# STATE OF CONNECTICUT DEPARB'!ENT Of ENVIRON:\fENTAL PROTECTION

In the maner of The State ofConnecticut and I Stone Container Corpofation 

### ) ) ) 

### ) ) Trading Agreement and OrderNo. 8124 A

\Vhereas, the Commissioner ofEnvironmental Protection ("Commissioner") and Stone Container Corporation ("SeC") 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 (DERC) trading to reduce nitrogen oxide ("NOx") emissions 

### will achieve this result 

### in atimely and cost-effective marmer.



### ) 

## , A. At the request and with the agreement of

# sec, the Conunissioner finds the following: 1. This Trading Agreement a.11d Order 5upercedes Trading Agreement and Order 8124 issued on January 15, 2002. 2. 

# sec is a corporation that operates a paper mill facility at 125 Depot Road in Uncasville Connecticut ("Jacility"). 

### 3

.. At the facility, SCCoperates fuel burning equipment consisting ofa Riley dual-fired steam Boiler ("boiler") whicb is capable ofburning No.6 fuel oil or natural gas. 4. The boileris subject to' Section 22a-174-22, Regulations ofConnecticut State Agencies ("Regulations") penaining to the control ofNOx.

5. Official U.S. Environmental Protection Agency ("EPA") Reference Method 7E stack testingperfonned on September 12,2000 resulted in NOx emission rates set [onh in Table 1.

(?rio:ed 00 Recyded ?zper) 19 Elm**S~~:e:** • Htrlford, C1 06106.5127**h~:;J:1:c!9·S:ltc.c: .~s**  .""**£t;;1~1** Oppor:Wfll:)' Emplo)'crStone Container Corporation 2

Table I Trading Agreement and Order 8124 A

NOx Emission Rates and Allowable Limits (Ibsf:\-LlVIBtu) 

## I Boiler Fuel He:lI input Emission R2teS SC:lck**~e1:l** (MMBtulbr) Stack Test FUR AlloYl':l.ble Test Tost Limit Date Du, Riley No.6 fuel Oil 199.5 0.342 0.389 0.250 9/12/00 9/12/05 Natural Gas 

### I 

### . 99.5 0.055 0.086 0.200 

### I 9/12/00 9112105

6. When burning No.6 fuel oil, NOx emissions from the boiler exceed the allowable limit as specified in Table 22-1, Section 22a-174-22 ofthe Regulations. When bwning natura) gas, . Ox emissions from the boiler are below the allowable limit as specified 

### in Table 22-1, Section 22a-174-22 of the Regulations. 7. To reduce emissions SCC removed. the 

### airpreheater and installed a flue gas recirculation system, a low-NOx burner, and an economizer on the boiler 8. Pursuant to Section 22a-174-22(j) ofthe Regulations, 

## sec proposes to generate approved discrete emission reduction credits ("DERCs") while burning natural gas and using a portion ofthe DERCs while burning residual oil until April 30, 2007 in accordance with this Trading Agreement and Order. 9. 

# see proposes to use a full load emission rate ("FLER") identified in Table I for the purposes ofcalculating DERCs required.

10. When properly documented by SCC, and approved by the Commissioner, the reductions 

### in NOx emissions identified above, and as computed in accordance with the teIDls ofthis Trading Agreement and Order, will confonn to the requirements ofSection 22a-174-22G)(3) ofthe Regulations. Specifically, the reductions will be: Real because they result 

### in areduction ofactual emissions released into the air, net ofany consequential increase 

### in acrual emissions resulting from shifting demand. The emission reductions are properly measured, recorded and reported. Quantifiable because they are based on stack test data as applied in an appropriate reliable and replicable protocol, providing the rate and total mass amount ofreduction. Surolus because they are not required by any Connecticut starute or regulation mandated by a current State Implementation Plan ("SIP"). and

### Stone ContainerCorporation 3 

### Trading Agreement and Order 8124 .-Ie


### are not currently relied upon in any applicable attainment plan, any reasonable further progress plan or milestone demonstration. Permanent because the advanced control systems and installation capabilities are in place and operating, and an appropriate tracking system is in place to monitor all data required to verify and quantify the creation ofDERCs. Enforceable because the DERCs are approved by the Commissioner retrospectively afterthe submission by SCC ofthe seasonal or annual reports that will docwnent their creation.
II, The Commissionerin accordance with the provisions ofTrading Agreement and Order 8124, plh-suant to Section 22a-174-22 oftbe Regulations, approved the NOx DERCs referenced 

