# 2**~~** 

# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In 

### the matterof The State ofConnecticut and ConnecticutJet Power LLC


# , ) ) ) ) ) Trading Agreement and Order No. 8180 A

Whereas, the Commissioner ofEnvironmental Protection ("Commissioner") and Connecticut Jet Power LLC ("CJP") 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 credit ("DERe") trading to reduce nitrogen oxide ("NUx") emissions will achieve this result in a timely and cost-effective manner:

A. At the request and with the agreement ofCJP, the Commissioner finds the following:**.~** 

### ':J 1. This Trading Agreement and Order 5upercedes Trading Agreement and Order 8180 issued on January 12, 2000 and Trading Agreement and Order 8180 Modification No.1 issued on May 7, 2002. 2. CJP 

### is an exempt wholesale electric generating company with its principal place of business in Sewickley, Pennsylvania. CJP owns fuel burning equipment consisting ofsix (6) combustion turbines ("peaking units") at the facilities identified in Table 1 ofthis Trading Agreement and Order. 3. NRG Middletown Operations Inc. operates the peaking units at CJP's four (4) facilities identified 

### in Table 1 ofthis Trading Agreement and Order. 4. Emission -testing performed on the dates indicated in Table I, resulted in a NOx emission rates as follows:

(Printed on Recycled Piper) 79 Elm Streel • Hartford, CT 06106·5127 hllp:lldep.$tllc.Ct.l,I$ ,01./1 EquQf Opp0rfu/liry Employa

### CO!Ulecticut Jet Power LLC 2



### Table 1 TradingAgreement and OrderNo. 8180 A

Facility/ Fuel Heat Input StackTest FLER Allowable 

### Date of Next Peaking VItit 

### MMBruIhr (ppmvd) IbsIMMBru Rate Stack Stack 

### (serial #) , IbsIMMBru Test Test Due Boston Post Road 

### #2 oil 256- 184 0:80 0.29 9/6/01 9/6/06

Branford -10 (675102) Sound Shore Drive 

### #2 oil 256 193 0.80 0.29 8/22/01 8/22106

Greenwich-I0

(675337) Sound Shore Drive #2 oil 256 144 080 0.29 8/23/0I 8/23/06

Greenwich-II

(675192) Sound Shore Drive 

### #2 oil 256 182 0.80 0.29 8/23/01 8/23/06

Greenwich·12

(675342) FrankJin Drive 

### #2 oil 256 194 0.80 0.29 4120101 4120106 Torrington-IO (F662098) 

### ;.;J Sou·th Main Street 

### #2 oil 256 197 0.80 0.29 4119/01 4119/06 Torrington-IO

(612599)

### 5. CJP exceeds the NOx allowable emission rate for the peaking units specified in Section 22a-174-22(e) oftbe Regulations as sbown in Table 1 ofthis Trading 

### Agreement and Order. 6. Pursuantto the Department ofEnviromnental Protection's "Credit Trading/or Sources with IrregularNOx Emissions" 

### policy, with arevised date ofFebruary 

### 27, 2001, attached hereto and incorporated by reference into this TradingAgreement and Orderas Exhibit I, the**p~aking** 

### units have peak daily NOx emissions greater than three times the average daily emissions during the ozone season and are therefore considered sources with irregularNOx emissions. 7. 

### Pursuant to 

### Section 22a-174-22(j) ofthe Regulations, during the non-ozone season, CJP intends to acquire approved DERCs until May I, 2005 for tbe peaking units. Pursuant to Section 22a-174-220) oftbe Regulations, during tbe ozone season, CJP 

### intends to acquire approved. Budget discrete emission reduction credits ("BDERCs'j until May 1,2005 for tbe peaking units
.



### .......ConnecticutJet PowerLLC 

### 3 Trading Agreement and Order No. 8180 A



### . '-" 8. The Commissioner, pursuantto Section 22a-174-22U) ofthe Regulations, previously approved the NOx DERCs referenced in Table 2 ofthis Trading Agreement and Order. DERCs are subject to thevintage restrictions ofthis Trading Agreement and Order. Dates after which the DERCs will no longerbe eligible for use as a result of the vintage restrictions are provided in Table 2ofthis Trading Agreement and Order in the expiration date column. I Table 2 Year of Ozone season DERC serial Ozone

# I Non-Ozone season Non· Expiration Generation numbers DERC serial numbers Ozone Date 2001 Not assigned 3 

## I N/A 0 12/31/2004
B. The Commissioner, in accordance with the provisions ofthis Trading Agreement and Order, and pursuant to Section 22a-174-22(j) ofthe Regulations, hereby allows CJP to comply with Section 22a-174-22 ofthe Regulations through use ofDERC and BDERC trading.

