### ~~~ Exhibit 3 

# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION**'-"-~'/** In 

### the matterof The State ofConnecticut a.."1d Allegheny Ludlum Corporation 

# l l ) Trading Agreement and Order No. 8188



### Whereas, the Commissioner ofEnvironmental Protection ("Commissioner") and Allegheny Ludlum Corporation ("ALe") 

### agree that 

### it is in Lbepublic mterest that they work cooperatively to improve the air quality within the StateofConnecticut and that the use ofdiscrete emissions reduction credit ("DERC'') trading to reduce nitrogen oxide (''NOx'') emissions will achieve 

### this result in atimely and cost·effective manner: A. With the agreement ofALe, the Commissioner finds the following: 

### 1. Allegheny Ludlum Corporation**o~ns** 

### and o'perates a specialty steel processing facility in Wallingford, Connecticut, ("facilIty"). 2. At the facility, 

### ALe operates three (3) boilers os. 1,2 and 3 (''boilers'') which 

### burn #2 fuel oil ("#2 oil') andnatural gas; and one (1) 

### process mixed aCId pickle tub ("mixed acid tub scrubbers'') which produces NOx emissions and these units are subject to Section 22a-174-22 oithe Regulations ofConnecticut State 

### Agencies ("Regulations''). Prior to April I, 2000, 

## ALe burned #6 fuel oil ("#6 oil'') in the 

### boilers on occasion. 3. Section 22a-174-22(k) bftheRegulations requires that an o'WIIeror operator subject to an emission limitatlOD under Section 22a-174-22 ofthe Regulations conduct an emission testto demonstrate compliance no later than May 31,1995. 

## ALe did not conduct DEP witnessed emission testing ofthe mixed acid tub and the boilers until December 1998. 4. By virtue ofthe above 

### ALe violated Section 22a-174-22(1<) ofthe Regulations. 5. The Dep3.J.-tment ofEnvironmental Protection ("DEP") v.'itnessed emission test of the representative boilerNo.2, conducted December 18 through 21, 1998, shows that the representative NOx emission rate for boilers Nos. 1,2, and 3 when operating on # 6 oil, was 0.3711bsIMMBtlJ, which is above the Section 22a·174·22 ofthe Regulations allowable emission rate of0.25 IbslNlMBtu for the boilers. 6. The first DEP witnessed emission test ofthe mixed acid tub scrubbers Nos. I and 2, conducted December 30, 1998, shows the combined weighted average 

### iOX emission rate was 895 ppm, which is above the Section 22a-174-22 ofthe Regulations allowable emission rate of700 ppmvd for process emissions. 7. A second DEP witnessed emission test ofthe mixed acid tub scrubbers Nos. 1 and 2, performed 011 May 18, 2000, shows that the combined weighted average NOx emission rate was 877.5 ppmvd, which is above the Section**22a·174~22** ofthe Regulations allowable emIssion rate of700 ppmvd. 8. 

### .By virtue 

### oftne above, 

### ALe violated Section 22a·j 74-22 (e) ofthe Regulations.

# lnitials~V

# z,i ( ?rinted on Reeyeled ?,per) 79 Elm S,ree, • Hlrtford. CT 06106·5127 IlllrVIdep.s'2le.et.U s An Equal Opporlllnily**Emp/a~u** Date:



# -Alle2:henv Ludlum Corooration Trading Agreement and Order No. 8188 

### 9.

to.

11.

12.
13.

14.

15.



### 16.

17.


### 18. During theperiod June 1, 1995 through March 31, 2000, ALC's excess NOx emissions from boilers Nos. 1,2. and 3 are estimated to total 17.29 tons (0 tons ozone and 17.29 tons non-ozone). During the period June 1,1995 through October 31, 2000 ALC's excess NOx emissions from the mixed acid tub scrubbers No.1 and No.2 are estimated to total 37.89 tons (19.59 tons ozone and 18.30 tons non-ozone). Pursuant to Section 22a-174-22 ofthe Regulations, ALC proposes to enter into a Trading Agreement and Orderto comply with: 1) the allowable NOx emission rates in Table 22-1 for boilers Nos. 1,2, and 3, when burning #6 oil; and, 2) the allowable NOx emissions limits set 

