SIP DESCRJPTION

- Northeast Generation Companv-Tradine: Agreement and Order No. 8175A Modification 1 I. SIP- DESCRIPTION OF DERC CREATION ANDIOR USE SIP SUMMARY TABLE Tradine Aereement and Order No. 817SA Modification 1 Northeast Generation Company (mail) PO Box 270 Hartford CT06414 (site) 72 Roosevelt Drive Preston CT06365 Identifier 1 Client 138 Town #J2Q Premise #

### 1 

# ISequence #

### ll. Contact Ms. Corine Hellerman Tel: (860) 810-1824 Fax (860) 810-1860 Sr. Environmental Engineer Pollutant and Regulatory Standard: NOx 

# I Section 22a·174-22 ofthe Regulations of Connecticut State Ap;encies. Nonattainment Area Classification Serious Annual DERCs needed Estimated 5 ozone and I non-ozone. ComplianceTime Period Until April 30, 2007. Max. Emission Rate: full load emissionrate (FLER) Use. (See Table I below):
Table 1 NOxEmission Rates and Allowable Limits Unit Fuel Maximum Stack rest FLER Allowable Dateof Next PIR number Capacity (ppmvd) IbsIMMBtu Rate Stack Stack MMBtulhr IbsIMMBtu Test Test Due Tunnel Road-IO #2 oil 256 138.7 0.72 0.29 5/24/01 5/24/06 Preston

R-I 

# n. SPECIAL REQUIREMENTS

a. This Trading Agreement and OrderModification supersedes Trading Agreement and Order No. 8175A issued on April 24, 2003. b. Calculations ofcredits used shall be as specified in Trading Agreement and OrderNo. 8175A.
c. Northeast Generation Company shall acquire and pennanentlyretire seven ozone season DERCs for every actual ton ofexcess NOx emitted from the peakingunit during the previous ozone season based upon the actual emissions for each day that Connecticut one hourozone levels were forecasted to be "moderate to unhealthful", "unhealthful", or "veryunhealthful",

# :~~**~~** STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

STATE OF CONNECTICUT AND NORTHEAST GENERATION COMPANY TRADING AGREEMENT AND ORDER NO. 8175A MODIFICATION NO.1
TRADING AGREEMENT AND ORDER MODIFICATION 

### In the matter ofaTrading Agreement and Order between the CommissionerofEnvironmental Protection ("Commissioner") and Northeast Generation Company ("NGC"). WHEREAS, the 

### Commissionerand NGc. having agreed to 

### the terms and conditions set fonh in Trading Agreement and OrderNo. 8175A signed by the Commissioner on April 28, 2003, do 

### now, by mutual agreement, modify saidTrading Agreement and Order as follows: 1. Delete paragraph A.5. and substitute the following therefor: Reserved. t 

# , 2. Delete the ciate May I, 2005, and substitute thereforMay 1, 2007, in paragraphs A.6. and C.l. 3. Delete paragraph C.2.a. and substitute the following therefor: Until May 1,2007, before the first ciay ofeach month NGC shall have in its 

### possession sufficientapprovedDERCs for the currentday for the peaking unit based on the following calculations; Before the first day ofeach month, NGC shall estimate DERCs required for such 

### month for the peaking unit as follows: (i) At all times: EstimatedDERCs (in tons) use 

### = [«(FLER in IbslMMBtu)

- (0.95 x NOx allowable rate in IbslMMBtu)) x (estimated fuel use in MMBtu)] .,. 2000 pounds/ton

(PriOlcd 011 Recycled Paper) 79 Elm Streel • Hanford, CT 06106 - 5127 bttp:/ldep.Slale.CI.us All Equa.l Opportullity Employer

### Northeast Generation Company 2 

### Trading Agreement and Order No. 8175A Modification No. I

4. 

### No later than the twentieth day ofeach month, NGC shall calculate and permanently retire DERCs used in the preceding calendarmonth, as follows: Actual DERCs (in tons) ; [«(FLER in IbsIMMBtu)

- (0.95 x NOx allowable rate in IbsIMMBtu)) x (actual fuel use in MMBtu)] .;- 2000 

### pounds/ton Where:
• NOx allowable rate::;; allowable limit rate in lbsl'rvllvlBtu shown in Table 1of this Trading Agreement and Order.
• FLER = full load 

### emission rate in lbsl1vTh1Btu as shown in Table 1 

### ofthis

.Trading Agreement and Order. o Discount (0.95) ; 5% design margin applied to the allowable limitrate. ti) During the ozone 

### season onlY: 

### No later than December31 it

### each year, NGC shall acquire and permanentlyretire seven ozone season DERCs for every acrual ton ofexcess NOx emitted from the peaking unit during the previous ozone season based upon the acrual emissions for each day that Connecticut one hourozone levels were forecasted to be 

