## STATE OF CONNECTICUT DEPARTMENT OFENVIRONMENTALPROTECTION



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In the matterof

The State ofConnecticutand Trading Agreement andOrderNo. 8153

The United Illuminating Company

Whereas, the CommissionerofEnvironmental Protection ("Commissioner") and The United Illuminating Company ("UI") agree that it is in the public interest that theywork cooperatively to improve the airqualitywithin the State ofConnecticut and that the
use ofemission reduction trading will achieve this result in a timely and cost-effectivemanner:
A. At the request andwith the agreementofUI, the Commissioner finds the following:

1. UI is anelectricutilitywith headquarters in New Haven, Connecticut. which owns andoperates three fossil fuelfired electric generating stations within the state.

2. One ofthe three fossil fuel-fired electricgenerating stations within the state that UI owns and operates is New Haven Harbor Station at 1Waterfront Street in New Haven, Connecticut ("facility"). At the facility, UI operates New Haven Harbor Station Unit 1, Connecticut Permit 117- 0031, a tangentially-fired boiler, currently rated at 485 megawatts ("boiler"). The boiler has the dual capacity to operate on fuel oil (No. 6 or No.2) and/or natural gas. No.2 fuel oil is used primarily

as a start-up fuel. Acontinuous emissions monitor ("CEM"), certified to 40 Code ofFederal Regulations Part 75, measures nitrogen oxide ("NOx")emissions from the boiler.

Date: 3.

Initials: During the year 1990, prior to installation ofthe new systemof 16 water-wall water lances, andbased on CEM and Method 7-E stack test data, the average annual NOx emission rate for New Haven Harbor Station Unit 1 was 0.28 pounds permillion British thermal units ("lbs/MMBtu") ofheat input when operating on No. 6 fuel oil, 0.17 lbs/MMBtu ofheat input when operating

on No. 2 fuel oil and 0.20 lbs/MMBtu ofheat input when operating on natural gas. On and after May 31, 1995, the Regulations ofConnecticut State Agencies 

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("Regulations") require that New Haven Harbor Station Unit 1 emit NOx at a rate no greater than 0.25 Ibs/MMBtu ofheat input when operating on No. 6 fuel oil and 0.20 Ibs/MMBtu ofheat input when operating on No.2 fuel oil or natural gas.
4. In December 1994, UI, through its contractors, completed installation and began to test andmake fully operational, a new systemof 16 water-wall water lances at the facility, thereby reducing the boiler's NOx emission rates below its permitted, allowed and actual 1990 emission rates. Such control system enabled UI's boiler to frequently meet and operate below the emission limitation specified in Section 22a-174-22(e)ofthe Regulations.

5. After January 1, 1997, UI may obtain approval of actual reductions in NOx emissions, generatedby operating the boiler at a rate which is below 0.25 lbs/MMBtu ofheat input when operating on No. 6 fuel oil, 0.17 Ibs/MMBtu ofheat input when operating on No.2 fuel oil and 0.20 lbs/MMBtu ofheat input when operating on natural gas, for use as emission reduction credits ("ERCs").

6. Pursuant to Section 22a-174-22(j) ofthe Regulations, UI intends to acquire and generate approved ERCs until May 1, 2003 at the facility. Approved ERCs are defined for purposes ofthis Trading Agreement and Order as those for which the Commissioner has provided written authorization for use in compliance with Section 22a-174-22 ofthe Regulations. UI will acquire approved ERCs monthly on an as-needed basis,
as determined by actual NOx emissions in the event that the 24-hour average exceeds the NOx emission limitations of Section 22a-174-22(e} ofthe Regulations.

7. When properly documentedby UI, and approvedby the Commissioner, the emission reductions identified above, and as computed in accordance with the terms of this Trading Agreement and Order, will conform to the requirements of Section 22a-174-22(j)(3) of the Regulations. Specifically, the reductions will be:

Initials: 2 Date:The United Illuminating Company Trading Agreement andOrder No. 8153

because they result in a reduction ofactual emissions released into the air, net ofany consequential increase in actual emissions resulting from shifting demand. The emission reductions are properlymeasured, recorded and reported.