### forth in Section**22a~174~22(e)(2)(G)** ofthe Regulations when operating the mixed acid tub scrubbers Nos. 

### I and 

### 2. ALe has converted the system so that #2 oil will fuel boilers Nos. 1,2, and 3, and #6 oil will no longerbe burned in boilers Nos. 1,2, and 

### 3. On April 1, 2000, ALC discontinued burni..1.g #6 oil in boilers Nos. 1,2, and 3 to complywith the emissions limits in Section 22a-174-22(e) ofthe Regulations until a Tradmg Agreement and Order could be established for their facility. Pursuant to Section 22a-174-220) ofthe Regulations, 

### ALe acquired and used approved DERCs monthly, as specified in Section C. ofthis Trading Agreement and Orderto compensate for the excess NOx emissions from June I, 1995 until March 31, 2000 for the boilers and from June I, 1995 until October 31, 2000 for the mixed acid tub scrubbers. Section 22a-174.22(j) ofthe Regulations allows the o-wner or operator ofa source to use emission reduction trading to offset excess NOx emissions. Such reductions shall be, at a minimum, equivalent to those emission reductions that would be achieved by complying With all applicable emissions limitations in Section 22a174-22 ofthe Regulations. A third DEP witnessed emission test perfom1ed on November 2 and 3, 2000 ofthe mixed acid tub scrubbers Nos. 1 and 2, shows that the combined weighted average NOx emission rate for the mixed acid tub scrubbers Nos. 1 a...id 2 is 396 pprnvd which meets the 700 pprnvd allowable emission rate set forth in Section 22a-174- 22(e) ofthe Regulations. On October 31, 2000, ALC obtained a total of 117 tons (43 tons ozone and 74 tons non-ozone) ofapproved DERCs. On October 31, 2000, in accordance with the requirements contained 

### in paragraph C.I ofthis Trading Agreement and Order, ALC retired a total of 110.36 tons of approved DERCs, including a 100% premium to compensate for the excess emissions ofNOx that were emitted for the period from June I, 1995 throngI1 October 31, 2000, as follows:

a. ForboilerNos. 1,2, and 3: 17.29 tons ofnon·ozone season DERCs. b. Formixed acid tub scrubbers: 19.59 tons ofozone and 18.30 tons ofnonozone season DERCs.

c. For having insufficient DERCs on hand prior to use for boiler Nos. 1,2, and 3 and the mixed acid tub scrubbers: 19.59 tons ofozone season DERCs and 35.59 tons**ofnon~ozone** season DERCs. 

# 0_£
Initials: 

## V**C~** 2

### AlIee:henyLudlum Corooration 

### Trwin.**A~eement** 

### and OrderNo. 8188

20. 19. For boilers Nos. 1

..2, and 3, prior to burning #2 oil, on March 15,2001, ALC received an approved pennitmodification to bum #2 oil in boilers Nos. 1,2, 

### and 3. By**agreein~** 

### to the issuance ofthis Trading Agreement and Order, ALe 

### does not admit that tmdings A.3. through A.IO. 

### are correct. B. The Commissioner, in accordal1ce

### with theprovisions ofthis trading agreement and order, 

### pursuantto Section 22a-174-22(d)(3) ofthe Regulations, hereby allows ALC to complywith Section 22a-174-22(d)(J) ofthe Regulations through use ofDERC trading. C. With the agreement ofALe, the Conunissioner, acting under Connecticut General Statutes 

### Sections 22a-6, 22a-17I, 22a-174, 22a-176, and 22a-I77, orders ALC as follows:

I. 

