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 CT 06365

Identifier 1Client 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 ISection 22a·174-22 ofthe Regulations of

Connecticut State Ap;encies.

Nonattainment Area Classification Serious

Annual DERCs needed Estimated 5 ozone and I non-ozone.

Compliance Time Period Until April 30, 2007.

Max. Emission Rate: full load emission rate (FLER) Use. (See Table I below):

Table 1

NOx Emission Rates and Allowable Limits

Unit Fuel Maximum Stack rest FLER Allowable Date of 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 Order Modification supersedes Trading Agreement and

Order No. 8175A issued on April 24, 2003.

b. Calculations of credits used shall be as specified in Trading Agreement and Order No.

8175A.

c. Northeast Generation Company shall acquire and pennanently retire seven ozone season

DERCs for every actual ton of excess NOx emitted from the peaking unit during the

previous ozone season based upon the actual emissions for each day that Connecticut

one hour ozone levels were forecasted to be "moderate to unhealthful", "unhealthful", or

"very unhealthful",

~~:~~ 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 of a Trading Agreement and Order between the Commissioner of Environmental

Protection ("Commissioner") and Northeast Generation Company ("NGC").

WHEREAS, the Commissioner and NGc. having agreed to the terms and conditions set fonh

in Trading Agreement and Order No. 8175A signed by the Commissioner on April 28, 2003, do

now, by mutual agreement, modify said Trading 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 therefor May 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 of each month NGC shall have in its

possession sufficient approved DERCs for the current day for the peaking unit

based on the following calculations;

Before the first day of each month, NGC shall estimate DERCs required for such

month for the peaking unit as follows:

(i) At all times:

Estimated DERCs (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 of each month, NGC shall calculate and

permanently retire DERCs used in the preceding calendar month, 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 1 of

this Trading Agreement and Order.

• FLER = full load emission rate in lbsl1vTh1Btu as shown in Table 1 of this

.Trading Agreement and Order.

o Discount (0.95) ; 5% design margin applied to the allowable limit rate.

ti) During the ozone season onlY:

No later than December 31it each year, NGC shall acquire and permanently retire

seven ozone season DERCs for every acrual ton of excess NOx emitted from the

peaking unit during the previous ozone season based upon the acrual emissions for

each day that Connecticut one hour ozone levels were forecasted to be "moderate

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

revokes the I-hour standard. Upon such revocation, NGC shall calculate and

pemlanently retire seven ozone season DERCs for every acrual ton of excess NOx

emitted from the peaking unit during such ozone season based upon the actual

emissions for each day that Connecticut eight hour ozone levels were forecasted

to be "unhealthy for sensitive groups", "unhealthy", or "very unhealthy".

Where:

Actual ton of excess 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 of excess NOx emitted from the peaking unit during

forecasted ozone exceedance days shall be multiplied by seven and then rounded

to the next greater whole ton, to determine the number ofDERCs to be

permanently retired. This requirement is in addition to the NOC's requirement to

estimate excess emissions and subsequent permanent retirement of a sufficient

number of approved DERCs in accordance with paragraph C.2.a.(i) of this

Trading Agreement and 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-hour emission limit in Table 22-1 of Section 22a-174-22 of the Regulations,

meet a non-ozone season emission limit ofO.151btM:MBru. Prior to October 1,

2004, October 1, 2005 and October I, 2006, NGC shall estimate and acquire the

amount of DERCs or allowances required for such non-ozone season needep to

comply with Section 22a-174-22(e)(3) of the Regulations as follows:

Estiinated DERCs (tons) use = [Estimated fuel 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 of 2005, 2006 and 2007, in addition to the DERCs retired

pursuant to paragraph C.2."- of this Trading Agreement and Order, NGC shall

calculate and permanently retire DERCs 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 later than March 1 of every year after issuance of

this Trading Agreement and Order, NGC shall submit in writing to the

Commissioner, a record of each sale or other transfer of DERCs for the

previous calendar year. NGC shall also include actual NOx emissions from the

peaking unit and the amount of all DERCs used (including serial numbern (if

assigned) and DERCs purchased from other facilities). These reports shall be

on foIlDS prescribed by the Commissioner and shall be in monthly increments,

and by ozone and non ozone seasons.

(b) Starting on October 1, 2004: No later than July 30 of every year after issuance

of this Trading Agreement and Order, NGC shall submit in writing to the

Commissioner the non-ozone season fuel consumption and amount of all
Northeast Generation Company 4 Trading Agreement and Order

No. Sl75A Modification No. I A

V

DERCs used (including serial numbers (if assigned) and approved DERCs

purchased from other facilities) 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) of the Regulations, NGC

m~y use NOx allowances, until May 1, 2007, for the peaking unit 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 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;

a. In order for NGC to use NOx allowances, NGC shall create a general

account or use an existing compliance account or overdraft account in

EPA's NOx Allowance Tracking System ("NATS"); and

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

Regulations shall be equivalent to one discrete emission reduction credit.

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

NOx general account in the NATS or the facility's NOx compliance

account in the NATS to the CT State NOx Retirement Account (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% if DERCs are not in NGC's possession for use prior to the frrst day of each

month or applicable season. 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 of law. NGC shall permanently retire the

quantity of DERCs equivalent to the excess emissions plus a 100% premium within

sixty (60) days of NGC's discovery of the DERC shortfall. NGC shall certify and

report any such DERC retirement to the Commissioner in accordance with

paragraph C.30. of this Trading Agreement and Order.

10. Delete paragraph C.W. and substitute the following therefor:

HER Exceedance. Noncompliance with an established HER shall subject NGC to

- i

i.
/-"

, Northeast Generation Company 5 Trading Agreement and Order

No. 8175A Modification No. I

11.

12.

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

exceedance plus a 100% premium. The true up in tons of DERCs shall be equal to

the FLER exceedance in IbslMMBtu, multiplied by the total heat input during the

period of noncompliance divided by 2000 Ibslton. If the period of noncompliance is

not known, the time period from the completion of the last/previous Commissioner

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 of law. NGC shall

pennanently retire DERCs calculated in accordance with the above plus a 100%

premium within sixty (60) days ofNGC's discovery of the FLER exceedance: NGC

shall repon any FI.ER exceedance to the Commissioner in accordance with

paragraph C.30. of this 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 of Sections 22a-174-22(d)(I) and 22a-174-

22(d)(2)(A) of the Regulations. There is no assurance that after full program review

of this and other Trading Agreements and Orders that the Commissioner will grant a

written extension of Uris 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. of this Trading

Agreement and Order, indicating how the facility shall comply with Section 22a174-22 of the Regulations with respect to the peaking unit on and after May 1, 2007.

13. Delete paragraph C.17. and substitute the following therefor:

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-l74-22 of the Regulations; "Commissioner" means the

Commissioner or arepresentative of the Commissioner, "Non-ozone season" means

the period from October I through April 30 in any given calendar year; "Ozone

season" means the period May 1 through September 30 in any given calendar year.

I

'.

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

Dates. 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,
Northeast Generation Company 6 Trading Agreement and Order

No. 8175A Modification No.1

whichever is earlier. 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

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

disapproval 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 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 of Trading Agreement and Order no. 8175A issued by the

Commissioner acting under Chapter 446c, Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a177 of the 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 of this modification to the Trading Agreement and Order

without further notice.

Signature:

Type Name:

Type Title:

Date:

Vice President

Issued as a modification of an Order of the Commissioner of Environmental Protection.

(

MAlLED CERTIFIED MAIL, . . RETURN RECEIPT REQUE,STED

Certified Document No.

Date
A

\....i