# .~**L:f.:!,.~~** 

# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the maner of
The State ofConnecticut,artd Borough ofNaugaruck ) ) ) ) 

### ) Trading Agreement and Order No. 8247



### \Vhereas, the CommissionerofEnvironmental Protection ("Commissioner") and Borough ofNaugatuck ("Naugatuck") agree that it is 

### in the public interest that they work cooperatively to improve the air quality within the State ofConnecticut and that the use ofdiscrete emission reduction credit ("DERC'1 trading to reduce nitrogen oxide (''NOx'') emissions will achieve this result 

### in a timely and cost-effective manner:
A. With the agreement ofNaugatuck, the Commissioner ofEnvironmental Protection ("Commissioner'') finds the following:
1. This Trading Agreement and Order 5upercedes Consent Order 1626 issued on February 14, 2001 and Consent Order 1626 Modification 1 issued on July 31, 2002.

2. Naugatuck owns a treannent facility located at 500 Cherry Street, Naugatuck, Connecticut ("facility").

3. At the facility, Naugatuck owns fuel-burning equipment that consists ofrwo Nichols multiple-hearth sewage sludge incinerators, west mcineratorpermit
no. 109-0001 ("west incinerator") and east incinerator permit no. 109-0002 ("east incinerator") which are subject to Section 22a-174-22 ofthe Regulations ofConnecticut State Agencies ("Regulations''). The east and west incinerators are operated by U.S. Filter Operating Services.

4. Emissions testing performed in November 2001, on the east and west incinerators resulted in NOx emission rates as follows:

(PriMed on Recycled hper) 79 Elm Street • Hartford, CT 06106

- 5127 hup:lldcp.SIIIC.CI.U5 A./t**fq,u~I'** Oppor!llltiry Employer

### Borough ofNaugatuck 

### TradingAgreement and Order No. 8247 Table I Nauoatuck
- NOx Emission Rates aDd Allowable 

### Limits (Ibs!MMBtu)


# . Emission Fuel Maximum Emission FLER AJlowable Test Next Units capacity Test Rate Date Emission Test Due East sewage 1.2 dry 0.53 0.58 0.33 1118/01 1118/06 Incinerator sludge and tonsllrr No.2 fuel oil West sewage 1.2 dry 0.55 0.60 0.33 lImOI lIm06 Incinerator sludge and tonsllrr No.2 fuel oil
5. 

### When operating the east and west incinerators, Naugatuck exceeds the NOx allowable emission rate limit specified in Section22a-174-22(e), ofthe 

### Regulations as shown in Table lofthis Trading Agreement and Order.
6. 

### Pursuantto Section22a-174-220) ofthe 

### Regulations, Naugatuck proposes, when operating the east and west incinerators, to acquire and use DERC trading to comply with 

### the applicable emission limitations contained in Section 22a-174-22(e) ofthe Regulations until May 1, 2007 at the facility 

### in accordance with this TradingAgreementand Order.

7. Naugatuckproposes to use Full Load Emission Rates ("FLERs'l identified in 

### Table 1ofthis 

### TradingAgreement and Order for the purposes ofcalculating the DERCs required.


### 8. The Commissioner, in accordance with the provisions ofSection22a-174- 22(j) ofthe Regulati()ns, allows the use ofapproved unused NOx DERCs 

### referenced in Table 1ofthis TradingAgreement and Order. TheseDERCs are subject to the vintage restrictions ofthis 

### Trading Agreement and Order. Dates after which the unused DERCs will no longerbe eligible for use as a result ofthe 

### vintage restrictions are provided in Table 1ofthis 

### Trading Agreement and Orderin the expiration date column.

Table I Yen of Ozone season NOx DERC Ozone Non-ozone season NOx Non· Expiration Generation origination season DERC origination ozone Date NOx se2.son DERCs NOx DERC 1998 Bristol Resource Recoverv 13 Bristol Resource Recovery 18 12131/04 Pre-2000 United**I1luminarin~** 22 United Illuminating 35 12131104 Pre-20()() 

