### Exhibil3 

# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of
The State of Connecticut
and Middletown Power LLC 

### I ) I I ) ) ) Trading Agreement and Order No. 8182

Whereas, the Commissioner of Environmental Protection ("Comn1issioner") and Middletown Power LLC (ITMP") agree that it is in the public interest that they work**coopera~ively** to improve the air quality within the State of Connecticut and that the use of emission reduction credit (nERC") trading to reduce nitrogen oxide (nNOx N )**emissio~s ~il1**  achieve this result in a timely and C05teffective manner:

A. At the request and with the agreement of MP, the**Com~issioner** finds the 

### following:

1.

2.

3. MP 

### is an exemot wholesale electric generating company with its orincioal olace of business in Sewickley,**pe~_~s~lvan~a.** On or oefore·December 31, 1999 MP will purchase from !he**Co~~ecticut** Light and Power Comnany and then own one (1) piece of fuel-burning equioment ("oeaking unit") identified in Table 1 of this Trading Agreement ana Order. This peaking unit is a combustion turbine.
On or before December 31, 1999 NRG Middletown ODerations Inc. will ooerate the oeaking unit identified in Table 1 

# of this Trading Agreement ana Order at MP's facility. Official U.S. Environmental Protection Agency ("EPA") Reference Method 7£ stack testing oerformed on the date indicated in Table 1, resulted in a NOx emission rate set forth in Table 1.

'!'.e.ble l lG 

## - NOx EMISSION ?Y.'!':E: A1ID RACT LIi-n::T (lbs/MlGtl.1.) Peaking Unit FUEL ?'LE'a NOx >ACT Stack Stack Test Date of (lbs/MMEtu) Rate Test aate Stack

• (lbs/MM3tu) Rate (lbs/MM3tu) .Test (pp:nvd) Middleto;,,'l1 lO other 0.67 0.289 159.7 0.61 

# , 10/18/96 oil

4. The emission race for the peakinq**u-~it** and fuel specified in Table 1 is in excess of Section**22a-17~-22,** Table 22-2 ·of the Regulations of Connecticut State Agencies ("Reguiations U ), NOx em1ssion rate limits (Reasonably Available Concrol Technology "MeT")

.



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.....

### Middletown Power LLC Trading Agreement and Order No. 8182

1. 9.



### c. 5. ?ursuant to Section 22a-174-22(b) of the**Re~lations,** the oeaking unit is subject to Sections 22a-174-22(d) tnrough (k) of the aegulations, pertaining to the control of 

### NOx emissions.


### 6. In accordance with Section 22a-l74-22(j) of the Regulations, 

### MP oroposes that for the oeaking unit identified in Table 1, MP shall use· ERC trading when burning "other oil", as that term is defined in Section 22a-174-22 of the Regulations. 7. ?ursuant to the Department of Environmental ?rotection's**~Credit** Trading for Sources with Irregular NOx Emissions'" Doliey, with a revisea date of November 5, 1997, attached hereto and incorcorated by reference into this Trading Agreement and Order as Exhibit 1, tne oeaking unit has peak daily HOx emissions greater than three times the average daily emissions during the ozone season and is therefore considered a source with irregular NOx emissions. 8. Based on**D~P** aporoved stack test data, it has been determined that the peaking unit's emissions will not meet the applicable reouirements of**~~CT** contained in Section**22a-17~~22** of the**Re~lations.** M? proPoses to use a Full Load Emission Rate (\\rLER") ';dentified In Table 1 for the purposes of calculating E?Cs**requ~red.** 9. MP intends to continue acquiring approved 3RCs as needed. 10. Approved 2RCs are defined for the ?uroose of this Trading Agreement and Order as those for which the Commissioner nas orovided written authorization for use in compliance with Section :22a-174-22 of the Regulations.

. The Commissioner, in accordance with the orovisions of this Trading Agreement and Order, and pursuant to Section 22a-174-22 (i) of the**Regulat~ons h~reb~** **allows_M~** to**co~ly w~~h** **Sectio~** 22a-1?4-22 of**th~ Regulat~ons**  tnrougn use oz**~RC traa~ng**  reLerenced**~n** Sect10n A,**here~n,** to achieve the nitrogen oxide emission reduction recruired by Section 22a-174-22(d) (2) of the**~e9'.llations.** - With the agreement of MP, the Commissioner, acting lli.der Connecticut General Statutes Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a-177, orders MP as follows: Upon issuance of this Trading Agreement and Order MP shall comolv**dur~ng** operation of the peak1ng**u-~it** with the FLER shown in Table 1 aDove. 2. On and after the date which MP ourchases the oeaking unit identified in Table 1 of this Trading Agreement and Order, MP shall have in its possession sufficient aDoroved ERCs to meet applicable RP.CT requirements and the requirements of chis Trading Agreement and Order.
3. On and after the date which M? purchases the peaking tu.it identified in Table 1 of this Trading Agreement and Order, M? shall, on a daily basis, document ana record the**amo~~ts** of all fuel used by the Deaking unit each day and the number of ERCs used for the ozone season (from May 1 through**Se~tember** 30 of each year) and non-ozone season (the remainaer 01 the year)

