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# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of The State ofConnecticut and PSEG PowerConnecticutLLC ) ) ) ) ) Trading Agreement and Order No. 8240 Modification 2

Whereas, the CommissionerofEnvironmental Protection ("Commissioner") and PSEG Power ConnecticutLLC (PSEG) having agreed to the terms and conditions set forth in Trading Agreement and Order 8240 issued on February 13, 2003 and Trading Agreement and Order 8240 Modification I issued September 16, 2004, do now, by mutual agreement, modify said Trading Agreement and Order No. 8240 as follows: 1. Delete the date May 1, 2005 and substitute therefore the date May 1, 2009 in paragraphs A.5., A.7., A.8., CI., C.2. , C.6 footnote 3, and C.7
.. 2. Delete paragraph C.7.a. and substitute the following therefore: At all times: Before the first day ofeach month, PSEG calculate projected worst case DERCs required for that calendar month as follows: Estimated DERCs (tons) 

## ={[estimated worst case NOx emission rate in IbslMMBtu

- ((0.95) x (NOx allowable emission limit or proportioned emission rate calculated pursuant to Section 22a-174-22(f)(2)(A) ofthe Regulations in IbslMMBtu))] x (Estimated fuel use in MMBtu)} 

### c- 2000 pounds/tons. No later than the twentieth day ofeach month, PSEG shall calculate and permanently retire DERCs used in the preceding calendar month, as follows: (i) 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 allowable emission limit. (ii) When the boilerhas a daily NOx emission rate (24-hour average) exceeding the NOx allowable emission limit, calculate the amount ofDERCs used, as follows: Actual DERCs (tons) = {[(CEM-recorded NOx daily average emission rate in IbsIMMBtu*)

- ((0.95) x (NOx allowable emission limit or proportioned emission rate

(Printed on Recycled Paper) 79 Elm Street • Hartford. CT 06106 - 5127 An Equal Opportunity Employer'.,



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PSEG PowerConnecticutLLC 2 Trading Agreement and OrderNo. S240 Modification 2 calculated pursuantto Section 22a-174-22(f)(2)(A) ofthe Regulations in Ibs/MMBtu))] x (actual fuel use in MMBtu)} .;- 2000 pounds/tons. *This rate shall be calculatedpursuant to the methodology described in 40 CFR Part 75. During the non-ozone season: During the period from October I through April 30, inclusive, each yearuntil May 1,2009, the boiler 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 ofO.15Ibs/MMBtu. Priorto October I, 2006, 2007 and 200S, PSEG shall estimate and acquire the amount ofDERCs or allowances required for such nonozone season needed to comply with Section 22a-174-22(e)(3) ofthe Regulations as follows: Estimated DERCs (tons) = [Estimated fuel use in MMBtu from October I through April 30 x (lowerofthe estimated seasonal average NOx emission rate orthe proportioned 24-hour allowable emission limit in Ibs/MMBtu during October I through April 30)

- (0.95 x 0.15 Ibs/MMBtu)] .;. 2000 pounds/ton. No laterthan May 31, 2007, 200S and 2009, in addition to the DERCs retired in paragraph e.7.a., calculate and permanently retire DERCs used in the preceding nonozone season as follows: Actual DERCs (tons) = [Actual fuel use in MMBtu from October I through April 30 x (lower ofthe actual seasonal average NOx emission rate orthe proportioned 24-hour allowable emission limit in Ibs/MMBtu during October I through April 30)

- (0.95 x 0.15 Ibs/MMBtu)] .;. 2000 pounds/ton.
3. Delete paragraph e.S. and substitute the following therefore: DERC Shortfall. At a minimum, DERCs required shall be adjusted upwards by 100% if DERCs are not in PSEG's possession for use priorto the first day ofeach month or applicable season. However, nothing in this Trading Agreement and Order shall affect

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PSEGPowerConnecticut LLC 3 Trading Agreement and OrderNo. 8240 Modification 2 the Commissioner's authority to institute any proceeding ortake any other action to require additional upward adjustment, based on the gravity ofany alleged noncompliance or violation oflaw. PSEG shall permanently retire the quantity ofDERCs equivalent to the excess emissions plus a 100% premium within sixty (60) days ofPSEG's discovery of the DERC shortfall. PSEG shall certify and report any such DERC retirement to the Commissionerin accordance with paragraph C.28. ofthis Trading Agreement and Order.
4. Delete paragraph C.12 and substitute the following therfor: Annual Emission Statement and Non-Ozone Season Emission Statement. No laterthan March I for the previous calendar year and July 30 (forthe Octoberthrough April time period only starting in 2003) ofevery year afterissuance ofthis Trading Agreement and Order, PSEG shall provide to the Commissioner, arecord ofeach sale or othertransfer, and use ofany and all ofthe DERCs approved within and subsequent to issuance ofthis Trading Agreement and Orderuntil all such DERCs have been used or are no longerin PSEG's possession. PSEG 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 otherfacilities), generated and/or approved for the previous calendar year and Octoberthrough April time period. These reports shall be on a form prescribedby the Commissioner and shall be in monthly increments, and by ozone and non-ozone seasons.
5. Delete the word "individual" and substitute therefore the word "section" in paragraph C.28
.. 6. Delete the name "Wendy Jacobs" in paragraph C.29
.. 7. Include anew paragraph C.30. as follows: Extension. No laterthan May 1, 2009, with respect to the boiler, PSEG shall comply with the requirements ofSections 22a-174-22(d)(l) and 22a-174-22(d)(2)(A) ofthe Regulations and amendments thereto. There is no assurance that the Commissionerwill grant a written extension ofthis Trading Agreement and Order.

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PSEG hereby consents to the entry ofthis modification to the Trading Agreement and Order withoutfurther notice. All otherterms and conditions ofTrading Agreement and OrderNo. 8240 issued by the Commissioner acting under Chapter446c, Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a-177 ofthe ConnecticutGeneral Statutes shall remain in effect. Trading Agreement and OrderNo. 8240 Modification 2

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8. Include a new paragraph C.3!. as follows: Future Compliance Report. On orbefore September 1, 2008, PSEG shall submit areport in writing to the Commissioner, as directed in paragraph C.29. ofthis Trading Agreement and Order, indicating how the facility shall comply with section 22a-174-22 ofthe Regulations with respect to the boiler on and afterMay 1,2009.

CITY OF NEW HAVEN LAND RECORDS MAlLED CERTIFIED MAlL, RETURN RECEIPT REQUESTED Issued as amodification ofan Order ofthe CommissionerofEnvironmental Protection

CertifiedDocumentNo. 7001 2510 0000 6250 4762

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# GiIIlIMCCY Commissioner PSEG PowerConnecticutLLC



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