# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

STATE OF CONNECTICUT AND CAPITOL DISTRICT ENERGY CENTER COGENERATION ASSOCIATES TRADING AGREEMENT AND ORDER NO. 8249 MODIFICATION NO.2

TRADING AGREEMENT AND ORDERMODIFICATION 

### In the matter ofaTrading Agreement and Orderbetween the CommissionerofEnvironmental Protection ("Commissioner") and Capitol DistrictEnergy CenterCogeneration Associates ("CDEC"). WHEREAS, the Commissionerand CDEC, having agreed to the terms and conditions set forth in Trading Agreement and OrderNo. 8249 issued on September29,2003, and a Modification thereto issued on April 11,2005, 

### do now, by mutual agreement, modify Trading Agreement and OrderNo. 8249 and supersede the earlier modification as follows: I. 

### Delete "EI Paso Corporation" in paragraph A.1. and substitute therefor "Maxim PowerCorporation". 2. Delete the date May I, 

### 2005, and substitute thereforMay 1,2009, 

### in paragraphs A.4. and C.1. 3. Delete paragraph C.2. and substitute the following therefor: DERC use. Starting on October 1,2004, and until May 1,2009, before the first day ofeach non-ozone season, CDEC shall have in its possession sufficient approved DERCs for the turbine based on the following:
a. During the non-ozone season: CDEC shall meet anon-ozone seasonal average emission limit of0.15 IbslMMBtu. Prior to October 1, 

### 2006, October 1, 

### 2007, and October 1,2008, CDEC shall estimate and acquire the amount ofDERCs or allowances required for such non-ozone season needed to comply with Section 22a-174- 22(e)(3) ofthe Regulations as follows:

( Printed on Recycled Paper) 79 Elm Street • Hartford. CT 06106 - :'i127 All Equal OPPOT//llliIY Em,,/oyerCapitol District Energy Center Cogeneration Associates 2 Trading Agreement and Order No. 8249 Modification NO.2 Estimated DERCs (tons)

# =[Estimated fuel use in MMBtu from October 1 through April 30 x (estimated seasonal average NOx emission rate in IbslMMBtu during October 1 through April 30

- (0.95 x 0.15 IbsIMMBtu))] -;- 2000 pounds/ton.
No later than May 31 of2007,2008, and 2009, when the turbine has a non-ozone seasonal average actual NOx emission rate exceeding 0.15 IbslMMBtu, CDEC shall calculate and permanently retire the amount ofDERCs used in the preceding non-ozone season as follows: Actual DERCs (tons) 

### = [Actual fuel use in MMBtu from October 1 through April 30 x (actual seasonal average NOx emission rate in Ibs/MMBtu during October 1 through April 30

- (0.95 x 0.15 Ibs/MMBtu))] -;- 2000 pounds/ton. b. When the non-ozone season CEM-recorded NOx emission rate is used to calculate DERCs used by the turbine, CDEC shall include missing data calculated in accordance with missing data substitution procedures under40 CPR Part 75.
c. CDEC shall not exceed any NOx permit limitations for the turbine. 4. Delete paragraph C.6. and substitute the following therefor: Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, CDEC may use NOx allowances, until May 1, 2009, for the turbine pursuant to Section 22a-174-22U) ofthe Regulations to achieve all or a portion ofthe 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 and/orrequirements applicable to DERCs contained in this Trading Agreement and Order;
a. In orderfor CDEC to use NOx allowances, CDEC shall create a general account oruse an existing compliance account oroverdraft account in EPA's NOx Allowance Tracking System ("NATS"); and 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 22a-174-22 ofthe 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

### Capitol District Energy Center Cogeneration Associates 3 

### Trading Agreement and Order No. 8249 Modification No.2 to the CT State NOx Retirement Account (Account ill 

### CT0000000300 in the NATS). 5. Delete paragraph C.7. and substitute the following therefor: DERC Shortfall. At aminimum, DERCs required shall be adjusted upwards by 100% ifDERCs are not in CDEC's possession for use priorto the first day of each non-ozone season. However, nothing in this Trading Agreement and Order shall affectthe Commissioner's authority to institute anyproceeding ortake any other action to require additional upward adjustment, based on the gravityofany alleged noncompliance orviolation oflaw. CDEC shall permanently retire the quantity ofDERCs equivalentto the excess emissions plus a 100% premium within (60) days ofCDEC's discovery ofthe DERC shortfall. CDEC shall certify and report any such DERC retirementto the Commissioner in accordance with paragraph C.26. ofthe Trading Agreement and Order. 6. Delete paragraph C.9. and substitute the following therefor: Extension. No laterthan May 1,2009 with respectto the turbine, CDEC shall complywith the requirements ofSection 22a-174-22(d)(2)(A) ofthe Regulations. There is no assurance thatthe Commissionerwill grant a written extension of this Trading Agreement and Order. 7. Delete paragraph C.IO. and substitute the following therefor: Future Compliance Report. On orbefore September I, 2008, CDEC shall submit areport in writing to the Commissioner, as directed in paragraph C.27. ofthis Trading Agreement and Order, indicatinghow the facility shall complywith Section 22a-174-22 ofthe Regulations with respectto the turbine on and after May I, 2009. 8. Delete paragraph C.13. and substitute the following therefor: Definitions. As used in this Trading Agreement and Order, "Approved DERCs" are those for which the Commissionerhas provided written authorization for use in compliance with Section 22a-174-22 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. 9. Delete paragraph C.14. and substitute the following therefor:Capitol District Energy Center Cogeneration Associates 4 Trading Agreement and Order No. 8249 Modification No.2 Dates. 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. The date ofsubmission to the Commissioner of any documentrequired bythis Trading Agreement and Order shall be the date s such document is received bythe Commissioner. The date ofany notice bythe Commissionerunderthis TradingAgreement and Order, including butnot limited to notice ofapproval ordisapproval ofany document or other 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 and Ordermeans calendarday. Any document or action which is required bythis Trading Agreement and Order to be submitted orperformedby adate which falls on a Saturday, Sundayor a Connecticutor federal holiday shall be submitted orperformedbythe next day which is not a Saturday, Sunday, or Connecticut or federal holiday. 10. Delete the word "individual" and substitute therefor the word "Section" in paragraph C.26. 11. Delete the name "Ms. Wendy Jacobs" from paragraph C.27. All otherterms and conditions ofTrading Agreement and Orderno. 8249 issued bythe Commissioner acting under Chapter446c, Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a177 ofthe Connecticut General Statutes shall remain in effect.,---------------------------------------------



### Capitol DistrictEnergyCenter Cogeneration Associates 5 

### Trading Agreement and Order No. 8249 Modification No.2
CDEC hereby consents to the entry ofthis modification to the Trading Agreement and Order without further notice. Capitol DistrictEnergy Center Cogeneration Associates Signature: Type Name: Type Title: Date: Michael E. Baier Plant Manager June 15, 2007



### amodification ofan Orderofthe CommissionerofEnvironmental Protection.

Date

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