. 4. On and after the date which M? purchases the oeaking unit identified in Table 1 of this Trading Agreement and Order, oursuant to Section 22a-174-22(j) of the Regulations, 

### MP shall acouire from The Connecticut Liant and Power comoanr sufficient aporoved non-ozone season ERCs 

# rn order co meet aDO icable**R~CT** requirements 

### and the requirements of this Trading·Agreement and**O~der.for th~**  operation of tqe peakiqg**~nit** identif1ed_in Table 1 or**th~s Trad~ng**  Agreement ana Order**aur~ng** the month or**Dece~ber,** 1999.



# .. Initials

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### Middletown Power LLC Trading Agreement and**Orde~** No. 8182

S. Except as provided 

### in paragraph C.4. of this Trading Agreement and order( on 

### and after the date which 

### MP purchases 

### the peaking unit**ident~fied** in Table-l of this Trading Agreement and Order, pursuant to Section 22a-174-22(j) of the Regulations, M? shall acquire from The Connecticut Light and Power Company sufficient approved ozone and non-ozone season ERCs in order to meet aPDlicable RACT reauirements and the requirements of this Trading Agreement and Order for the following month's operation.
6. In accordance with**E~~ibit** 1 of this Trading Agreement and Order, ozone season ERCs for use during the ozone season shall be purchased by M? prior to the beginning of the ozone season. 7.**O~** and after the date which 

### MP purchases the peaking unit identified in Table 1 of this Trading Agreement and Order, MP shall maintain and provide. the recoras required by paragraph C.3. of this Trading Agreement and Order in accordance with**che~** following and Seccion 22a-174-4 of the Regulations, and shall:

a. Have in its oossession sufficient aporoved ERCs for the current**day(~based** on the following-calculations**(describ~d** also in**Exn~bit** 1); At all times (mass**calculatio~):** 3RCs (in tons) [({FLER in Ibs/MMBtu)

- (0.95 x NOx ?ACT in lbs/MM3tu» x (actual fuel use in lbs/MMStu)J + 2000 pounds/ton During the ozone season only (peak day calculation) : the maximum actual excess NOx emissions (in lbs) on any of the days projected bv the Commissioner to be**~moderate** to**~~ealchful, ~~~healthful,fl**  or "very**lli~ealthful,fl** divided by 3 and then divided by 13 (with the result in tons) 3RCs (in tons) • [(Maximum excess NOx in lbs) 3J [13 lbs/day/ton] ; b. At a minimum,**adj~st** upwards,by 

### 109' the ERCs required if**E~Cs** are not in M?'s**possess~on pr~or**  co use;

c. As described in**2y~ibit** 1 of chis Trading Agreement and Order, to the extent that ERCs used co o4fset on a peak day basis during the ozone season exceed the total mass-excess emissions, remaining**E~Cs** may be used in the non-ozone season in the same or subsequent years**u-~til** May 1, 2003; d. Document and record daily fuel use, excess NOy. emissions and, during the ozone season,

.the ozone classification as forecasced by the Commissioner on che previous day;

e.

f.

g. NO later than March 1, 2000, 2001, 2002, 2003 and 2004, include with its annual emissions reDort to the Commissioner, ERCs used (calculated as described in section C.7.a. above), by ozone and non-ozone seasons, for the previous calendar year; Retain the records and sUPDorting documentation as described in this section for a minimum of five years, commencing on the date such records are created; Maintain documentation to attest to the fact thac**3~Cs** used during the ozone season were generated during the ozone season. The ozone season is rrom May 1 through SeDcember 30 in any calendar year. Generator**cer~ification** of chis fact shall be sufficienc; and 

# "-:e'

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### Middletown Power LLC Trading Agreement and O=der No. 8182

h. Provide the records specified above to the Commissioner**w~thin t~ir~y**  (30) days of receipt of a written request from tne Comml.ssl.oner.