### I United Illuminatin2 13 N/A NIA 12131/04 Pre-2000 N/A N/A United**IIIwni.narin~** 19 

### I 12131104 Pre·2000 Bristol Resource Recovery IS N/A N/A 12131104 Pre-2000 N/A N/A Wisvest-Connecticut, LLC 18 12131/04 2002 

### PSEG 3 N/A N/A 12131/07

2Borough ofNaugatuck Trading Agreement and Order No. 8247



# "-_.' B. The Commissioner in accordance with the provisions 

### ofthis Trading Agreement and Order, pursuant to Section 22a-174-22(j) ofthe Regulations hereby allows Naugatuck to comply with Section 22a-174-22(d) ofthe Regulations through use ofDERC trading to achieve the NOx emission reduction required by Section 22aI74-22(d)(I) ofthe Regulations.
C. With the agreement ofNaugatuck, the Commissioner, acting under Connecticut General Statues Sections 22a-6, 22a-174, 22a-174, 22a-176, and 22a-I77, orders Naugatuck as follOws:

1. Upon issuance ofthis Trading Agreement and Order, at the facility, Naugatuck shall comply with Section 22a-174-22 ofthe Regulations through DERC trading. Until Naugatuck achieves permanent compliance with the emission standard in Section 22a-174-22(e) ofthe regulation orby April 3D, 2007 whichever occurs earlier:

a. Naugatuck shall use approved DERCs 

### as required under this Trading Agreement and Order;
b. Naugatuck shall have in its possession sufficient approved DERCs to meet applicable NOx emission limits 

### as allowed underthis Trading Agreement and Order; and

c. Naugatuck shall comply during operation ofthe east and west incinerators 

### with the 

### FLERS shown in Table 

### 1 ofthis Trading Agreement and Order.
2. DERCuse.

a. Until April 30, 2007, before the first day ofeach month, Naugatuck shall have in its possession sufficient approved DERCs for the east and west incinerators based on 

### the following calculations.
Before the first day ofeach month, Naugatuck shall estimate DERCs required for such month for the east and west incinerators as follows:
Estimated DERCs (tons) «estimated fuel use in MMBtu) x «(FLER)- (0.95 x 0.33 IbslMMBtu»J +2000 pounds/ton;
Where:

• Allowable limit = 0.33 IbslMMBtu as shown in table I of this Trading Agreement and Order.

• FLER

- full load emission rate in IbsIM:MBru as shown in table I of this Trading Agreement and Order.

3Borough ofNaugatuck Trading Agreement and Order No. 8247

• Discount (.95) = %5 design'margin applied to the allowable limit.

• Fuel heating value is derived from the the amounts ofall sewage

sludge and No.2 oil (collectively referred to as "fuel")

3. b. No later than the twentieth day ofeach month, calculate and pennanently retire DERCs used in the preceding calendarmonth for the east and west incinerators as follows: I Actual DERCs (tons) = «actual fuel use 

### in MMBtu) x «FLER)-(0.95 x 0.33 IbslMMBtu))}+2000 pounds/ton. Naugatuck shall make and keep records of: daily fuel use and fuel type; excess NOx emissions; the number ofDERCs in its possession, created, purchased and used (by serial number ifass.igned) each month in accordance with the appropriate emission rates and limits in this Trading Agreement and Order; the number ofDERCs used during the ozone
. season and non-ozone season (the remainder ofthe year); during the ozone season; as well as documentation attesting to the fact that approved DERCs used during the ozone season were generated during the ozone season. Generator certification ofthis fact shall be sufficient. Naugatuck shall maintain and submit such records to the Commissioner in accordance with Section 22a-174-22 ofthe Regulations
4. Record Keeping. Naugatuck shall retain records and supporting documentation as described in this Trading Agreement and Orderfor a minimum offive years, commencing on the date such records were created. Naugatuck shall provide the records specified above to the Commissionerwithin 