Ouantifiable because they are based on Continuous Emission Monitoring Data as applied in an appropriate reliable and replicable protocol, providing the rate and total mass amount of reduction. Surplus because they are not requiredby any Connecticut statute or regulationmandated by a current State Implementation Plan ("SIP"), and are not currently relied upon in any applicable attainment plan, any reasonable further progress plan or milestone demonstration.

Permanent because the advanced control system is in place and operating, and an appropriate tracking system is in place to monitor all data required to verify and quantify the creation ofERCs.

Enforceable because the ERCs are approvedby the Commissioner retrospectively after the submission by UI ofthe quarterly or semi-annual report that will document their creation.

8. As documented in Attachment 1, attached to and incorporatedby reference into this Trading Agreement and Order, 1,003 ERCs were createdby the boiler between January 1, 1997 and September 30, 1998(390 during the ozone season and 613 during the non-ozone season)

. B. The Commissioner, in accordance with the provisions of this Trading Agreement andOrder, pursuant to Section 22a-l74- 22(d)(4) of the Regulations, will allow UI and approved sources within Connecticut to use 1,003 tons ofNOx ERCs referenced in paragraphA.8. ofthis Trading Agreement andOrder (390 during the ozone season, and 613 during the non-ozone season) for purposes ofcompliance under Section 22a-174-22(j) and/or Section 22a-174-3(1)(5) ofthe Regulations to achieve a portion ofthe nitrogen oxide emission reductions required or as emission offsets for new sources.

Initials: 3 Date:The United Illuminating Company Trading Agreement and Order No. 8153

Upon sufficient documentation as prescribedbelow, the Commissioner may provide written approval ofadditional ERCs by UI retrospectively. ApprovedERCs createdby UI may be heldby UI or transferred to other persons. Such ERCs shall remain valid until they are used or until May 1, 2003, whichever occurs first.

C. With the agreement ofUI, the Commissioner, acting under Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a-177 of the Connecticut General Statutes, orders UI as follows:

1. ERC aeneration. For purposes of generating ERCs from the boiler at the facility, UI shall use the appropriate baseline emission rate(s) of0.25 Ibs/MMBtu ofheat input when operating on No. 6 fuel oil, 0.17 Ibs/MMBtu ofheat input when operating on No. 2 fuel oil and 0.20 lbs/MMBtu ofheat input when operating on natural gas, or use the proportioned baseline emission rate set forth in footnote 2 of paragraph C.10. ofthis Trading Agreement and Order, when simultaneously operating on more than one fuel. U! shall use the above referencedbaseline emission rate(s) when calculating the proportioned baseline emission rate. When calculating ERCs, UI shall use the lower ofCEM-recordedNOx emission rate(s)* or actual fuel usage data for the boiler in MMBtu/day, when determining heat input. The ten (10) percent uncertainty discount due to not having data from an official Method 7-E stack test or CEM data while operating on No. 2 fuel oil and/or natural gas shall be incorporated into the proportioned baseline emission rate whenever the boiler is operating on No. 2 fuel oil and/or natural gas as referenced in paragraph C.lO. ofthis Trading Agreement and Order and shall be retired by the facility and permanently removed from all calculations on a daily or monthly basis. An additional ten (10) percent ofall ERCs (tons) created shall also be retiredby the facility and permanently removed from all calculations on a daily ormonthly basis to assure a benefit to the environment.

shall be calculatedpursuant to described in 40 Code ofFederal

Initials: 

### * This rate methodology

4 Date: theThe United Illuminating Company

Regulations Part 75. Trading Agreement andOrder No. 8153

2. ERC Use. Approved ERCs shall be acquired for the period beginning June 1, 1995 until UI achieves permanent compliance for the boiler with the emission standards in Section 22a-174-22{e) of the Regulations
oruntil May 1, 2003, whichever occurs first. UI shall acquire approved ERCs, anddocument and record the amounts ofNOx emissions and ERCs used by the boilereachmonth, and shall maintain and provide such records in accordance with the following and Section 22a-174-4 ofthe Regulations, until May 1, 2003:

a. Before the first day ofeachmonth, calculate the projectedworst case ERCs required for the same calendarmonth as follows:

