### SIP DESCRIPTION

- Devon PowerLLC -Trading Agreement and Order No. 8181AModification 1 

### I. SIP

- DESCRIPTION OF DERC CREATION AND/OR USE SIP SUMMARY TABLE TradineAereement and OrderNo. 8181AModification 1 Devon Power 700 Naugatuck Devon

## cr06460 Avenue Identifier 

# IClient7741 Town#lQi Premise #H 

# ISequence # Contact Ms. Cynthia Karlic Tel: (860) 343-6962 Fax (860) 343-6969 Reg-ionalManager Pollutant and Regulatory Standard: 

### NOx 

# I Section 22a-174·22 oftheRegulations of ConnecticutState Agencies. NonattainmentArea Classification Serious Annual DERCs needed Estimated 5 ozone and Inon-ozone. ComplianceTime Period Until Apol30, 2007. Max. Emission Rate: full load emissionrate (FLER) forUse. (See Table Ibelow)

Table I NOxEmission Rates andAllowable Limits

. Unit Fuel 

### Ma.ximum Stack Test FLER .AJlowable Date pf Next PIR number Capacity (ppmvd) 

### IbsIMMBru Rate Stack Stack 

### MMBruIbr IbsIMMBru Test Test Due Turbine #2 oil 256 181.6 0.74 0.29 4/16/01 4116/06 Devon-lO R·26

II. SPECIAL REQUIREMENTS

a. This Trading Agreement and OrderModification supersedes Trading Agreement and OrderNp. 8181Aissued on April 22, 2003. b. Calculations ofcredits used shall be as specified in Trading Agreement and OrderNo. 8181A.

c. Devon PowerLLC shall acquire and permanently retire seven ozone season DERCs for every actual ton ofexcess NOx emitted from the peaking 

### lUlitduring the previous ozone seasonbased upon the actual emissions for each day that Connecticut one hour ozone levels were forecasted to be "moderate to unhealthful", «unhealthful", or "very unhealthful".

### Cf.b,~~ 

# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

STATE OF CONNECTICUT 

### AND DEVON POWER LLC TRADING AGREEMENT AND ORDER NO. 8181A MODIFICATION NO l

TRADING AGREEMENT AND ORDER MODIFICATION In the matter

# ofa Trading Agreement and Order between the CommissionerofEnvironmental 

### Protection ("Commissioner") andDevonPowerLLC ("DP"). WHEREAS, the Commissioner and DP, having agreed [0 the tenns and 

### conditions set forth in Trading Agreement and OrderNo. BI8lA signed by the Commissioneron Apri122, 2003, do now, 

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

### Reserved. 2. Delete the date May 1, 2005, and substitute thereforMay 1, 2007, In paragraphs A.6. and C.!. 3. Delete paragraph C.2.a. and substicute the following therefor: Until May 1,2007, before the first day ofeach month DP shall have in its possession sufficient approved DERCs for the cUlTent day for the peaking unit based on the following calculations; Before the first day ofeach month, DP shall estimate DERCs required for such month for the peaking unit as follows: (i) At all times: Estimated DERCs (in tons) use 

### = [«FLER 

### in IbslMMBw)

- (0.95 x NOx allowable fate in IbsiNIMBtu» x (estimated fuel use in MMBtu)] -:- 2000 pounds/ton

(Printed en Recycled r3per) 79 Elm Slleel •**~13rtrer(!.** CT 06106

- H27 hup:lfdcp.Sllle.ct.us ;1" £'I"al Opport""i'y EmployerDevon PowerLLC 

### 2 Trading Agreement and Order No. 

### BlBIA Modification No.1 No laterthan the twentieth day ofeach month, DP shall calculate and permanently retire DERCs used in the preceding calendar month, as follows: Actu.1 DERCs (in tons); [((FLER in IbsIMMBtu)

- (0.95 x NOx .1I0w.ble r.te in IbslMMBt\l» x (actLl.1 fLiel Lise in MJvfBtLl)] .,. 2000 pounds/ton Where:

• NOx allowable rate 

### = allowable limit rate in IbsIMMBtu shown in Table 

### 1 of this Trading Agreement and Order.

• FLER 

### = full load emission rate in Ibs/MtvlBtli as shown in Table 1 ofthis Trading Agreement and Order.

• Discount 

### (0.95)

## =5% design ffiDrgin applied to the allowable limitrate. ii) During the ozone season only: No later than December31 $(each year, DP shall acquire and permanently retire seven ozone season DERCs for every actual tOll ofexcess NOx emitted from the peaking unit during the previous ozone season based upon the acrup,! 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 }·hourstandard. Upon such revocation, DP shall calculate and permanently retire seven ozone season DERCs forevery actual ton ofexcess NOx emiued from the peaking unit during sllch ozone season based upon the actual emissions foreach day that Connecticuteight hour ozone levels were forecasted to be "unhealthy for sensitive groups", "unhealthy", or "very unhealthy". Where; Actu.1 ton ofexcess NOx emitted 

### = [((FLER in IbsIMMBtu)

- (0.95 x NOx allowable rate in IbslMMBtu)) x (.ctual fuel use in MMBtu») 2000 pounds/ton The total actual tons ofexcess NOx emittedfrom the peaking unit during forecasted ozone exceedance days shall be multiplied by seven and then rounded to the next greater whole ton, to detennine [he numberofDERCs [Q be permanently retired. This requirement is in addition to the DP's requirement to estimate excess emissions and subsequent permanent retirement ofasufficient number ofapproved DERCs in accordance with paragraph C.2.a.(i) ofthis Trading Agreement and Order. 4. Delete paragraph C.2.b. and substitute the following therefor:Devon Power LLC

Reserved. 

### 3 Trading Agreement and Order No. St81A Modification No. I

5. Delete paragraph C.2.c. and substitute the following therefor: During the non-ozone season: Until May 1, 2007, from October 1 through April 30, inclusive, each year, the peaking umt 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 of0.15Ib&1MBtu. Priorto October 1, 2004, October I, 2005 and October 1,2006, DP 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: EstimatedDERCs (tons) use 

### = [Estimated fuel use in M1v1Btu from October 1 through April 30 x (allowable emission rate in Ibs/MMBtu

- (0.95 x 0.15 IblMMBtu))] + 2000 Ibs/ton 6. Delete paragraph C.2.d. and substitute the following therefor: No later than May 310[2005,2006 and 2007, in addition to the DERCs retired pursuant to paragraph C.2.a. ofthis Trading Agreement and Order, DP shall calculate and permanently retire DERCs used in the preceding non-ozone season as follows: Actual DERCs (tons) used 

### = [Actual fuel use.in M1v1Btu from October 1 through April 30 x (allowable emission rate in IbsfMMBtu

- (0.95 x 0.15IbIMMBtu))] +.2000 Ibs/ton 7. Delete paragraph C.6. and substitute the following therefor: (a) Annual DERC Repon. No laterthan March 1 ofevery year afterissuance of this Trading Agreement and Order, DP shall submit in writing to the Commissioner, arecord ofeach sale orothertransfer ofDERCs for the previous calendaryear. DP shall also include actual NOx emissions from 

### the peaking unit and the amount ofall DERCs used (including serial numbers (if assigned) and DERCs purchased from otherfacihties). These reports shall be on fonns 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, DP shall submit in writing to the Commissioner the non-ozone season fuel consumption and amount ofallDevon PowerLLC 4 Trading Agreement and Order No. BIBIA Modification No. I DERCs used (including serial numbers (ifassigned) and approvedDERCs 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 fOlm 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, OP may use NOx allowances, until May I, 2007, for the peaking unit pursuant to Section 22a-I74-22(j) ofthe Regulations to achieve all or a portion ofthe reductions required by Section 22a-174-22 oftheRegulations. Any allowance used for compliance with Section 22a-174-22(e) ofthe Regulations shall 

### be subject to all restrictions and/or reqUirements applicable to DERCs contained in this Trading Agreement and Order;

a. In orderfor DP to use NOx allowances, DP shall create a general account oruse 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 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 genera! account in the NATS orthe facility's NOx compliance account in the NATS to the