8.

9.

10.

11.

12. Pursuant to the intent of Section 22a-174-22a(f) (4) of the Regulations, M? may, for a budget source, use allowances acquired pursuant to the provisions of Section 22a-174-22a of the xegulations to comply with subsection (e) af Section 22a-174-22 of the Regulations pursuant to the orovisions of subsection (jl of Section 22a-174-22 of the Regulations as long as 

### MP remains an owner of that budget sourcei for pUrPoses of this Trading Agreement and Order.**~~y a_low~~ce**  used for comnliance with subsection (e) of Section 22a-174-·22 of the Regulations shall be subject to all restrictions and/or requirements applicable to ERCs contained in this Trading Agreement and Order and70r Section 22a174-22a of the Regulations. The terms**~~d** conditions established by this Trading Agreement and Order shall become effective on the date M? purchases the peaking unit identified in Table 1 of this Trading Agreement and Order, and upon issuance of this Trading Agreement and Order. Nq**late~** than**Ma~** 1, 2003, MP_sh?11 comDly.with the**require~ents** or: Sectl.on 22a-1/4-22{d) (2) or: tne**Re~lat:l.ons.** However, atter full program review ox this and other Trading Agreements and Orders and{ if determined to be appropriate, the Commissioner may grant a**wr~tten** extension of this-Traaing Agreement and Order.**8efiijit~Qns.** .n.s used in this order, "Commissioner" means the**omml.ss~oner** of Environmental Protection or an**a~ent** of the Commissioner.**~Other** oil u**me~~s** a fuel that is -i9Uid at**sta~dard** conditions**~~d** is not residual oil.**~Residual** oil means any :uel oil of No.4, No.5, or No.6 grades, as defined by Commercial Standard C.S. 12-48. I10zone season" means the perlod from May 1 through September 30 in any given calendar year. "Issuance" means the date this Trading Agreement and Order is deposited in the U.S. Mail or the date it**~s** personally delivered, whichever is earlier.**Ngti;~ca~i§n** of noncompliance. In the event that M? becomes aware t. at l.t l. not or may not comoly, or did not or may not comoly on time, with any requirement of thl.s Trading Agreement and Order or of any document required hereunder! MP shall by telephone immedl.ately notify the Bureau of A2r Management and shall take all reasonable steps to ensure that any noncomDliance or delay is avoided or, if unavoidable, is min:tmized to the greatest extent possible. MP shall also notify the Commissioner .in

..... -riting within ten days of becoming aware of the noncompliance or potential noncompliance stating the date, time, ana duration of the**non~a~p~iance{** Fhe**reaso~s** for the noncompliance or delay and,all**act~v~tl.es** whl.cn 

### MP and**~ts** acents, emoloyees and reDresentatl.ves took to avoid or repair the results of-the noncomoliance**~,d** prevent the.noncomoliance, and oronose, for the review**~,d** written aDProval of the**Com~issioner{** dates by which comoliance will be achieved. ·MP shall comoly**w~th** any dates which 

### may be approved in writing by the**Commiss~oner.** Notification by 

### MP snaIl not excuse noncompliance or delay, and the Commissioner s approval of any comoliance dates prooosed shall not excuse noncomoliance or delay**~~less** specificallr so stated by the Commissioner- in writing.**Nothin~ ner~in.**  sha 

### 1**neg~te MP'~** **o~~igation** to comp}y**with,S~ction** 22a-17_-7**o~** tne Regulatl.ons. LO tne extent that tne**orOVls~ons** of Section 22a-174-7 are inconsistent with the provisions of this Trading Agreement and Order, the more stringent of the provisions in the Trading Agreement and Order or Section 22a-174-7 shall control.

-4- 13.**Certif~catiQn** of**dQcumen~~. ~~,y**  document, including but not IHrl1te to any notl.ce, w ••1ch is requ.ired to be subml.tted to the Commissioner under this Trading Agreement and Order shall be signed by the responsible corporate officer of MP or a duly

Initials

# ~~Middletown Power LLC Trading Agreement and Order No. 8182



### and 14

.

15.

16.

17.

18.