ERCs (tons) = ([estimatedworst case NOx emission
rate in lbs/MMBtu

- ((0.95) x (NOx RACT limit or proportioned emission rate calculatedpursuant to Section 22a-174-22(f)(2)(A) of the Regulations in 

### lbs/MMBtull) x (Estimated fuel use in MMBtulI 2000 pounds.

b. Acquire sufficient approved ERCs no later than the first ofeach month to assure compliance for, at a minimum, that calendarmonth. Excess credits from previous months can be applied to subsequentmonths. ERCs required shall be adjusted upwards by 100% ifERCs are not in UI's possession prior to use.

c. No later than the twentieth day ofeachmonth, calculate ERCs used in the preceding calendar month, as follows:
(1) For the boiler on each day, determine whether the 24-hour average NOx emission rate is less than the baseline emission rate
or greater than the NOx RACT limit.
(2) When the boiler has a daily NOx emission rate (24-hour average) exceeding the NOx RACT limit, calculate the amount ofERCs

Initials: 5 Date:The United Illuminating Company

used, as follows: Trading Agreement and Order No. 8153

ERCs (tons) = {[(CEM-recordedNOx daily average emission rate in lbs/MMBtu)

- ((0.95) x (NOx RACT limit orproportioned emission rate calculatedpursuant to Section 22a-174-22(fl(2I(AI ofthe Regulations in lbs/MMBtulI] x (actual fuel use in MMBtul) 2000 pounds.

d. Maintain documentation to attest to the fact that ERCs used during the ozone season were generated during the ozone season. Generator certification ofthis fact shall be sufficient.

e. After full programreview, and ifthe Commissioner deems it appropriate, the Commissionermay allow the survival and use of these ERCs beyondApril 30, 2003.

3. UI shall maintain records for the boiler showing daily NOxmass emissions, and actual NOx emission rates (24- hour average). UI shall also maintain records showing
a daily ormonthly total ofall ERCs generated net of the applicable uncertainty and environmental discounts.

4. In requesting ERC approval, ur shall provide documentation containing daily ormonthly operating reports ofactual fuel usage in MMBtu and actual heat input based upon CEM-recorded data, daily ormonthly actual NOxmass emissions and NOx emission rates (24- hour average), number ofoperating hours per day, and ERCs generated using the baseline emission rate{s) or the proportionedbaseline emission rate, referenced in paragraph C.l. of this Trading Agreement and Order, net ofthe applicable uncertainty and environmental discounts.

5. No later than March 1 ofevery year after issuance of this Trading Agreement andOrder, ur shall include with the Annual Emission Statementprovided to the Commissioner, a recordofeach sale or other transfer, and use ofany and all ofthe ERCs approvedwithin and

Initials: 6 Date:The United Illuminating Company Trading Agreement andOrder No. 8153

subsequent to issuance ofthis Trading Agreement and Order until all such ERCs have been used. UI shall also include actual NOx emissions from the boiler, and the amount ofall ERCs used (including approved ERCs generated and/or purchased from other facilities), generated and/or approved for the previous calendar year. These reports will be on a formprescribed by the Commissioner. This reporting may cease ifa central registry is approvedby the Commissioner. ShouldUI choose to discontinue the generation of ERCs, UI will notify the Commissionerupon discontinuance.

6. In order to consider CEM-recorded NOx emission rates valid for ERC approval, all NOx and CO2/02CEMs must comply with 40 Code of Federal Regulations Part 75.

7. UI shall retain records and supporting documentation
as described in this Trading Agreement and Order for a minimumof five years, commencing on the date such records were created. UI shall provide the records specified above to the Commissioner within thirty (30) days ofreceipt ofa written request from the Commissioner.