# cr State NOx Retirement Account (Account ID CT0000000300 in the NATS). 9. Delete paragraph C.S. and substitute the following therefor: DERC Shortfall. At a minimum, DERCs required shall be adjusted upwards by 100% ifDERCs are not in DP's possession for use prior to the first day ofeach month or applicable season. However, nothing in this Trading Agreement and Ordershall affect the Commissioner's authority to institute any proceeding ortake any other action to require additional upward adjustment, based on the gravity of any alleged noncompliance or violation oflaw. DP shall permanently retire the quantity ofDERCs equivalent to the excess emissions pIllS a 100% premium within sixty (60) days ofDP's discovery oftheDERC shortfall. DP shaJi certify and report any such DERC retirement to the Commissioner in accordnnce with paragraph C.30. ofthis Trading Agreement and Order. 10. Delete paragraph CIO. and substitule the following therefor: FLER Exceednnce. Noncompliance with an established FLER shnll subject DP to

### Devon PowerLLC 5 Trading Agreement and Order No. 8181A Modification No. I make restitution by mntching the quantity ofemissions ("tme up") caused by the exceedance plus a 100% premium. The true up in tOns ofDERCs shall be equal to 

### the FLER ex;ceedance in IbsIMNIBtu, multiplied by the total heat input during the period ofnoncompliance divided by 2000 lbs/ton. 

### Ifthe period ofnoncompliance is not known, the time 

### period from the completion ofthe last/previous Commissionerwitnessed emission lest 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 ortake any otheraction to require additional upward adjustment, based on the gravity ofany alleged noncompliance orviolation oflaw. DP shall pennanently retire DERCs calculated in accordance with the above plus a 100% premium within sixty (60) days ofDP's discovery ofthe FLERexceedance. DP shall report any FLER exceedance to the Commissioner in accordance with paragraph C.30. ofthis Trading Agreement and Order. 11. Delete paragraph C.13. and substitute the following therefor: Extension. No laterthan May 1,2007, with respect to [he peaking unit, DP shall comply with the requirements ofSections 22a-174-22(d)(l) and 22a-174- 22(d)(2)(A) ofthe Regulations. There is no assurance that after full program review ofthis and otherTrading Agreements and Orders that the Commissioner will grant a written extension ofthis Trading Agreement and Order. 12. Delete paragraph C.14. 

### and substitute the following therefor: Future Compliance Report. On or before September 1, 2006, DP shall submit a report in writing to the Commissioner, as directed in paragraph C.31. ofthis Trading Agreement and Order, indicating how the facility shall comply with Section**22a~174-22** 

### ofthe Regulations with respect to the peaking unit on and after May 1, 2007. 13. Delete paragraph C.l7. and substitute the following therefor: Definitions. As used in this Trading Agreement and Order, "ApprovedDERCs" 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 1 through April 30 in any given calendar year; "Ozone season" means the period May 1 through September 30 in any given calendaryear. 14. Delete paragraph 

### C.18. and substitute the following therefor:Devon Power LLC 

### 6 Trading Agreement and Order No. B1BIA Modification No. I Dates. The date of"issuance" ofthis Trading Agreement and Order is the dare the Trading Agreement and Orderis deposited in the U.S. mail or personally delivered, whicheveris earlier. The date ofsubmission EO the Commissionerofany document required by thisTrading Agreement and Order shall be the date such document is received by the Commissioner. The date ofany notice by the Commissionerunderthis Trading Agreement and Order, including but not limited to notice ofapproval ordisapproval 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 and Ordermeans calendarday. Any document or action which is required by this Trading Agreement and Order to be submitted orperformed by 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, Sunday orConnecticutor federal holiday. 15. Delete the word "individual" and substitute therefore the word "Section" in paragraph C.30. 

### 16. Delete the name 

### "Mr. Michael L"Fleur" in paragraph C.31. All other terms and conditions ofTrading Agreement and Orderno. 818iA issued by the Commissioneracting under Chapter446c, Sections 22a-6, 22a-171, 22a·i74, 22a-176, and 22a· 177 ofthe Connecticllt General Statutes shat! remain in effect.

### Devon Power LLC 7 

### Trading Agreement and Order No. 8181A Modification No. I 

### DP herebyconsents to the entry ofthis modificarion to the Trading Agreement and Order without further notice. Devon PowerLLC Signature: Type Name: Type Title: 

### Date:

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Issued as amodification ofan Orderofthe CommissionerofEnvironmental Prolection.

Date

MAILED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED CertifiedDocument No. 7002 2030 0006 5643 0055