### RetrospectiveNOx Emissions ReJatin2' to emissions on orbefore October31, 2000, 

### ALC shall obtain and retire a 

### total of 110.36 tons ofapproved DERCs, including a 100% premi;nn to**compensat~** 

### for the excess emISSIOns 

### of

### NOx that were ermtted for the penod tram June I, 199) 

### through October 31, 

### 2000, as follows:
a. Forboibr Nos. I, 

### 2, and 3: 17.29 

### tons ofnon-ozone season DERCs. b. Formixed acid tub scrubbers: 19.59 

### tons ofozone and 18.30 

### tons ofnonozone season DERCs.
c. Forhaving insufficient DERCs on hand prior to use for boilerNos. I, 

### 2. and 3and themixed acid tub scrubbers: 19.59 

### tons ofozone season DERCs and 35.59 

### tons 

### ofnon-ozone season DERCs. d. -Retrospective excess NOx emissions above shall be calculated as follows: 

### (al Boilers Nos.!. 2. and 3 (#6 Qil) 

### DERCs Boiler Nos. 1,2. 

### and 3 total (actual) monthly excess NOx emissions 

### (tons/mo.) = 

### {[(totalmonthly#6 oil heatinput) x ((oil full load emission rate (UFLER") of0.371IbslMMBtu)

- (0.9) designmargin x 0.250 IbslMMBtu NOx allowable limit))]}+2000pounds/ton (b) 

### Mixed Acid Tub Scrubbers Nos. 1 and 2 DERCs (i) For oeriod June 1, 

### 1995 Lirouw ADri130. 2000 Mixed acid tub scrubbers Nos. I and 2 (Actual) DERCs (tons) {[((895 mixed acid tub FLER in ppmvd) (0.95 design margin x 700 ppmvd))/895 ppmvdj·x [(8.575 poundsl'nour) x (total actual daily operating hours)jj) + 2000 pounds/ton

. 

### (ii) ForDeriodMav I. 2000 throu.h October 31. 2000 Mixed acid tub scrubbers Nos. 1 and 2 (Actual) DERCs (tons) = 

### {[((925 mixed acid tub FLER in ppmvdl (0.95 design margin x 700 ppmvd»)/925 ppmvdj x [(19.4 poundslhour) x (total actual daily operating hours)]} + 2000 pounds/ton 2. On October 31. 2000. as documented in spreadsheets showing excess NOx 

### emissions and DERCs retired, and DERC Sales Agreements signed byALC (hereby

. . -=-ringorporated into this Trading Agreement and Oider as Attachments I 

### and 2), the 

### ImbaIs: 

## y

# c...!( 3 Date: 

# s-/l.;/G;J-AlleghenvLudlum Coruoration Tradiu!2: Acreement and Order No. 8188
terms and conditions ofParawaph 

## c.1. (a), (b) (c) and (d) were met as described in Paragraphs A.17 and A.l8 ot thIS Trading Agreement and Order. 3. Future Emissions for the mixed acid tub scrubbers Nos. 1 and 2:

a. ALC shall maintain a minimum exhaust flow rate for each mixed acid tub scrubber of1800 dscfrn except during periods ofstartup, shutdown or malfunction. b. Within sixty (60) days ofthe issuance ofthis Trading Agreement and Order, ALe shall install and operate an exhaust flow monitor, warning device and a data-recording device, acceptable to the Commissioner, on each ofthe two mixed acid tub scrubbers. The datarecording device shall record and store the differential pressure datarepresentative ofthe exhaust gas flow rate ofeach mixed acid tub scrubber. ALC shall operate and maintain flow-monitoring equipment at all times during operation ofthe mixed acid tub scrubbers. Data shall be stored continuously for a minimum ofsix (6) months. The recordins: device will capture data for at least 95 percent ofthe operating time. A warmng device shall be installed to alert the operator to take corrective action ifthe exhaust flow rate for a mixed acid tub scrubber falls below 1800 dscfin during nonnal operation.

c. Records ofthe exhaust flow rate and corrective action activities shall be maintained at the facility for a.minimum period ofsix (6) months. d. Emissions testing: In lieu ofinstalling continuous 'emi?sions monitoring (OEM) on the mixed acid tub scrubbers, 