19. authorized representative of such officer, as those terms are defined in Section 22a-430-3(b) (2) of the Regulations, and by the individual or individuals resoonsible for accually oreoaring such document f each of whom shall examine and be**famil~ar** with tne**in£ormat~on** submitted in the document and all attachments thereto, and shall make inquiry of those individuals responsible for obtaining the**informa~ion** to determine that the information is**tr~e,** accurate

## i and complete, and each of whom shall certify in**wr~t~ng** as fol ows:
"I have oersonally examined and am familiar with the information submittea in this document and all attachments thereto, and I certify that based on reasonable investigation, incluqlng my inauiry of those individuals reSDonsible for obtaining cne information, the submitted information is true, accurate and 20mplete 

### ;0 the**ee~t** of my**kno~ledge** and**~:~ief; ~I** **\L~d~rstand ~hat**  any raIse**s~a~ement** made 10 the**subml~~ed** In!ormatlon may be ounishaole as a criminal offense under Section 22a-175 of the tonnecticut General Statutes or, in accordance' with Section 22a-6 of the Connecticut General Statutes, under Section 53a-157b of the Connecticut General Statutes, and**i~** accordance with any other applicable statute." 

### Final Ao,eement and**or~er..** This Trading P·.greement and Order is the Ilna: agreemenc an order by and 

### beeween the Commissioner and 

### MP with respect co the matters addressed herein, and shall not be modified without the written agreement of both parties.**F~Se st~tements.**  Any false statement in any information s**m~cte** oursuant to this Trading Agreement and Order may be punishable-as a criminal offense under Section 22a-175 of the**top_~ecticut** General Statutes or, in accordance with Section 22a-6, under Section 53a-157b of the Connecticut General Statutes.**~Qr+ce** Qf**~raDsfer· l5~bilitv**  of M? and other

# a . Until MP has !u :v como:led wltfJ: t:lS Trading Jl..greemenc an Order, MP shall notiiy 

### the Commissioner in writlng no later**th~,** fifteen (15) days after transferring all or any oorcion of the facility, the operations, the slte or the Dusiness which are the sUbject of this Trading Agreement and Order, or obtaining a new mailing or locacion address.**}L~v** license transfer shall be conducted in accordance with Section 22a-60 of the Connecticut General Statutes. M?'s obligations under this Trading Agreement and Order shall not be affectea by the passage of title to any property to any other person or munlclpallcy.**CQ~~iss~o~fr'~ pQwer~.**  Nothing in this Trading Agreement and Or er snat a!!ect t e Cornmissloner's authority to institute any**p~oceeding** or take any other**ac~ion** to prevent or abate violations or law, prevent or abate**pollut~on,** recover costs and natural resource damages

## i and to lmpose oenalties for violations of law which are willfu or criminally negligent or for which oenalties have**no~ been.specificallr.p~oVided** **i~ thi~**  Trading**Agreem~nt** and Order,**lnclud~ng** but not**lm~ted** to vlolatlons of any oermlt issued by the Commissioner. If at any time the Commlssioner decermines that the actions taken by**~P** pursuant to this Trading Acreement and Order have not fully achieved comoliance with**$ect~oD** 22a-174-22 of.the Regulatlons, the Comm;ssioner may**;nst~tut~** any**proc~ed~ng** agalpst MP**~nd/or** requlre MP to undertake !urtner 1Dvesclgat1on or furtner**act~on.** MP's obEio$tiocs untieS lew. Nothing in this Trading Agreement Order s all relleve M. or other obllgations under aopllcahle federal, state and local law.

-**~ccess** co**re~o~ds** and facifity, 

### Any representative of the**;ep~r~Tent** qt.:nvlronmenta Protectlon**~y.enter** and**in~pect** the**~:cll~~y** ana lnspect and coPy records**Wl~nln** normal buslness hours without prior nocice for the purposes of monitoring and enforcing


### D}
, 

### Initials

## i'A~- -5-Middle:toolJl1 Po

.....er LLC Trading Agr-eement and Order No. 8182

20.

21.

22. the actions required or allowed by this Trading Agreement and Order.
No**effe~t** on**r~o~ts** of other gerf9ns. This Trading Agreement and Order s:alI**ne~t** er create nor a:rect any rights of persons who or municipalities which are not parties to this Trading Agreement and Order. 