8. Upon sufficient documentation that UI has met the requirements ofparagraphs C.l., C.3, C.4., and C.lO., ofthis Trading Agreement and Order, the Commissioner mayprovide written approval ofERCs createdby UI retrospectively, in addition to the 1,003 ERCs approved in paragraph B. ofthis Trading Agreement and Order. Requests for approval of all subsequent ERCs created shall be submitted in writing to the Commissioner. ApprovedERCs createdby UI maybe held
or transferred to otherpersons. Such ERCs shall remain valid until they are used oruntil May 1, 2003, whichever occurs first.

9. Should UI choose to generate additional ERCs, reports documenting these credits maybe submitted on a quarterly or semi-annual basis. Such reports shall be compiled on a monthly basis.

10. When the boilerhas daily or monthly NOx emissions

Initials: 7 Date:The United Illuminating Company Trading Agreement andOrder No. 8153

below the applicable baseline emission rate(s) or the proportionedbaseline emission rate, UI shall calculate the amount ofERCs generated as follows:

ERCs (tons) : {[Total heat inputl of all fuels in MMBtu

x ((proportionedbaseline emission rate2) (the CEMrecorded NOx emission rateJ))] + 2000 lbs/ton} x (0.90).'

1 Heat input shall be calculatedusing the lower ofCEM-recorded data oractual fuel usage data inMMBtuperunit offuel combusted.

2This rate shallbe calculatedby 1Imultiplying the heat input ofeach fuel combustedbythe baseline emissionrate(s) for such fuel; 2) summing those products; and 3) dividing the sumbythe total heat input. Iftheboiler is operating exclusivelyon one fuel, UImay replace the proportionedbaselineemission rate with the applicablebaseline emission rate, for that fuel. The ten (10) percent uncertaintydiscount due to not having data from an official Method7-E stack test orCEMdata while operating onNo. 2 fuel oil and/ornatural gas shall be incorporatedinto theproportionedbaseline emission rate whenever theboiler is operating on No. 2 fuel oil and/or natural gas. )This rate shall be calculatedpursuant to the methodology describedin 40 Code ofFederal Regulations Part 75.

4An additional ten (10) percent ofall ERCs (tons) created shall also be retiredbythe facility andpermanently removed from all calculations ona daily ormonthlybasis to assure a benefit to the environment.

11. As used in this Trading Agreement and Order, "Commissioner" means the Commissioner ofEnvironmental Protection or an agent of the Commissioner. "Ozone
seasonH means the period fromMay 1 through September 30 in any given calendar year.

Date: 8 Notification ofnoocompliance. In the event that UI becomes aware that it did not ormay not comply, or did not ormay not comply on time, with any requirement ofthis Trading Agreement andOrder or of any document requiredhereunder, UI shall immediately notify the Commissioner and shall take all reasonable steps to ensure that any noncompliance or delay is avoidedor, ifunavoidable, is minimized to the greatest extent possible. In so notifying the 

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Initials:The United Illuminating Company Trading Agreement and Order No. 8153

Commissioner, UI shall state in writing 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 UI shall comply with any dates whichmaybe approved in writing by the Commissioner. Notificationby UI shall not
excuse noncompliance or delay, and the Commissioner's approval ofany compliance dates proposed shall not
excuse noncompliance or delay unless specifically so stated by the Commissioner in writing.

13. 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 signedby the chief executive officer ofUI or a duly authorized representative of such officer, as those terms are defined in Section 22a-430-3Ib)(2) ofthe Regulations, andby the individual or individuals responsible for actually preparing such document, each ofwhom shall examine and be familiar with the information submitted in the document and all attachments thereto, and shall make inquiry of those individuals responsible for obtaining the information to determine that the information is true, accurate, and complete, and each ofwhom shall certify in writing as follows:

"I have personally examined and am familiar with the information submitted in this document and all attachments thereto, and I certify that based on reasonable investigation, including my inquiry of those individuals responsible for obtaining the information, the submitted information is true, accurate and complete to the best ofmy knowledge and belief. I understand that any false statementmade in the submitted informationmay be punishable as a criminal offense under Section 22a-l75 ofthe Connecticut General Statutes or, in accordance with Section 22a-6 ofthe Connecticut General Statutes, under Section 53a-157b ofthe Connecticut General Statutes, and in accordance with any other applicable statute."