-. C. With the agreement ofCJP, the Commissioner, acting under Sections 22a·6, 22a-171, 22a-174, 22a-176, and 22a-177 ofthe Connecticut General Statutes, orders CJP as follows: 1. Upon issuance ofthis Trading Agreement and Order, at the facility, CJP shall comply with Section 22.-174-22 ofthe Regulations through DERC trading. Until CJP achieves pennanent compliance with the emission standard 

### in Section 22a-174-22(e) ofthe regulation orbyMay I, 2005 whichever occurs earlier:
a. CJP shall use approved DERCs as required under this Trading Agreement and Order; b. CJP shall have in its possession sufficient approved DERCs to meet applicable NOx emission limits as allowed under this Trading Agreement and Order; and

c. CJP shall complyduring operation ofthe peaking units with the FLERS sbown in Table 1 ofthis Trading Agreement and Order. 2. DERC use
a. Until May I, 2005, before the first day ofeach month, CJP shall have in its possession sufficient approved DERCs for the peaking units based on the following calculations
.

### Connecticut Jet Power LLC 4 

### TradingAgreement and OrderNo. 8180 A 

### Before the first day ofeach month, CJP shall estimate DERCs required for such month for the peaking units as follows. i. 

### At all times (mass calculation):

EstimatedDERCs (in tons) = (estimated fuel use in MMBtu) x «(FLER)

- (0.95 x

., ! NOx allowable emission limit))) +2000 pounds/ton


### Where: -Allowable emission limit= in Ibs.lJvl.:MBtu as shown in Table 1ofthis 

### TradingAgreement and Order.

• FLER= full load emission rate in IbsIMMBtu as shown in Table I of this

Trading Agreement and Order.

• Discount**(.95)~** %5 design margin applied to the allowable limit.



### ii. During the ozone season only(peak day calculation): the maximum actual excess NOx emissions (in 

### lbs) on any ofthe 

### days projected by the Commissionerto be "moderateto unhealthful," ''unhealthful:' or "very unhealthful," divided by 3 and then divided by 13 (with the result in tons): EstimatedDERCs (in tons)**~[(Maximum** estimated excess NOx in Ibs) + 3J +(13Ibsldaylton]


### b. No later than October30 of2003, 

### and 2004 calculate and pennanently retire the DERCs used 

### in thepreceding ozone season as the greater of: i. 

### the actual total excess emissions for the ozone season 

### in tons, as follows:
DERCs (in tons) = {(actual fuel use in MMBtu) x «(FLER)

- (0.95 x NOx allowable emission Iimit))}+ 2000 poundslton OR

### ConnecticutJet PowerLLC 5 

### Trading Agreement and Order No.8J80 A 

### ii. the maximum actual excess NOx emissions (in lbs) on any ofthe 

### days projected 

### by the Commissioner to be "moderate to unhealthful", ''unhealthful'', or "very unhealthful", divided by 3 and then divided by 13 

### (with the result in 

### tons): Actual.pERCs (tons) used [(Actual excess NOx 

### in Ibs) +3J + [13 Ibs/day/ton] 

### As described in 

### Exhibit 1ofthis 

### TradingAgreement and Order, to the extent that DERCs used to offset on peak daybasis exceed the total mass excess emissions, remaining DERCs may beused in the non-ozone season 

### in the same or subsequent years through May I, 2005.**,~** 

### '.J c. 

### During the non-ozone season starting on October 1, 2003: In 

### addition to meeting the 24-houremission limit in 

### Table 22-1 ofSection 22a174-22 ofthe Regulations, meet anon-ozone season emission limit of0.15 IblMMBtu. Priorto October I, 2003 and October I, 2004, CJP shall estimate 

### and acquire sufficient DERCs and/or allowances 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 (Estimated maximum emission rate 

### in IblMMBtu during October I through April 30

- (0.95 x 0.15 IblMMBtu))] + 2000 pounds/ton. 