### thirty (30) days ofreceipt ofa written request from the Commissioner
5. Annual Emission Statement. No laterthan March 1 ofevery year after issuance ofthis Trading Agreement and Order, Naugatuck shall include with the Annual Emission Statementprovided to the Commissioner, a record ofeach sale or othertransfer, and use ofany and all ofthe DERCs approved within and subsequent to issuance ofthis Trading Agreement and Orderuntil all such DERCs have been used or are no longer in Naugatuck's possession. Naugatuck shall also include actual NOx emissions from the east and west incinerators'and the amount ofall DERCs used (including serial numbers (ifassigned) and approved DERCs generated and/or purchased from other facilities), generated and/or approved for the previous calendaryear. These reports shall be on a form prescribed by the Commissioner and shall be in monthly increments. Should Naugatuck choose to discontinue the generation ofDERCs, Naugatuck will notify the Commissioner upon discontinuance.

4 /Borough ofNaugatuck Trading Agreement and Order No. 8247
6. Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, Naugatuck may use NOx allowances, through April 30, 2007, pursuant to Section 22a-174-220) ofthe Regulations to achieve all or a ponion oithe 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 restrictions andlor requirements applicable to DERCs contained in this Trading Agreement and Order;

a. In order for Naugatuck to use NOx allowances, Naugatuck shall**cre~te** a general 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 22a-174-22 ofthe Regulations when they
are transferred from the facility's NOx general account in the NATS to the CT State NOx Retirement Account (Account ill CTOOOOO00300 in theNATS).

7. DERC Douhling. At a minimum, DERCs required shall be adjusted upwards by 100% ifDERCs are not in Naugatuck's possession prior to the first day ofeach month. Howeverbased on the gravity ofthe noncompliance, the Commissioner mayrequire additional upwards adjustment.
8. VintageRestriction. For the purposes ofcompliance with Section 22a174-22 ofthe Regulations, DERCslal10wances shall onlyremain valid for five (5) calendar years from the year ofthe generation/allocation ofsuch DERCsiallowances. DERCsiallowances 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 priorto calendar year 2000 are valid for use for compliance with Section 22a-174-22 ofthe Regulations up to and including December 31, 2004.



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### 9. FLER Exceedance. Noncompliance with an established FLER shall subject Naugatuck to make restitution by matching the quantity of emissions (''true up") caused bythe exceedance plus a 100% premium. The true up in tons ofDERCs shall be equal to the FLER exceedance in IbsIMMBru, multiplied by the total heat input during the period of noncompliance divided by 2000 lbs/ton. lithe period ofnODcompliance is not known., the time period from the completion ofthe 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

5Borough of augatuck Trading Agreement and Order No. 8247 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.

10. FLER Modification. FLERs set forth in Table 1 ofthis Trading Agreement and Order may be modified only after the consent ofthe Commissionerby written modification ofthis Trading Agreement and Order. I 11. Emissions'Testing. Pursuant to Section 22a-174-22(k) ofthe Regulations, Naugatuck shall conduct NOx emission tests ofthe east and west incinerators at least once every five years commencing from the dates of the NOx emission tests for the east and west incinerators as provided in Table 1 ofthis Trading Agreement and Order.

12. Extension. No later than April 30, 2007, with respect to the east and west incinerators Naugatuck shall comply with the requirements ofSection' 22a-174-22(d)(I) ofthe Regulations. However, after full program review ofthis and other Trading Agreements and Orders and, ifdetennined to be appropriate, the Commissioner may grant a written extension ofthis Trading Agreement and Order.
13. Future Compliance Report. On orbefore September I, 2006, Naugatuck shall submit a report indicating how the facility shall complywith**sectio~** 22a-174-22 ofthe Regulations with respect to the east and west incinerators on and afterMay I, 2007.
14. Full compliance. Naugatuck shall not be considered in full compliance 

### with this TradingAgreement and Order until all actions required by this Trading Agreement and Orderhave been completedas approved and to the Commissioner's satisfaction.

