NOx allowances, SUBASENLON

shall create a general account in EPA's NOx Allowance Tracking System

(''NATS''); and
U.S. Naval Submanne Base 6 Trading Agreement

and Order 8112 A

b. Each allowance used for compliance with Section 22a-174-22 ofthe

Regulations shall be equivalent to one discrete emission reduction credit.

Allowances shall be considered used for compliance with Section 22a174-22 ofthe Regulations when they are tr2nSferred from the facility's

Ox general account in the NATS to the CT State NOx Retirement

Account (Account ill CTOOO0000300 in the NATS).

6. DERC Doubling. At a minimum, DERCs required shall be adjusted upwards by

100% ifDERCs aI!e not in SUBASENLON's possession prior to the first day of each

month of use. However, based on the gravity of noncompliance, the Commissioner

may require additional upward adjustment.

7. Vinta2e Restriction. For the purposes of compliance with Section 22a-174-22 ofthe

Regulations, DERCs/allowances shall only remain valid for five (5) caleodar years

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

DERCs/allowances older than five (5) calendar years from their creation/allocation

are not 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.

8. FLER Exceedance. Noncompliance with an established FLER shall subject

SUBASENLON to make restitution by matching the quantity of emissions ("true up")

caused by the exceedance plus a 100% premium. The true up in tons ofDERCs shall

be equal to the FLER exceedance in IbsJM:MBtu, multiplied by the total heat input

during the period of noncompliance divided by 2000 lbs/ton. Ifthe period of

noncompliance is not lmown, the time period from the completion of the 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

any proceeding or take any other action to require additional upward adjustment,

based on the gravity of any alleged noncompliance or violation oflaw.

9. FLER Modification. FLERs set forth in Table I ofthis Trading Agreement and

Order may be modified only after the consent ofthe Commissioner by wrinen

modification oftrus Trading Agreement and Order.

10. Emissions Testing. Pursuant to Section 22a-174-22(k) ofthe Regulations,

SUBASENLON shall conduct NOx emission tests ofthe units at least once every five

years conunencing from the dates ofthe NOx emission tests for the diesel generator

519 and boiler.; 1,2 and 3 as provided in Table I ofthis Trading Agreement and

Order.

II. Annual Emission Statement. No later than March I, of every year after issuance of

this Trading Agreement and Order, SUBASENLON shaH include with the Annual

Emission Statement provided to the Commissioner, a record of each sale or other

transfer, and use of any and all of the DERCs approved within and subsequent to

issuance of this Trading Agreement and Order until all such DERCs have been used.

SUBASENLON shaH also include the amounts of all DERCs used including serial
u.s. Naval Submarine Base 7 Trading Agreement

and Order 8112 A

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number (if assigned) and/or purchased from other facilities, and/or approved for the

previous calendar year. These repoits shall be on a fonn prescribed by the

Commissioner.

12. Program Review. After April 30, 2007 for the diesel generator 519, SUBASEI\'LON

shall comply with the requirements ofSection 22a-174-22 of the Regulations.

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

and if determined to be appropriate, the Commissioner may grant written extension of

this Trading Agreement and Order. After full program review, and ifthe

Commissioner deems it appropriate, the Commissioner may allow the survival and

use ofthese DERCs, subject to the vintage restriction, beyond April 30, 2007.

13. Future Compliance Report. On or before September 1, 2006, SUBASENLON shall

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

the Regulations after April 30, 2007.

14. Full compliance. SUBASENLON 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.

15. Approvals. SUBASEN"LON shall use best efforts to submit to the Commissioner all

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

approvable form. If the Commissioner notifies SUBASENLON that any document or

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

deemed disapproved, and SUBASENLON 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 ofthe Commissioner's notice of deficiencies. In

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

Commissioner may approve the docwnent or other action as submined or performed

or with such conditions or modifications as the Commissioner deems necessary to

carry out the pwposes of this Trading Agreement and Order. Nothing in this

paragraph shall excuse noncompliance or delay.

16. 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; "Ozone season" means the

period from May 1 through September 30 in any given calendar year. The date of

"issuance" ofthis 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.

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

Agreement and Order, including but not limited to notice of approval or disapproval
u.s. Naval Submarine Base 8 Trading Agreement

and Order 81!2 A

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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 Agreeme~t 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 submined or performed by a date which falls on

a Saturday, Sunday or a Cormecticut or federal holiday shall be submitted or

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

holiday.