### d. No later than May 31 of2004, calculate and permanently retire DERCs used in the precedingnon-ozone season as follows: Actual DERCs (tons) [Actual fuel use 

### in MMBtu from October I through April 30

### x (average emission rate in 

### Ib/NUvfBtu during October I through April 30

- (0.95 x 0.15 IblMMBtu))] + 2000 pounds/ton. 3. BDERCs shall only be used by other NOx budget program sources located 

### in Connecticut. 

### BDERCs shall onlybeused to 

### offsetozone season excess emissions, and shall notbeused for compliance during the non-ozone season. BDERCs generated during agiven year shall only beused through the following ozone season. BDERCs are subject to all DERC requirements set forth 

### in this TradingAgreement and Order except for those requirements i 

### pertaining solely to 

### non-ozone season DERCS and as otherwisemay be provided. ,-./Connecticut Jet Power LLC 6 Trading Agreement and OrderNo. 8180 A 4. CJP shall make and keep records of: daily fuel use and fuel type; excess NOx emissions; the nwnber ofDERCs in its possession, created, purchased and used (by serial number if assigned) each month in accordance with the appropriate emission rates and limits in this Trading Agreement and Order; the number ofDERCs used during the ozone season and non-ozone season (the remainder ofthe year); during the ozone season, the ozone classification as forecasted by the Commissioneron the previous day; as well as documentation

### attest~ng to the fact that approved DERCs used during the ozone season were generated during the ozone season. Ge.nerator certification ofthis fact shall be sufficient. CIP shall maintain and submit such records to the Commissioner in accordance with Section 22a-174-22 ofthe Regulations. 5. Record Keepine. CJP shall retain records and supporting documentation as described in this Trading Agreement and Orderfor aminimum offive years, commencing on the date such records were created. CJP shall provide the records specified above to the Commissioner within thirty (30) days ofreceipt ofaVlritten request from the Commissioner. 6. Arumal Emission Statement. No laterthan March I ofevery year after issuance ofthis Trading Agreement and Order, CIP shall include with the Annual Emission Statement provided to the Conunissioner, 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 CJP's possession. CJP shall also include actual NOx emissions from the peaking units 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. These reports shall be on a formprescribedby the Commissioner and shall be in monthly increments. Should CJP choose to discontinue the generation ofDERCs, CJP will notify the Conunissionerupon discontinuance. 7. Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, CJP may use NOx allowances, pursuantto Section**22a~174-22(i)** ofthe Regulations to achieve all or a portion ofthe reductions required by Section 22a-174-22 ofthe Regulations. Any allowance used for compliance with Section 22a-174-22(e) ofthe Regulations shall be subject to all restrictions and/orrequirements applicable to DERCs contained in this Trading Agreement and Order. Each allowance used for compliance with Section**22a~ 174~22**  ofthe Regulations**s~all** be equivalent to one discrete emission reduction credit and shall be deducted from CJP's NOx BudgetProgram compliance account upon such use. Allowances shall be considered used for compliance with Section 22a-174-22 ofthe Regulations when they are transferred from the facility's compliance account or overdraft account to a State ofConnecticutNOx allowance retirement account, account II> CT0000000300 in the NOx Allowance Tracking System.Connecticut Jet Power LLC 7 Trading Agreement 

### and OrderNo. 8180 A



# '-- 8. DERC Doubling. At aminimum, DERCs required shall be adjusted upwards by 

### J00% if DERCs are not in CJP's possession for use priorto the first day ofeach month or applicable season. Howeverbased on the gravity ofthe noncompliznce, the Commissionermay require additional upwards adjustment. 9. Vintage Restriction. Fqrthe purposes ofcompliance with Section 22a-174-22 ofthe Regulations, DERCstallawances shall only remain valid for five (5) calendaryears from the year**o~the** generation/allocation ofsuch DERCs/allowances. DERCs/allowances olderthan five (5) calendar years from their creation/allocation are not valid for use for compliance with Section 22a-174-22 ofthe Regulations. Notwithstanding the above, DERCs/allowances generated/allocated priorto calendar year 2000 are valid foruse for compliance with Section 22a-174-22 ofthe Regulations up to and including December 31, 

### 2004. 10. FLERExceedance. Noncompliance with an established FLER shall subject CJP to make restitution by matching the quantity ofemissions ("true up") caused by the exceedance plus a 100% premium. The true up in tons ofDERCs shall be equal to the FLER exceedance in IbsIMMBtu, multiplied bythe total heat input during the period of noncompliance divided. by 2000 lbs/ton. !ftheperiod ofnoncompliance is not la10wn, 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 Trad.ing Agreement and Order shall affect the Commissioner's authority to institute anyproceeding ortake any other action to require add.itional upward adjustment, based on the gravity ofany alleged noncompliance or violation oflaw. 