### in Table 2 ofthis Trading Agreement and Order. DERC creation serial nwnbers assigned by the Department to these previously approved reductions ofNOx emissions are provided in Table 2 ofthis Trading Agreement and Order. DERCs are subject to the vintage resmctions'ofthis Trading Agreement and Order. Dates afterwhich the unused DERCs will no longerbe eligible foruse as aresult ofthe vintage restrictions are provided in Table 2 ofthis Trading Agreement and Order. Table 2

### RC G PreYIOUs yAnnroved DE 

# , enerated Year of Ozone Season NOx Ozone Non-Ozone Season NOx Non-olone El:pir:ltion Generation DERC serial numbers Season DERC serial numbers Season Date DERCs DERCs 1995 O95/8124(DC)NOxoz1 -3 

### I 3 O95/8124IDC NOxnozl-6 6 12J31!04 1996 096/8I24(0 :'lNOxozl 

### I I 

### I CT96/8I24(DC NOxnozl-3 3 12131/04 

### I 1997 N/A I 0 CT97/8124(DC)NOxnoz1 1 

### I 12131104 1998 CT98/8124(DC)NOxozl 

### I 1 CT9S/8124(DC)NOxnoz1-3 3 

### I 12/31/04 1999 CT99/8124(DC NOxoz1 

### I 1 CT99/8I24(DC)NOxnoz1-6 

### I 6 12/31/04 2000 CTOO/8124(DC)NOxozl 1 CTOO/8124(DC NOxnoz1 

### I 1 I 12131/05



### B. The Commissioner, in accordance with the provisions ofthis Trading Agreement and Order, pursuant to Section 22a-174-22U) ofthe Regulations, hereby allows SCC to: 1. Complywith Section 22a-174·22 ofthe Regulations through use ofDERC trading; 3.11d



## .--,- 2. 

### Upon sufficient documentation as described on this Trading Agreement and Order, generate additional DERC, Upon issuance ofan addendum to tl-:1is TradingAgreement and Orderthe Commissionermay approve the generation ofadditional DERCs by SCC retrospectively. ApprovedStone Container Corporation 

# , Trading Agreement and Order 8124 A



# . . '.........' DERCs generated by SCC may be held by SCC or transferred to other persons in accordance with this Trading Agreement and Order. 

# e. With the agreement of

# sec, the Commissioner, acting under Sections 22a·6, 

### 22a171, 22a-174, 22a-176, and 22a-177 ofthe Connecticut General Statutes, orders SCC as follows: 1. Upon issuance,ofthis Trading Agreement and Order

# sec may generate approved DERCs 

### as allowed under this Trading Agreement and Order 

### until April 30, 2007; and 2. Upon issuance ofthis Trading Agreement and Order, at the iacility. 

# sce shall comply with Section 22a-174-22 oftbe Regulations through emission reduction trading. Until SCC achieves pennanent compliance with the emission standard in Section 22a·l74·22(e) ofthe Regulations orbyApril 30,2007 which ever occurs earlier:

a. 

# sce shall use approved DERCs as required under this Trading Agreement and Order, and b. SCC shall have in its possession sufficient approved DERCs to meet applicable NOx emission limits as allowed under this Trading Agreement and Order.

c. SCC shall complyduiing operation oftheboilerwith the FLERS shown in Table 1 oithis Trading Agreement and Order.

3. DERC Generation.

a. Upjt May 1,-2007, when operating the boiler on narural gas, 

# sec maycalculate the amount ofDERCs generated, as follows: DERCs (tons) generated = (Actual Fuel Use in MMBtu) x {(allowable limit)

- (FLER)} x (0.70)' +2000 Ibs/ton. Where:

• Allowable limit= in IbslMMBtu as shown in table 1 ofthis

Trading Agreement. and Order.

• FLER= full load emission rate in IbsIM.1v!Bru as shown in

table 1 ofthis Trading Agreement and Order. Forthe purposes ofdetermining the number ofDERCs generatedStone Container Corporation 5 Trading Agreement and Order 8124 A



## ..... '-.,,:;1'

J 'oJ SCC shall discount DERCs as follows:

I. Ten (10) percent ofthe DERCs generated by the facility will be pennanently removed from all calculations to assure a benefit to the environment. ii. Twenty (20) percent ofthe DERCs generated will be**p~nnanently** removed from all calculations for uncertainties.