, 18. 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 SUBASENLON or, if SUBASENLON is not an

individual, by an individual who is an authorized representative ofSUBASENLON ,

in accordance with Section 22a-174-2a(a) ofthe Regulations of Cormecticut State

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

and each such individual shall certify in writing as follows:

"r have personally examined and am familiar with the information submined in

this docwnent and all attachments thereto, and I certify, 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 statement made

in the submined information is punishable as a criminal offense under §53a-157b

ofthe Connecticut General Statutes and any other applicable law."

19. 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 comply with this Trading Agreement and Order

may subject SUBASEN+.-ON to an injunction and penalties.

20. False statements. Any false statement in any infonnation submitted pursuant to this

Trading Agreement and Order is punishable as a criminal offense under Section 53a157b of the Connecticut General Statutes and any other applicable law.

21. Notice oftransfer, liability ofSUBASENLON. Unti! SUBASE ;LON has fully

complied with this Trading Agreement and Order, SUBASENLO. shall notify the

Commissioner in writing no later than 15 days after transferring all or any ponion of

the facility, the operations, the site or the business which is the subject ofthis Trading

Agreement and Order or after obtaining a new mailing or location address.

SUBASENLON's obligations under this Trading Agreement and Order shall not be

affected by the passage oftide to any property to any other person or municipality.

22. 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 oflaw. If at any time me Commissioner detennines that the actions taken
U.S. Naval Submarine Base 9 Trading Agreement

and Order 8112 A

23.

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by SUBASENLON 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 SUBASENLO to undertake further investigation

or further action to prevent or abate violations or pollution.

SUBASENLON's obligations under law. Nothing in this Trading Agreement and

Order shall relieve SUBASENLON of other obligations under applicable federal,

state and local law.' ,

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 SUBASENLON pursuant to

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

pollution.

Access to premises. Any representative ofthe Department of Environmental

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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26. No effect on rights ofother persons. TIlls Trading Agreement and Order neither

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

Trading Agreement and Order.

27. No CreatIon ofProoertv Rights. This Consent Order does not create any property

rights with respect to these DERCs.

28. . otice to Commissioner of chanees. Within 15 days ofthe date SUBASENLON

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 omined, SUBASENLON shall

submit the correct or omined information to the Commissioner.

29. Notification of noncompliance. In the eveDt that SUBASENLON 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 of any document required

hereunder, SUBASENLON 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 ofthe initial notice, SUBASENLON 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 wrinen approval of

the Commissioner, dates by which compliance will be achieved, and SUBASENLON

shall comply with any dates which may be approved in writing by the Commissioner.

Notification by SUBASENLON shall not excuse noncompliance or delay, and the
u.s. Naval Subrnanne Base 10 Trading Agreement

and Order 8112 A

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Commissioner's approval of any compliance dates proposed shall not excuse

noncompliance or delay unless specifically so stated by the Commissioner in writing.

30. 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 Corrunissioner, be

directed to:

Mr. Roland L. Severance, Jr., P.E.

" Emissions Trading Unit

Compliance and Field Operations Division, 5th Floor

Bureau ofAir Management

Department ofEnvironmental Protection

79 Elm Street

Hartford, Connecticut 06106
U,S. Naval Submarin'e Base 11 Trading Agreement

and Order 8112 A

SUBASENLON consents to the issuance ofthis Trading Agreement and Order without funher

notice. The undersigned cenifies that he/she is fully authorized to enter into this Trading

Agreement and Order and to legally bind SUBASENLON to the terms and conditions of the

Trading Agreement and Order.

United States Naval Submarine Base

Signature: -'7""'F£~.:>..!!""=;;'I'::---------- Name: +="T=--,=;='7'-=.JJ."~~' _

Title: --''='''''"'===='''''---><==='--- _

Date: 30 ApfC 03

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'., - . Roc'lJ'e, Jf

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on "':~---'4-_....:1 , 2003.

Issued as a final Order oftbe Commissioner ofEnvironmental Protection

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TOWN OF GROTON LAND RECORDS

MAILED CERTIFIED MAlL,

RETURN RECEIPT REQUESTED

Cenified Document No.

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