### II. FLERModification. FLERs set forth in Table I ofthis Trading Agreement and Order may be modified only afterthe consent ofthe Commissionerbywritten.modification of this Trading Agreement and Order. 

### 12. Emissions Testing. Pursuant to Section 22a-174-22(k) ofthe Regulations, CJP shall conductNOx emission tests ofthe peaking units at least once every five years commencing from the dates ofthe NOx emission tests for the peaking units as provided in 

### Table I ofthis Trading Agreement and Order. 13. Extension. No laterthan May I, 2005, with respectto the peaking units,CJP 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, ifdetermined to be appropriate, the Commissionermay grant awritten extension ofthis Trading Agreement 

### and Order.Connecticut Jet Power LLC 8 Trading Agreement and Order No. 8180 A

". 14. Future Compliance Report. On orbefore September 1, 2004, CJP shall submit a report indicating how the facility shall complywith section 22a·174-22 ofthe Regulations with respect to the Peaking units on and after May I, 2007. 15. Full compliance. eJP shall not be considered in full compliance with this Trading Agreement and Orderuntil all actions required by this Trading Agreement and Ord"erhave been completed as

### aRP~oved and to the Commissioner's satisfaction. 16. Approvals. CJP shall use best efforts to submit to the Commissioner all documents required by this Trading Agreement and Order in a complete and approvable form. 

### Ifthe Commissionernotifies CJP that any document or other action is deficient, and does not approve it with conditions or modifications, it is deemed disapproved, and CJP 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 orother action under this Trading Agreement and Order, the Commissionermay approve the docwnent or other action as submitted or perfonned orwith such conditions ormodifications as the Commissioner deems necessary to cany out the purposes ofthis Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance or delay. 17. Definitions. As used 

### in this Trading Agreement and Order, "Commissioner" means the Commissioner ofEnvironmental Protection or an agent ofthe Commissioner. "Ozone season" means the period from May 1 through September 30 in any given calendaryear. The date of"issuance" ofthis Trading Agreement and Order is the date the Trading Agreement and Orderis deposited in the U.S. mail orpersonally delivered, whichever is earlier. 18. Dates. The date ofsubmission to the Commissioner ofany document required by this Trading Agreement and Order shall be the date such docwnent is received by the COID.1T'jssioner. The date ofany notice by the Commissionerunder this Trading Agreement and Order. including but not limited to notice ofapproval or disapproval of any document or other 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 Order means calendar day. Any document or action which is required by this Trading Agreement and Orderto be submitted orperformed by a date 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 19. 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 CJP or, if

### elFis not an individual, by CJP's chiefexecutive officer or aConnecticut Jet Power LLC 9 Trading Agreement and Order No. 8180 A



# () officer or a duly authorized representative ofsuch officer, as those terms are defined in Section 22a-430-3(b)(2) ofthe Regulations, and by the individual(s) responsible for actuallypreparing such document, and 

### eJP or CJP's chiefexecutive officer and each such individual shall certify in writing as follows: "I have personally examined and am familiar with the information submitted in this document and all atta6hments thereto, and I certify, based on reasonable investigation, including my inquiry ofthose individuals responsible for obtaining the information, that the submitted information is true, accurate and complete to the best ormy knowledge 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 law." 20. Noncompliance. This Trading Agreement and Order is a final orderofthe Commissioner with respect to the matters addressed herein, and is nonappealable and immediately enforceable. Failure to comply with this Trading Agreement and Ordermay subject CJP to an injunction and penalties. 21. False statements. Any false statementin any information submitted pursuant to this Trading Agreement and Order is punishable as a criminal offense under Section 53a-157b ofthe Connecticut General 'Statutes and any other applicable law. 22. Notice oftransfer: liability ofCJP and others. Until CJP has fully complied with this Trading Agreement and Order, CJP shall notify the Commissioner 

### in writing no later than fifteen (IS) days aftertransferring all or anyportion ofany ofthe facilities, the operati.ons, th,e sites or the businesses which are the subject ofthis Trading Agreement and Order or after obtaining a new mailing or location addresses. CJP's obligations under this Trading Agreement and Order shall not be affected by the passage oftitle to any property to any otherperson or municipality. 23. Commissioner's powers. 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 oflaw, prevent or abate pollution, recovercosts and natural resource damages, and to impose penalties for past, present, or future violations oflaw. 