# , 4. 

### In requesting DERC approval, SCC shall provide docwnentation containing monthly operating reports ofactual fuel usage and DERCs generated net ofthe thirty (30) percent discount. 5. DERC Use. Until April 30, 2007, before the first day ofeach month SSC shall have in its possession sufficient approved DERCs for such month based on the following calculation.

a. Before the first day ofeach month, calculate projected DERCs required for the next calendarmonth for the boiler as follows: DERCs (tons) (Estimated Fuel Use 

### in MMBtu) x {(FLER)

- (0.95 x NOx allowable limit» +2000 Ibs/ton.
b. No laterthan the twentieth day ofeach month, calculate DERCs used in the preceding calendarmonth for the boiler as follows: DERCs (tons) (Actual Fuel Use 

### in MMBtu) x {(FLER)

- (0.95) x (allowable limit) +2000 Ibs/ton. 6. SCC shall make and keep records of: daily fuel use and fuel type; excess NOx emissions; and the number ofDERCs 

### iri its possession, created,

.purchased and used (by serial'numberifassigned) each month in accordance with the appropriate emission rates and limits in this Trading Agreement and Order; the nwnber ofDERCs used during the ozone season and non-ozone season (the remainder ofthe year); 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. SCC shall maintain and submit such records to the Commissioner in accordance with section 22a174-22 ofthe Regulations. 7. Record KeepinQ. 

# sce .shall**~etain** records and supporting documentation as described in this Trading Agreement and Order for aminimum offi-i.:e years, commencing on the date such records were created. 

# sec shall

### Stone ContainerCorporation 6 

### Trading Agreement and Order8124 A**,~** 

### J

.J**.~** 

### provide the records specified above to the Commissionerwilhin [hirry (30) days ofreceipt ofa written request from the Commissioner. 8. .A..nnual Emission Statement. No laterthan March 1 ofevery year after issuance ofthis Trading Agreement and Order, SCC shall include with the Annual Emission Statementprovided to the Conunissioner. arecord ofeach sale or othertransfer, and use ofany and all ofthe DERCs approved**wi~n** 

### and subsequent to issuance ofthis Trading Agreement and Orderuntil all such DERCs have been used or are no longerin sec's possession. sec shall also include actual NOx emissions from the boiler and the amount ofall DERCs used (including serial numbers (ifassigned) and approved DERCs generated and/orpurchased from other facilities). generated and/or approved for the previous calendar year. These rep0rls shall be on a fonn prescribed by the Commissioner and shall be in monthly increments. Should

# see choose to discontinue the generation of DERCs, SCC will notifythe Commissionerupon discontinuance. 9, Allowance Use. Pur.;uantto Section na-174-22(d)(3) ofthe Regulations, SCC may use NOx allowances, through April 30, 2007, pur.;uanl to
. Subsection 

### Cj) ofSection 22a-174-22 ofthe Regulations to achieve all or aportion ofthe reductions required by Section 2220-174-22 ofthe Regulations. Any allowance used for compliance with Section 12a-174- 22(e) oftheRegulations shall be subject to all restrictions a.fJ.d/or requirements applicable to DERCs contained in this Trading Agreement and Order;

a. In 

### orderfor SCC to use NOx allowances, SCC shall create a general**~ccount** 

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

. b. Each allowance used for compliance with Section 2120-174-22 of the Regulations shall be equivalent to one DERe. Allowances shall be considered used forcompliance 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 