.



### , '-...-.' 15. Approvals. Naugatuck shall use best efforts to submit to the Commissioner all docwnents required by this TradingAgreement and Order in a complete and approvable fonn. 

### Ifthe Commissioner notifies Naugatuck that any document or other action is deficient, and does not approve it with conditions or modifications, it is deemed disapproved, and Naugatuck 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 any document or other action under this Trading Agreement and Order, the Commissioner may approve the docwnent or other action as submitted orperfonned or with such conditions ormodifications as the Commissioner deems necessary to carry out the purposes ofthis Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance or delay.

6!:Sorougn or NaugatucK 1raamg Agreement and Order No. 8247

16. Definitions. As used in this Trading Agreement and Order, "Commissioner" means the Commissioner or arepresentative ofthe Commissioner; and "Ozone season" means the period from May 1 through September 30 in any given calendaryear. The date of"issuance" ofthis Trading Agreement and Orderis the date the Trading Agreement and Orderis deposited in the U.S. mail orpersonally delivered, whicheveris earlier. Approved DERCs are defined forpurposes ofthis Trading Agreement and Order as those for which the Commissionerbas provided wrinen au!h0rization for use in compliance with Section 22a-174-22 ofthe Regulations.
17. Dates. 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 Commissionerunder this Trading Agreement and Order, including but not limited to notice ofapproval or disapproval ofany docwnent or other action, shall be the date such notice is deposited in the U.S. mail oris personally delivered, whicheveris earlier. Except as otherwise specified in this Trading Agreement and Order, the word "day" as used in this TradingAgreement and Ordermeans calendar day. Anydocument or action which is required by this Trading Agreement and Orderto be submitted orperformedby adate which falls on a Saturday, Sunday or a Connecticut orfederal holiday shall be submitted orperformed by the next day which is not a Saturday, Sundayor Connecticut orfederal holiday.
18. Certification ofdocuments" Anydocument, including but not limited to anynotice, which is required to be submitted to the Commissioner"under this Trading Agreement and Order shall be signed by Naugatuck or, if Naugatuckis not"an individual, byNaugatuck's chiefexecutive officer or a duly authorized representative ofsuch officer, as those terms are defined in Section 22a-430-3(b)(2) ofthe Regulations ofConnecticut State Agencies, and by the individual(s) responsible for actuallypreparing such docwnent, and Naugatuck orNaugatuck's chiefexecutive officer and each such individual shall certify in writing as follows:

"I have personally examined and am familiar with the information submitted 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 ofmyknowledge and belief. Iunderstand that any false statement made 

### in the submitted information is punishable as acriminal offense under Section 53a-157b of the Connecticut General Statutes and any other applicable law."

7Borough ofNaugatuck Trading Agreement and Order No. 8247**.~**

# ... J

l )



# -- 19. Noncompliance. This Trading Agreement and Orderis a final order ofthe Commissioner with respect to the maners addressed herein, and is nonappealable and immediately enforceable. Failure to comply with this Trading Agreement and Order may subject Naugatuckto an injunction and penalties.

20. False statements. Any false statement in any infonnation submined pursuant 10 this Trading Agreement and Orderis punishable as acriminal offense under Section**53a.l~7b** ofthe Connecticut General Statutes and any other applicable law.
21. Notice oftransfer; liability ofNau2atuck. Until Naugatuck has fully complied with this Trading Agreement and Order, Naugatuck shall notify the Commissionerin writing no later than 15 days after transfening all or any portion ofthe facility, the operations, the site orthe business which is the subject ofthis Trading Agreement and Order or after obtaining anew mailing
or location address. Naugatuck's obligations under this Trading Agreement and Order shall not be affected by the passage oftitle to any property to any otherperson or municipality.