### ALe shall conduct emissions testin.§? on the mixed acid tub scrubbers.' Withi.TI sixty (60) days ofthe issuance ofthIS**Tradin~ Agre.en~ent**  and**O~der, ~LC**  shall**~ubmit** a NOx Emission Testing pJaLl**to.~e** l,..;OmmISSlOner for h1S revIew and wntten approval. Such plan shall, at a mInImum: 1) Provide for emissions testing each calendar year commencing in the year 2002; 2) Be designed to demonstrate compliance with the allowable emission rate limit of700 ppmvd for appropriate processes in Section 222-174-22 ofthe Regulations; and

e. After two (2) consecutive years ofdemonstrating compliance with the allo\vable emission rate limit of700 ppmvd for. appropriate processes in Section 22a-174-22 ofthe Regulations, ALC may submitin writing, for the Commissioner's review and written approval, a request to allow ALC to return to a longer emissions testing period not to exceed every five (5) years, with such time period commencing from the date ofthe last emisslOn test. 4. Emission Testing Protocol for the mixed acid tub scrubbers Nos. 1 and 2.

a. ALC shall submit to the Commissioner for his review and \""ritten approval an Tntent-To-Test ("ITT'? protocol not less than thirty (30) days prior to the emissions testing reqUIred pursuaI).t to paragraph C.3.d. and C.3.e. afthis Trading Agreement and Order. The ITT protocol shall include at least: 1) The Department ofEnvironrnental Protection's Bureau ofAir Management Test Fom1 No.1, "Intent to Test";

4

### AlleQ:henvLudlum Corooration TradingAQIeement and Order No. 8188

b. 

### 2) System operatingparameters indicative ofproper operation, including, but not limitedto the mixed acid tub steel throughp'ut and, for each nUxed 

### acid tub scrubber, the exhaust gas flow rate and 

### NOx emissions rate in ppmvdand Ibslhr. The ITT protocol shall provide thatALC shall perform testing as specified in Sections 22a-174-5 and 22a-174-22 ofthe Regulations, including operating the mixed 

### acid tub process at not less than 

### ninetypercent (90%) 

### ofits maximum rated or pemlitted, whichever is less, capacity.

e. d. 

### c.

5. ALC shall perform all testing required byparagraph C.3.d and C.3.e in accordance with the approved 

### ITTprotocol. In conducting andperforming the testing required byparagraph C.3.d and C.3.e, and 

### in analyzmg the 

### results ofsuch testing, ALC shall adhere to methods specified in Sections 22a-174-5 

### a:.,d 22a-174-22 of

### the Regulations and as 

### approved bythe United States Environmental Protection Agency ("EPA'') 

### and the Commissioner. ALC shall schedule all emissions testing so as 

### to 'allow the Commissionerto be present during such testing and to independentlyverify facility operations, air pollution control equipmentparameters, and testing procedures. Within sixty (60) 

### days aftercompleting any emissions testing**~equired** 

### by this**Trad.in~** 

### Agreement and Order, ALC shall submitto the Commissioner 

### a written report providmg the results ofsuch testing. Within thirty (30) days ofanotice from the 

### Commissioner indicating any deficiencies in the emissions testing report, ALe shall submit arevised report.

a.



# o.

c. 

### ALC shall document and record monthly totals ofsteel throughput in tons, process hours ofoperation, and NOx emissions maccordance with the emission rates a..,d limits set forth"in Section22a-174-22 (e) ofthe Regulations. Such records sball be maintained and provided to the Commissioner in accordance with Section 22a174-4(c)(I) ofthe Regulations. ALC shall retain records and supporting documentationas described in this Trading Agreement a..,d Order for aminimum offive (5) years, commencing on the date such records were created

.

. -\LC shall provide the records specified above to the Commissioner within thirty 

### (30) days ofreceipt ofawritten request from the Commissioner

.. 6. Full comoliance. ALC shall not be considered in full compliance witb this Trading**Agre~ment** 

### and Order**un~il** 

### all actions required bythis Trading Agreement and Order have been completed as approved and to the Commissioner's satisfaction. 7. Aoprovals. ALe shall use bestefforts to submit to the Commissioner all doclUDents required bythis Trading Agreement and Order in acomplete 2nd approvable form. Ifthe Commissioner notifies Ale that any document orother action is deficient, and does not approve it with conditions ormodifications, it is deemed disapproved, and 