### CT0000000300 in the NATS). 10. DERC Doubling. At aminimum, DERCs required shall be adjusted upwards by 100% ifDERCs are not in SCC's possession priorto the firs! day ofeach month. However, based on the gravity ofthe noncompliance. the Commissionermay require additional upward adjustment II. FLER Exceedance. Noncompliance with an established FLER shall subject sec to make restitution by matching the quantity ofemissions ("nue up") caused by the exceedance plus a 100% premium. The rrue up in tons ofDERCs shall be equal to the FLER exceedance in IbsIMMBru,Stone Container Corporation 7 Trading Agreement and OrderS 114 A multiplied bythe total heat input during the period ofnoncompliance divided by 2000 Ibs!ton. Ifthe period ofnoncompliance 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 Commissioner's authority to institute anyproceeding ortake any other action to require additional upward adjustment, based on the gravity of any allegednoncompliance or violation oflaw. 12. FLERModification. The FLER's set forth in Table I ofthis Trading Agreement and Ordermay be modified only after the consent ofthe Commissionerby written modification ofthis Trading Agreement and Order. 13. Emissions Testing. Pursuant to Section 22a-174-22(k) ofthe Regulations;- SCC shall conduct NOx emission tests ofthe boiler at least once every five years commencing from the dates ofthe NOx emission tests for the boiler as provided in Table I ofthis Trading Agreement and Order. 14. Vinta2e Resniction. Forthe purposes ofcompliance with Section 22a-174-22 ofthe Regulations, DERCslallowances shall onlyremain valid for five (5) calendaryears from the year ofthe generation/allocation ofsuch DERCs/allowances. DERCs/alJowances generated/allocated more than five (5) calendar years ago are not valid for use for compliance with Section 22a174-22 ofthe Regulations. Notwithstanding the above the DERCsiailowances generated/allocatedpriorto calendaryear 2000 shall be valid for use until December 31,2004. 15. Extension. No laterthan April 30, 2007, with respect to the boiler,SeC shall comply with the requirements ofSection 22a-174-22(d)(I) ofthe Regulations. However, after full program review ofthis and otherTrading Agreements and Orders and, ifdetennined to be appropriate, the Commissionermay grant a wrinen extension ofthis Trading Agreement'and Order. 16. Future Comoliance Reoort. On orbefore September 1,2006, SCC shall submit arepon indicating how the facility shall comply with section 22a-174- 22 ofthe Regulations with respect to the Boileron and after May I, 2007. 17. FuII comoliance. SCC shall notbe considered in full compliance with this Trading Agreement and Orderuntil all actions required by this Trading Agreement and Orderhave been completed as approved and to the Commissioner's satisfaction. 18. Aoorovals. SCC shall use best effons to submit to the Commissioner all documents.required by this Trading Agreement and Order in a complete and approvable form. Ifthe Commissionernotifies SCC that 

### "any document orStone Container Corporation 

## s Trading Agreement and Order 8124 A

I .J other action is deficient, and does not approve it with conditions or modifications, it is deemed disapproved, and SCC shall correct the deficiencies and resubmit it within the time specified by the Commissioner or, ifno time is specified by the Commissioner, within 30 days ofthe Commissioner's notice ofdeficiencies. In approving any document or other action under this Trading Agreement and Order, the Commissionermay approve the document or other action as submined orperformed or with such conditions or modifications as the Commissioner deems necessaryto carry out the purposes'ofthis Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance or delay. 19. 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 Commissioner or arepresentative of the Commissioner; "Ozone season" means the period from May 1 through September 30 

### in any given calendar year. The date of"issuance" ofthis Trading Agreement and Orderis the date the Trading Agreement :!Dd Order is deposited in the U.S. mail or personally delivered, whichever is earli"er. 20. Dates. The date ofsubmission to the Commissioner ofany document required by this Trading Agreement and Order shall be the date such document is received bythe Commissioner. The date ofanynotice by the Commissioner under Trading Agreement and Order, including but not limited to notice of approval or disapproval 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 calendar day. Anydocument or action which is required by this Trading Agreement and Orderto be submitted orperformed by a date which falls on a Saturday, Sundayor a Connecticut or federal holiday shall be submined orperformed by the next day which is not a Saturday, Sundayor Connecticut orfederal holiday. 21. Certification ofdocuments. Any document, including but not limited to any notice, which is required to be submitted to the Commissionerunder this Trading Agreement and Order shall be signed by

# see or, if

# see is not an individual, bySCC's chiefexecutive officer or a duly authorized

. representative ofsuch officer, as those terms are defined in Section 21a-430- 3(b)(2) ofthe Regulations ofConnecticut State Agencies, and by the individual(s) responsible for actually preparing such document, and 

## sec or SCC's chiefexecutive officer and each such individual shall cenify in \","riting as follows:



### "I have personally examined and am familiar with the information submitted in this documenl and ail anaclunents Iherelo, and I cenify, based onStone Container Corporation 9 Trading Agreement and Order 8124 A



# ....

# ) '::.

# ..:

. reasonable investigation, including my inquiry ofthose individuals responsible for obtaining the information, that the submined information is true, accurate and complete to the best ofmyknowledge and belief. I understand that any false statement made in the submitted information is punishable as a criminal offense under Section 53a-157b ofthe Connecticut General Statutes and any other applicable Jaw." 22. Noncompliance. This TradingAgreement and Orderis a final order ofthe Commissionerwith respect to the maners addressed herein, and is nonappealable and immediately enforceable. Failure to comply with this Trading Agreement and Ordermay subject sec to an injunction and penalties. 23. False statements. Any false statement 