Date: 14.

Initials: Final Agreement and Order. This Order is the final agreement and

9 Trading Agreement and orderby and between 

# fhoh7The United Illuminating Company Trading Agreement and Order No. 8153

the Commissioner and UI with respect to the matters addressed herein, and shall not be modifiedwithout the written agreement ofboth parties.

15. False statements. Any false statement in any information submitted pursuant to this Trading Agreement and Order maybe punishable as a criminal offense under Section 22a-175 ofthe Connecticut General Statutes or, in accordance with Section 22a-6, under Section 53a-lS7b ofthe Connecticut General Statutes.

16. Notice oftransfer; liability ofUI and others. Until UI has fully complied with this Trading Agreement and Order, UI shall notify the Commissioner in writing no later than fifteen (IS) days after transferring all or any portion of the facility, the operations, the site
or the business which are the subject ofthis Trading Agreement and Order, or obtaining a newmailing or location address. Any license transfer shall be conducted in accordance with Section 22a-60 of the Connecticut General Statutes. UI's obligations under this Trading Agreement and Order shall not be affected by the passage of title to any property to any other person ormunicipality. Any future owner of the facility may be subject to the issuance of a Trading Agreement and Order from the Commissioner.

17. Commissioner's powers. Nothing in this Trading Agreement and Order shall affect the Commissioner's authority to institute any proceeding 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 violations of law which are willful or criminally negligent or for which penalties have not been specifically provided in this Trading Agreement and Order, including but not limited to violations of any permit issuedby the Commissioner. Ifat any time the Commissioner determines that the actions taken by UI pursuant to this Trading Agreement and Orderhave not fully achieved compliance with Section 22a-174-22 of the Regulations, the Commissionermay institute any proceeding against UI and/or require UI to undertake further investigation or further action.

Initials: 10 Date:The United Illuminating Company Trading Agreement and Order No. 8153

18. UI's obligations under law. Nothing in this Trading Agreement and Order shall relieve 01 of other obligations under applicable federal, state and local law.

19. Access to records and facility. Any representative of the Department ofEnvironmental Protectionmay enter and inspect the facility and inspect and copy records within normal business hours without prior notice for the purposes ofmonitoring and enforcing the actions required or allowedby this Trading Agreement and Order.

20. No effect on rights ofotherpersons. This Trading Agreement and Order shall neither create nor affect any rights ofpersons who ormunicipalities which are not parties to this Trading Agreement and Order.

21. No Creation of Property Rights. This Trading Agreement and Order does not create any property rights with respect to these ERCs.

22. Notice to Commissioner ofchanges. Within fifteen (15) days ofthe date UI becomes aware of a change in any information submitted to the Commissioner under this Trading Agreement and Order, or that any such information was inaccurate or misleading or that any relevant information was omitted, 01 shall submit the correct or omitted information to the Commissioner.

23. Submission ofdocuments. Any document required to be submitted to the Commissioner under this Trading Agreement and Order shall, unless otherwise specified in writing by the Commissioner, be directed to:

Mr. David Jawin Department ofEnvironmental Protection Bureau ofAir Management Compliance and Field Operations Division Emissions Trading Unit 79 ElmStreet Hartford,**Conn~cticut** 06106

Initials:

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## r /The United Illuminating Company Trading Agreement and Order No. 8153

UI 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 and Order and to legally bind

### ur to the terms and conditions of the Tradi.lg Agreement and Order.
Company Signature: 

### The**~un~I11uminating** 

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_ I J Type Name: Albert N. Henricksen Type Title: Group Vice President Support Services

Date: April 30, 1999

Issued as a final consent order ofthe Commissioner of

Environmental Protection on April 30 1999.

Arth r J. Rocque, Jr. Commissioner

CITY OF NEW HAVEN LAND MAILED CERTIFIED MAIL, Certified Document'No. RECORDS RETURN RECEIPT REQUESTED



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