### ALe shall correct the deficiencies and resubmit it within the time specified bythe Commissioner or, ifno time is specified bythe Commissioner, within thirty 

### (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**~er** 

### rion as submitted orperfonned**~i** 

### with such conditions or modifications as the Initials: 

# YC§t 5 Date: 

# ';0)..tUleghenvLudlum Corporation 

### TradiTIO AoreemeTIt and OrderNo. 8188
Commissioner deems necessary to carry out the purposes ofthis Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance or delay. 8. Definitions. As used in this Trading Agreement and Order, "Commissioner" means the Commissioner or a representative ofthe Commissioner. The date of"issuance" ofthis Trading Agreement and Order is the date the Trading Agreement and Order is deposited in the U.S. mail orpersonally delivered, whichever is earlier. 9. Dates. The date ofsubmissionto the Commissioner ofany documentrequired by this Trading Agreement and Order shall be the date such document is received by the Commissioner, whichever is earlier. The date ofanynotice by the Commissioner under this Trading Agreement and Order. including but not limited to notice ofapproval or disapproval ofany document orother action. shall be the date such notice is deposited in the U.S. mail or is 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 Orderto be submitted orperformed by adate which falls on a Saturday. Sunday or a Connecticut or federal holiday shall be submitted orperformed by the next day which is not a Saturday, Sunday or Connecticut or federal holiday. 10. Certification ofdocuments. Anydocument, including but not ILllited to any notice, which is required to be submitted to the Commissionerunder this Trading Agreement and Order shall be signed by ALe's chiefexecutive officeror a duly authorized representative ofsuch officer, as those tenns are defined in Section 22a-430·3(b)(2) of the Regulations ofConnecticut State Agencies, and by the individual(s) responsible for actually preparing such document. ALC's chiefexecutive officer or authorized representative and each such individual shall certify in writing as follows: "I have personally examined and am familiar with the infonnation submitted in this document and all attachments thereto, and I certify, based on reasonable investigation, including my inquiry ofthose individuals responsible for obtaining the information, that the submitted infonnation is true, accurate and complete to the best ofmy knowledge and belief. I understand that any false statement made in the submitted information is punishable as acriminal offense under Section 53a-157b ofthe Connecticut General Statutes and a."1y other applicable law." i 1. Noncompliance. This Trading Agreement and Order is a final order ofthe Commissionerwith respect to the matters addressed herein, and is nonappealable and immediately enforceable. Failure to comply with this Trading Agreement and Order may subject ALC to an injunction and penalties.

12. False statements. Any false statement in any infonnation submitted pursuant to this Trading Agreement and Order is punishable as a criminal offense under**§53a~J** 

### 5ib ofthe Connecticut General Statutes and any other applicable law. 

# =--',
- / Initials: 

### _V-L. 

# -==**Cfl;",-~** 

## __ 6

### Alleghenv Ludlum Cornoration Trading A2Teement and OrderNo. 8188 

### 13. Notice oftransfer: liability ofALC. Until ALC has fully compliedwith this Trading Agreement and Order, ALC shall notify the Commissioner in writing no later than thirty (30) days after transferring all or anyportion ofthe facility, the operations, the site or the business which is the subject ofthis Trading Agreement and Orderor after obtaining a new mailing or location address. ALe's obligations**und~** 

### this Trading Agreement and Order shall not be affected by the passage oftitle to any property to any other person or municipality. 14. Commissioner's Dowers. 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 ofla-w, prevent or abate pollution, recovercosts and natural resource dac.-nages, and to imposepenalties for past, present, or future violations oflaw. If

### at any time the Commissioner determines that the actions taken by ALC pursuant to this Trading Agreement and Orderhave·not successfully corrected all violations, fully characterized the extent or degree ofany pollution, or successfully abated orprevented pollution, the Commissionermay institute anyproceeding to require ALC to underiake furLher investigation or further action to prevent or abate violations or pollution. 15. ALC's obligations under law. Nothing 

### in this Trading**Agre,..~ent** 

### and Order shall relieve ALC ofotherobligations under applicable federal, state and local law. 16. No assurance bv Commissioner. No provision ofthis Trading Agreement and Order and no action orinaction by the Commissioner shall be construedto constitute 