### in anyinfonnation submitted pursuant to this Trading Agreement and Orderis punishable as acriminal offense under Section 53a-157b ofthe COIUlecticut General Statutes and any other applicable law. 24. Notice oftransfer. liabilirv ofSCc. Until SCC has 

### fully complied With this Trading Agreement and Order, SCC shall notify the Commissioner in writing no later than 15 days after transfening all or anyportion ofthe facility, the operations, the site orthe business which is the subject ofthis Trading Agreement and Order or after obtaining a new mailing or location address. sec's obligations Wlder this Trading Agreement and Order shall not be affected by the passage oftitle to anyproperty to any otherperson or municipality. 25. Commissioner's powers. Nothing in this Trading Agreement and Order shall affect the Commis·sioner'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**~y** time the Commissioner determines that the actions taken by

# see pursuant to this Trading Agreement and Orderhave not successfullycorrected all violations, fully characterized the extent or degree ofanypollution, or successfully abated orprevented pollution, the Commissionermay institute anyproceeding to require sec to undertake further investigation or further action to prevent or abate violations or pollution.

. 

### 26. SCC's oblie:ations under law. Nothing in this Trading Agreement and Order shall relieve sec ofother obligations under applicable federal, state and local law. 27. No assurance bv Com..-nissioner. No provision ofthis Trading Agreement and Order and no action orinaction by the Corrunissioner shall be construed to constitute an assurance by the CommiSSionerthat the actions taken by secStone Container Corporation 10 Trading Agreement 2nd Order 8124 A



# ''J

V' -.J pursuant to ihis Trading Agreement and Order will result in compliance or prevent or abate pollution. 28. Access to facilitv. Anyrepresentative ofthe Department ofEnvironmental Protection may enterthe facility v.rithoutprior notice for the purposes of monitoring and enforcing the actions required or allowed by this Trading Agreement and Order. I 29. No effect on"fil2':hts ofotherpersons. This Trading Agreement and Order neither creates nor affects any rights ofpersons or municipalities that are not parties to this Trading Agreement and Order. 30. No Creation QfPropertvRi!lhts. This Trading Agreement and Order does not create anypropertyrights wiLl} respect to these DERCs. 31. Notice to Commissioner ofchanS:!es. Within 15 days ofthe date

## sce becomes aware ofa change in any information submitted to the Commissioner under this Trading Agreement and Order, orthat any such information was inaccurate ormisleading orthat anyrelevant information was omined, 

## sec shall submit the correct oromitted infonnation to the Commissioner. 32. Notification ofnoncoffioliance. In the"event that

# sec becomes aware that it did not ormay not comply, or did not or may not comply on time, with any requirement ofthis Trading Agreement and Order or ofany document required hereunder, 

# sec shall immediatelynotify by telephone the individual identified in the next paragraph and shall take all reasonable steps to ensure that anynoncompliance or delay is avoided or, ifunavoidable, is minimized to the greatest extentppssible. Within five (5) days ofthe 

### initial notice, 

## see shall submit in'writing the date, time, and duration ofthe noncompliance and the reasons for the noncompliance or delay and propose, for the review and written approval ofthe Commissioner, dates by which compliance will be achieved, and SCC shall comply with any dates which maybe approved in writing by the Commissioner. Notification by SCC shall not excuse noncompliance or delay, and the Commissioner's approval ofany compliance dates proposed shall not excuse noncompliance or"delayunless specifically so stated by the Commissionerin writing.Stone Container Corporation 11 Trading Agreement and Order 8124 A



# ,

..J 33. Submission ofdocuments. Any document required to be submitted to the Commissionerunder this Trading Agreement and Order shall, unless otherwise specified 

### in this Trading Agreement and Order orin VvTiting 

### by the Commissioner, be directed to: 

### Mr. Michael lafleur Deparnnent ofEnvironmental Protection Bureau of

### AirManagement Compliance and Field Operations Division Emissions and Credit Trading Section 79 Elm Street Hanford, Connecticut 06106

### Stone Container Corporation 12 

### Trading Agreement and Order 8114 A 

### SCC consents to the issuance ofthis TradingAgreement and Orderwithout funher notice. The undersigned certifies that he/she is fully authorized to enter into this Trading Agreement and Order and to legally bind SCC to the terms and conditions ofthe 

### Trading Agreement and Order.
Stone Container Corporation. Signature:

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