### Ifat any time the Commissioner determines that the actions taken by CJP pursuant to this Trading Agreement and Order have successfully corrected all violations, fully chaIacterized the extent or degree ofanypollution, or successfully abated or prevented pollution, the Commissioner may institute any proceeding to require ClP to undertake further investigation or further action to prevent or abate violations or pollution. 24. (]P'S obligations under law. otbing in this Trading Agreement and Order shall relieve CJP ofother obligations under applicable federal, state and local law.Connecticut Jet Power LLC 10 Trading Agreement and Order No. 8180 A


# ,- 

# -,.

26.

27.



### 28. No assurance bv Commissioner. No provision ofthis Trading Agreement and Order and no action or inaction by the Commissioner shall be construed to constitute an assurance by the Commissionerthat the actions taken by CJP pursuant t9 this Trading Agreement and Order

### will result in compliance orprevent or abate pollution. Access to facility
. .

# ¥Jrepresentative ofthe Department ofEnviromnental Protection may enter any ofthese facilities withoutpriornotice for the purposes ofmonitoring and enforcing the actions required or allowed by this Trading Agreement and Order. No effect on riehts ofotherpersons. This Trading Agreement and Orderneither creates nor affects anyrights ofpersons or municipalities that are not parties to this Trading Agreement and Order. No Creation ofPropenv Rililits. This Trading Agreement and Order does not create any propertyrights with respect to these DERCs.**~,** 

### ':"'7 29. Notice to Commissioner ofchanges. Within fifteen (15) days ofthe date CJP becomes aware ofachange in any infonnation submitted to the Corrunissionerunder this Trading Agreement and Order, orthat any such infonnation was inaccurate ormisleading orthat any relevant information was omitted, CJP shall submit the correct or omitted infonnation to the Commissioner. 30. Notification ofnoncompliance. In the event that CJP becomes aware that it did not or maynot comply, or did not or may not complyon time, with anyrequirement ofthis Trading Agreement and Orp.erorofanydocumentrequired hereunder, CJP shall immediatelynotifyby telephone the individual identified in the next paragrapb and shall take all reasonable steps to ensure that anynoncompliance or delay is avoided or, if unavoidable, is minimized to the greatest extentpossible. Within five (5) days ofthe initial notice, CJP shall submit 

### in writing the date, time, and duration ofthe noncompliance and the reasons for thenoncompliance ordelay and propose, forthe review and written approval ofthe Commissioner, dates by which compliance will be achieved, and CJP shall comply with any dates which maybe approved in writing by the Commissioner. Notification by CJP shall not excuse noncompliance ordelay, and the Commissioner's approval ofanycompliance dates proposed shall not excuse noncompliance or delay unless specifically so stated bythe Commissioner in writing. 31. Submission ofdocwnents. Any document required to be submitted to the Commissioner under this Trading Agreement and Order shall, unless otherv.rise specified in this Trading Agreement and Order or in writing by the Commissioner, be directed to:

### Connecticut Jet Power LLC 11 

### TradingAgreement and OrderNo. 8180 A Mr. 

### Michael LaFleur DepartmentofEnvirorunental Protection Bureau ofAir Management Compliance and Field Operations Division Emissions and Credit Trading Section 

### 79 Elm Street
. Hartford, CTQ6\06

### ConnecticutJet Power LLC 

### 12 Trading Agreement and Order No. 8180 A 

### CJP consents to the issuance ofthis Trading Agreement and Orderwithout funher notice. The

. undersigned certifies that he/she is fully authorized to enterinto this Trading Agreement and

Order and to legallybind CJP to the tenns and conditions ofthe Trading Agreement and Order. COIUlecticutJet PowerLLC Signature

# =er~ Name' 

# =n;c; L.

# =

Title

# R~tJntU (f}flf1t7§Br Date: 

# 4- t:rC;3
Issued as afinal orderofthe CommissionerofEnvironment

# _-!-Il~fM=·!...I"'::Z="::;~I-I ' 2003. 

# /.".) .-..,i



### CITY OFBRA."IFORD LAND RECORDS MAILED CERTJFIED MAlL,
. RETURN RECElPT REQUESTED CenifiedDocumentNo. CITY OF GREENWICH LAND RECORDS MAILED CERTJFIED MAlL, RETURN RECElPT REQUESTED Certified Document '0. 

### CITY OFTORRINGTONLAND RECORDS MAILED CERTJFIED MAIL, RETURN RECElPT REQUESTED I 

### Certified DocumentNo
.


### ........