### a:., assurance by the Commissioner that the actions taken by ALC pursuant to this Trading Agreement 2.J.id Order will result in compliance. 17. Access to site

..Any

### representative ofthe Department ofEnvironmental Protection may enter the facility without priornotice for the purposes ofmonitoring and enforcing the actions required or allowed bythis Trading Agreement a.'1d Order. 18. No effect on riQhts ofotl-teroer.:oOns. This Trading Agreementand Order neither creates nor affects any rights ofpersons or municipalities that are notparties to this Trading Agreement and Order. 19. Notice to Commissionerofcha!:!!zes. \Vithin fifteen (15) days ofthe date .A.LC becomes aware ofa change.in any infonnation submitted to the Commissioner underthis Trading Agreement and Order, or that any such information was inaccurate ormisleading or that any relevant information was omitted, ALC shall submit the correct or omitted information to the Commissioner. 20. Notification ofComoliance. 

### In the event that ALe becomes aware that it did not or may not comply, ordid not ormay not comply on time, with any requirement ofthis Trading Agreement and Orderor ofany docwnentrequired hereunder, ALC shall immediately notify by telephone the individual identified in the nextparagraph and shall take all reasonable steps to ensure that any noncompliance or delay is avoided or, ifunavoidabJe, 

## a is minim1zed to the greatest extent possible. Within five (5) days' ofthe}Attiaynotice, 

### Initials: 

# V

# C4; 7 Date: 

## .;;'J2,I!Q;)..

,

### AlleQ"nenvLudlum Comoration Trading AQTeement and OrderNo. 8188 

### Ale shall submit 

### in \¥TIting 

### 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 

### ALe shall comply with any dates which may be approved in writing by the Commissioner. Notification by ALC shall not excusenoncompliance ordelay, and the Cormnissioner's approval ofany compliance dates proposed shall not excuse noncompliance ordelay unless specifically so stated by the Commissioner in writing. 21. Submission ofdocuments. Any document required to be submitted to the Commissioner under this Trading Agreement and Order shall, unless othe:rvvise specified in this Trading Agreement and 

### Order in 

### writing by the Commissioner, be directed to: Mr. Roland 1. Severance Jr., PE Department ofEnvironmental Protection Bureau of

### Air**Mana~ement** 

### Emissions and CJedlt Trading Section 79 Elm Street, 5 

### Floor Hartford, Connecticut 06106-5127

### a...~ 

## .I Initials: 

### _!...Y--,c:..=,,-n..""'l..

__ 8 Date: 

# .s::P.**/~n** ,

### Alle£henvLudlum Coruoration Trading**A~eement** 

### and OrderNo. 8188
ALe 

### consents to the issuance ofthis TradingAgreement and Order without further notice. The undersigned certifies that he/she is fully authorized to enter into this Trading Agreement and Order 

### and to legallybind 

### ALe to the terms and conditions ofthe Trading Agreement and Order. c,-'JJegheny

# Lu~~orporation / BY Signature: 

# II

# 2-Af~~ Typ::

### N2Jc-ne:

# T~rre.ncp. L.

# Har.t~Id 

# j Type 

### Title: President - .Ulegheny 

### Rodney Date: 

## s;-

# /.J. 

# tI OJ / /



### Entered as afinal Trading**A~Fnt** 

### and Order**~a?irnmiSSioner** 

### ofEnvironrnental Protection numbered 8188 tllis 

## '/= dayor // 2002. 

# rJ 

# Cl-/A6d A"dlKUIJ. 

### Rocque, J r. 

### y1Th71iSSiOner



### CITY OF WALLINGFORD LA.>m RECORDS MAILED CERTIFIED MAIL, RETURNRECEIPT REQUESTED Certified Document No.
\IDEPJ\SYS2\USERS\RSEVER.

....**~'\.** TR...OING-iUS.....TRADlNGORDERS\ALG-LD1'--NJ 88**o!der'.818!J.~der(** 4-2S-G2).do:



### 9