### "moderate to unhealthful", "unhealthful", or "very unhealthful", until such time that the EPA 

### revokes the I-hourstandard. Upon such revocation, NGC shall calculate and pemlanently retire seven ozone season DERCs for every acrual ton ofexcess NOx emitted from the peaking unit during such ozone season based upon the actual emissions for each day that Connecticuteight hour ozone levels were forecasted to be "unhealthyforsensitive groups", "unhealthy", or "very unhealthy". Where: Actual ton ofexcess NOx emitted; [«(FLER in IbsIMMBtu)

- (0.95 x NOx allowable rate in lbsIMMBtu)) x (actual fuel use in MMBtu)] .;- 2000 pounds/ton 

### The total actual tons ofexcess NOx emitted from the peaking unitduring forecasted ozone exceedance days shall be 

### multipliedby seven and thenrounded to the nextgreater whole ton, to determine the numberofDERCs to be 

### permanently retired. This requirementis in addition to the NOC's requirementto estimate excess emissions and subsequentpermanentretirementofasufficient numberofapproved DERCs in accordance with paragraph C.2.a.(i) ofthis 

### Trading Agreementand Order. Delete paragraph C.2.b. and substitute the following therefor: 

### '._-**(~~.** 

### Northeast Generation Company
Reserved. 3 

### Trading Agreement and Order No. 8175A Modification No.1



### ( 6. 5. Delete paragraph C.2.c. and substiruce the following therefor: During the non-ozone season: Until May 1, 2007, from October 1 through April 

### 30, inclusive, each year, the peaking unit shall, in addition to meeting the 24-houremission limit in Table 22-1 ofSection 22a-174-22 ofthe Regulations, 

### meet anon-ozone season emission limit ofO.151btM:MBru. Priorto October 1, 2004, October 1, 2005 and October I, 2006, NGC shall estimate and acquire the 

### amountofDERCs orallowances required forsuch non-ozone season needep to comply with Section 22a-174-22(e)(3) ofthe Regulations as follows: Estiinated DERCs (tons) use 

### = [Estimatedfuel use in MMBtu from October 1 through April 30 x (allowable emission rate in IbsIMMBtu

- (0.95 x 0.15 IblMMBtu»j + 2000 Ibslton 

### Delete paragraph C.2.d. and substitute the following therefor: No later than May 31 of2005, 2006 and 2007, in addition to the DERCs retired pursuant to paragraph C.2."- ofthis Trading Agreement and Order, NGC shall 

### calculate and permanently retireDERCs used in the preceding non-ozone season as follows: Actual DERCs (tons) used 

### = [Actual fuel use in MMBtu from October 1 through 

### April 30 x (allowable emission rate in IbsJM:MBtu

- (0.95 x 0.15 IblMMBtu»] + 2000 lbslton

, 

### \. 7. Delete paragraph C.6. and substitute the following therefor: (a) Annual DERC Report. No laterthan March 1 ofevery yearafterissuance of this Trading Agreement and Order, NGC shall submit in writing to the 

### Commissioner, arecordofeach sale orother transfer ofDERCs for the previous calendaryear. NGC shall also include actual NOx emissions from the peaking unit and the amount ofall DERCs used (including serial numbern (if assigned) andDERCs purchased from other facilities). These reports shall be 

### on foIlDS prescribed by the Commissionerand shall be 

### in monthly increments, and by ozone and non ozone seasons. (b) Starting on October 1, 2004: No later than July 30 ofevery year afterissuance ofthis Trading Agreement and Order, NGC shall submit in writing to the 

### Commissioner the non-ozone season fuel consumption and amount ofall

### Northeast Generation Company 4 

### Trading Agreement and Order No. Sl75A Modification No. I 

## A V DERCs used (including serial numbers (ifassigned) and approved DERCs 

### purchased from otherfacilities) for the peaking unit during the October through April time period in the previous calendar year. These reports shall be on a fonn prescribed by the Commissioner. 8. Delete paragraph C.7. and substitute the following therefor: Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, NGC**m~y** 

### use NOx allowances, until May 1, 2007, for the peaking unitpursuant to Section 22a-174-22(j) ofthe Regulations to achieve all or aportion ofthe reductions requiredby Section 22a-174-22 ofthe Regulations. Any allowance used for compliance with Section 22a-174-22(e) ofthe Regulations shall be subject to all 

### restrictions and/orrequirements applicable to DERCs contained in this Trading Agreement and Order;
a. In 

### orderforNGC to use NOx allowances, NGC shall create ageneral accountoruse an existing compliance accountor overdraft accountin EPA's NOx Allowance Tracking System ("NATS"); and 

### b. Each allowance used forcompliance 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 transferred from the facility's 

### NOx general accountin the NATS orthe facility's NOx compliance account in the NATS to the CT State NOx RetirementAccount (Account ID CTOO00000300 in the NATS). 9. Delete paragraph C.S. and substitute the following therefor: DERC ShQrtfali. At a minimum, DERCs required shall be adjusted upwards by 