# go Creation Qf Property Riohts. This Trading Agreement and Order

oes not create any property righes with respect to these ERCs. Npti§e to**Co~issioner** of**cbanoe~.** Within fifteen (15) days of tne ate MP eCQrnes aware or a canoe in any information sUbmitted to the Commissioner under this Trading Agree@ent and Order, or that any such information was inaccurate or misleading or that any relevant information was omitted, 

### MP shall submit the correct or omitted information to the Commissioner.
23.**s~m~ssi9n** 9£ dQcumants.**.~~~** document required to be submitted**t~omm~ss~oner** un er chis !rading Agreement and Order shall, unless otherwise specified in**writ~ng** by the Commissioner, be directed to: Mr. David Jawin Deoartment of 3nvironmental Protection Bureau of Air Management Comnliance and Field Qperations Division**~missions** and Credit Trading Section 79**~lm** Street Hartford, Connecticut 06106 to



### Initials -6-

### MiddletoNTI Power LLC Trading Agreement and Order No. 8182

MP consents to the issuance of this Trading Agreement and 

### Order without further notice. The undersigned certifies that he/she is fully authorized to enter into this Trading Agreement**fu~d** 

### Order and 

### to legally bind M? 

### to the terms and. conditions of 

### the Trading Agreement and 

### Order.

Middletown Power LLC


### Signature: Type Name: Type Title:
Date: Robert 

### S. Evans II

12/29/99

Issued as a 

### final**conse~t ord~he** **Gorr~issioner**
Environm.nta1 ?rot.ction on

# -:::J~ /J,

CITY 02**MIDDL~TO~N L.~ND**  ?.ECORDS**~_~rLED C~RTIFrED** **~~rL,** 

### RETURN RECEIPT**R~QU::;STED** 

### Certified DocumentExhibit 1 

### Trading Agreement**~id** 

### OrderNo. 8182

# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

REVISED 11/5/97 

### Credit Trading for Sources with Irregular NOx 

### Emissions

The following outlines theDepartment's concerns and methodology for dealing with 

### NOx compliance pursuantto §22a·174-22G), Regulations ofCOlU1ecticut State Agencies ("Regulations"), emission trading for 

### apeakers" and other sources that have peak emissions that



### are substantiallyhigherthan their average dailyemissions. Forpurposes ofthis protocol, peaking units are defi.ned as sources'with peak dailyNOx emissions greaterthan three times their average dailyemissions during the ozone season.

Thebasic concept ofthe trading program is that sources with 

### excess NOx emissions (arate that exceeds the rate limits in the Regulations) may obtain NOx emissionreduction credits ("ERCs") from sources thathave**~over-controlledn** theirNOx emissions. Although typical sources can obtain credits on amass basis (one tonofERCs to offset one ton ofexcess emissions) with an acceptable environmental outcome, sources with largevariations in emissions from day to day pose an additional problem for ozone attainment planning.

Themost common peakingunits or "peakers" are electricitygenerating units that run during times ofhigh electricity consumption. Electricitydemand is often thc highest during hot, humid days ofllie summer when the potential for ozone fomation is also high. Peakers frequently have high emission rates. To theextent that these units produce emissions at exactly the time when emissions need to be reduced to limit ozone fonnation, allowing peakers to continue to comply with new rate limits through the use ofERCs on aton-far-ton basis will exacerbate this effect. On the otherhand, ifit can be demonstrated that the ERCs being used bypeakers were generated

on acomparablebasis (i.e., during days ofbigh ozone potential), then ton-far-ton use bypeaken would be appropriate.

The full impact ofthe NOx emissions from these types offacilities during summer operation mustconsider temporal variability as well as mass ofexcess emissions. AnyERC trade must consider equivalencyto the NOx reductions that control equipment would produce on an ozone day on both atemporal and amass basis. 'Theprotocol belo'.v places appropriate requirements

on peaking units to reflect the greater impact ofNOx emitted under this type ofusage pattern. Attachment I**pr~vjdes** a detailed example ofthis issue.



### NOxEmissionsReduction Credit Use Computation ForPeakers

• Peaking units are onlyconsidered to be atemporal issue for the ozone season months.

• All excess NOx emissions during the winter (non-ozone'season) need onlybe offset by ERCs on amass basis.

• Prior to each ozone season there will be aprospective calculation to detennine how many tons ofERCs must be "on har."1d" during the ozone season. A retrospective calculation will detenninehow manyERCs were actually "used" during the ozone season.**(Pfhll~d** on Recyded**P~p~r)** 79 Ell!!. S:ree: • Har:lo;d, 

### cr 06106.5127 hu?:lIde?st.ue.l;t.llS

• .0\./1 EquQ./ OPPoTt:4r.irv Em"I",,,.