22. Commissioner's powers. Nothing in this Trading Agreement and Order shall affect the Commissioner's authority to institute anyproceeding or take any other action to prevent or abate violations oflaw, prevent or abate pollution,
recover costs and natural resource damages, and to impose penalties for past, present, or future violations oflaw. Ifat any time the Commissioner detennines that the actions taken byNaugatuckpursuantto this Trading Agreement and Orderhave not successfullycorrected all violations, fully characterized the ext;nt or degree'ofany pollution, or successfully abated or prevented pollution, the Commissionermay institute any proceeding to require Naugatuck to undertake further investigation orfurther action to prevent or abate violations orpollution.

23. Naugatuck's obligations under law. Nothing 

### in this Trading Agreement and Order shall relieve Naugatuck ofother obligations under applicable federal, state and local law.


### 24. No assurance bv Commissioner. No provision ofthis Trading Agreement and Order and no action orinaction by the Commissionershall be construed to constitute an assurance by the Commissionerthat the actions taken by Naugatuckpursuant to this Trading Agreement and Order will result in compliance orprevent or abate pollution.

25. Access to facility. Any representative ofthe Department ofEnvironmental Protection may enterthe facility without prior notice for the purposes of monitoring and enforcing the actions required or allowed by this Trading Agreement and Order.

8

### J:Sorougn or J''1augatuCK l

### racmg Agreement and Urder No. 8247

26. No effect on ri 

### ghts ofotherpersons. This Trading Agreement and Order neither creates nor affects any rights ofpersons or municipalities that are not panies to this Trading Agreement and Order.

27. No Creation ofPropertv Rie:hts. This Trading Agreement and Order does not create any property rights with respect to these DERCs.
28

.. otice to Commissionerofchane:es. Within 15 days ofthe date Naugatuck becomes aWaI:e'ofachange 

### in any information submitted to the Commissioner under this Trading Agreement and Order, orthat any such information was inaccurate ormisleading orthat any relevant information was omitted, Naugatuck shall submit the correct or omitted infonnation to the Commissioner.
29. Notification ofnoncompliance. In 

### the event that Naugatuckbecomes aware that it did not ormaynot comply, or did not ormay not comply on time, with any requirement ofthis Trading Agreement and Orderor ofany document required hereunder, Naugatuck shall immediately notifyby telephone the individual identified in the next paragraph and shall take all reasonable steps to ensure that any noncompliance or delay is avoided or, ifunavoidable, is minimized to the greatest extentpossible. Within five (5) days ofthe initial notice, Naugatuck 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 Naugatuck shall complywith any dates which maybe approved in writing by the Commissioner. Notification by Naugatuck shall not excuse noncompliance or delay, and the Commissioner's approval ofany compliance dates proposed shall not excuse noncompliance Of 

### delay unless specifically so statedby the Commissionerin writing.
30. Submission ofdocuments. 

### Any documentrequired to be submitted to the Commissionerunder this Trading Agreement and Order shall, unless otherwise specified in 

### this Trading Agreement and Orderorin writing by

### the Commissioner, be directed to:
Mrs. Elizabeth McAuliffe Department ofEnvironmental Protection Bureau of

### AirManagement Emissions and CreditTrading Section 79 Elm Street Hanford, Connecticut 06106-5127

9

### Borough ofNaugatuck 

### TradingAgreement and Order No, 8247**~-,** I**'~** 

### Naugaruck consents to the issuance of

### this 

### Trading Agreement and Orderwithout further notice. The undersigned certifies that he/she is fully authorized to enter into this Trading Agreement and Orderand to legally bind Naugaruck to the terms and conditions ofthe 

### Trading Agreement and Order, Borough ofNaugatuck



### Date:

Issued as afinal order

### ofthe Commissioner

### ofEnvironmental Protection

on

# _0!-f-!.'~"-'"&!::...-'_, 2003



### / ur,1.**~ocque.** 

### Jr. 

### onurusslOner



### BOROUGH OFNAUGATUCKLAND RECORDS
MAILED CERTIFIED MAIL, RETURN RECEIPT REQUESTED
CertifiedDocwnentNo.

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