### 100% ifDERCs are notin NGC's possession for use priorto the frrst day ofeach month or applicable season. However, nothing in this Trading Agreement and Order shall affectthe Commissioner's authority to institute any proceeding ortake any other action to require additional upward adjustment, based on the gravity ofany 

### allegednoncompliance or violation oflaw. NGC shall permanentlyretire the quantity ofDERCs equivalentto the excess emissions plus a 100% premium within sixty (60) days ofNGC's discovery ofthe DERC shortfall. NGC shall certify and 

### report any such DERC retirementto the Commissionerin accordance with paragraph C.30. ofthis Trading Agreement and Order. 10. Delete paragraph 

### C.W. and substitute the following therefor: 

### HER Exceedance. Noncompliance with an established HER shall subjectNGC to - i

i./-" 

### , Northeast Generation Company 

### 5 Trading Agreement and Order No. 8175A Modification No. I

11.

12. 

### 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 IbslMMBtu, multiplied by the total heatinput during the period ofnoncompliance divided by 2000 Ibslton. 

### Ifthe period ofnoncompliance is 

### notknown, the time periodfrom the completion ofthe last/previous Commissioner witnessed emission test through the date the FLER compliance is achieved as approved by the Commissionershall be 

### used. However, nothing in this Trading Agreement and Ordershall affect the Commissioner's authority to institute any proceeding or take any otheraction to require additional upward adjustment, based on the gravity ofany alleged noncompliance orviolation oflaw. NGC shall pennanently retire DERCs calculated in accordance with the above plus a 100% premium within sixty (60) days ofNGC's discovery ofthe 

### FLER exceedance: NGC 

### shall repon any FI.ER 

### exceedance to the Commissionerin accordance with paragraph C.30. ofthis Trading Agreement and Order. 

### Delete paragraph C.l3. and substitute the following therefor: Extension. No later than May 

### I, 2007, with respect to the peaking unit, NGC shall comply with the requirements ofSections 22a-174-22(d)(I) and 22a-174- 22(d)(2)(A) ofthe Regulations. There is no assurance that afterfull program review 

### ofthis and otherTrading Agreements and Orders that the Commissioner will grant a written extension ofUris Trading Agreement and Order. Delete paragraph C.l4. and substitute the following therefor: Future Compliance Report. On or before September I, 2006, NGC shall submit a 

### repon in writing to the Commissioner, as directed in paragraph C.3l. ofthis Trading Agreement and Order, indicating how the facility shall comply with Section 22a174-22 ofthe Regulations with respect to the peaking unit on and afterMay 1, 2007. 13. Delete paragraph C.17. and substitute the following therefor: Definitions. As used in this Trading Agreement and Order, "ApprovedDERCs" 

### are those for which the Commissionerhas provided written authorization foruse in compliance with Section 22a-l74-22 ofthe Regulations; "Commissioner" means the Commissioneror arepresentative ofthe Commissioner, "Non-ozone season" means the period from October I through April 30 in any given calendar year; "Ozone 

### season" means the periodMay 1through September30 in any given calendar year.

I 

### '. 14. Delete paragraph C.18. and substitute the following therefor: 

### Dates. The date of"issuance" ofthis Trading Agreement and Orderis the date the Trading Agreement and Orderis deposited in the U.S. mail or personally delivered,Northeast Generation Company 

### 6 Trading Agreement and Order No. 8175A Modification No.1 whichever is earlier. The date ofsubmission to the Commissioner ofany 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 under this Trading Agreement and Order, including but not limited to notice ofapproval or disapproval ofany document orother action, shall be the date such notice is deposited in the U.S. mail oris personally delivered, whichever is earlier. Except as otherwise specified in this Trading Agreement and Order, the word "day" as used in this Trading Agreement andOrdermeans 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 orfederal holiday shall be submitted or performed by the next day which is not a Saturday. Sunday or Connecticut or federal holiday. 15. Delete the word "individual" and substitute therefor the word "Section" in paragraph C.30. 16. Delete the name "Mr. Michael LaFleur" in paragraph C.31. All other terms and conditions ofTrading Agreement and Order no. 8175A issued by the Commissioner acting under Chapter446c, Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a177 ofthe Connecticut General Statutes shall remain in effect.

. i

### Northeast Generation Company 7 

### Trading Agreement and Order No. 8175A Modification No.1


### NGC hereby consents to the entry ofthis modification to the Trading Agreement and Order without further notice.
Signature: Type Name: Type Title: 

### Date: Vice President



### Issued as amodification ofan Order ofthe CommissionerofEnvironmental Protection. 

## (

MAlLED CERTIFIED MAIL,

. 

### . RETURN RECEIPT REQUE,STED Certified DocumentNo. Date

### A \....i