### 2

For ERe use during the ozone season:

1. Prospective calculation detelmines the numberofERCs that must be provided for the

ozone season. (Beginning in 

### 1996, the ERCs must be in place no later than May 1.)



### ERCs required for the ozone season shall be calculated based on: (a) amass basis (total anticipated excess NOx emissions overthe ozone"season) and (b) 

### apeak-day basis (maximum excess emissions for anydayduring theozone season). Sources will be required to provide credits equal to the greater ofthe amount calculated on amass or peak-daybasis. The timing ofactual credit provision 

### will be governed by the terms ofthe 

### specific trading orderissued forthat source.
(,) M,ss bosis: ERC, required will be equal to the total numberofton' ofanticipated

excess NOx emissions over the entire ozone season, calculated in the same
mannerused for other sources using ERCs (i.e., including any discounts).

(b) Peak (daily rate) basis: ERCs (in tons) required will be calculated bydividing one-third ofthe maximum daily excess emissions'" (in pounds) by 13 

### pounds/day/ton:

ERC, required (ton') [(MaximumEstimated Excess NOx in Ib,.) + 

### 3J + 

### [13 Ib,.Iday/tonJ

*Where maximum daily excess NOx emissions are the differencebetween the maximum estimated hours ofoperationperday at the full-Ioad-emission-rate and 95% ofthe allowable NOx emissions under Section 22a-174-22(e) ofthe Regulations.

2. Retrosoective calculation will determine the actual credit use and the ERC surplus, ifany. At the end ofthe ozone season, the calculations required 

### in item 1 above will be repeated using (a) the actual total excess emissions for the ozone season. and (b) the maximum actual excess NOx emissions on any ofthe days projected by the Commissioner to be "moderate to unhealthful", "unhealthful". or "veryunhealthful". Tne actual "ERCs required" 

### will be the greater ofthc ERCs calculated on the basis oftotal mass or maximum (peak) day. To the extent that the numberof ERCs used to offset peak day emissions exceed the total mass**~f** eXI?...5S NOx emissions for the ozone season. the

. remaining mass value ofsuch ERCs may be carried forward for use 

### in the winter (nonozone season). Any unused ERCs maybe carried forward until May 1. 1999, exceptas may be limited by the trading agreement and order, or byregulation.

### 3

Exhibit 1 ERe

### CalculatiollforPeaking Units



### Unless it 

### canbe demonstrated otherwise, ERCs are assumed to be created by

### relatively small daily reductions in NOx emissions over the course ofan entire ozone season (153 days). The 

### average daily 

### NOx emissions reduction represented by

### one ton ofcredit is 13 pounds/day calculated as follows:

(1 ton) x (2000 pounds/ton) • 153 days = 13 pounds/day!ton



### Tbus, an ERe 

### (ton) would be equivalentto areduction in NOx emissions of13 pounds/day.

EXA.Jlv1PLE. If

### a "peaking" sour.ce were to emit one ton ofexcess NOx perday when operating, butonly operates ror

### five days during theozone season, the oowner/operatorofthe source would nominallyneed to 

### obtain five tons ofERCs. However, those ERCs are likely to have been created by

### relatively small dailyreductions in 

### NOx emissions overthe course ofan entire ozone
season (153 days). In this example, assuming apurchase offive tons ofERCs, that calculates out to adailvNOx reduction ofapproximately 65 pounds.

(5 tons x 2000 pounds!ton) + 153 days 65 pounds/day


### Clearly, on anyday that the "pe2.king" unit operates, there is much more excess NOx emissions that will nothavebeen offset, on the orderof 1,935 pounds:
(1 

### ton x 2000 pounds/ton)

- (65 pounds credit) = 

### 1,935 pounds excess NOx emissions

While the total 2J.'11ountofNOxemitted wouldbe controlled on a seasonal average basis, on the "peaking" day there wouldbe apotentially significantincrease inNOx emitted, and thus an increase in potential ozone creation. In orderto achieve acommensuratereduction in 

### ozone creationpotential forpeakers, an adjustment in the calculation ofrequired ERCs is needed. One approach wouldbe to require ERCs in 

### aquantitythat would ensure thatthe daily average reduction represented by 

### those ERCs would equal the maximum daily excess NOx emissions from the peaking source on any day thatitran. On this basis, apeaking source 'kith 

### ama....umum 24-hourexcess NOx emission ofone ton would be required to**pur~hase** 

### 153 tons ofERCs.

1 (ton)!day X 153 days/season 153 tons



### This 153 tons ofERCs would be adequate to**~offset"** 

### excess emissions ofone tonperday for as many days as the source operated during aparticularozone season. This has beendeemed to be unduly stringent, given some diversityin operation ofthese sources. In light 

### ofthe foregoing, this requirementis adjusted downward bytwo-thirds.