SIP DESCRIPTION

- Algonquin Windsor Locks LLC-Trading Agreement and Order No. 8261 I. SIP

- DESCRIPTION OF DERC CREATION AND/OR USE SIP SUMMARY TABLE T"radine: Ae:recment and Order No. 8261 Algonquin Windsor Locks LLC 26 Canal Bank Road Windsor Locks 06096 Identifier 

# I Client 8095 Town # 213 Premise # 

### 1 

# ISequence # 

### 1 Contact Mr. James White Tel: (860) 627-6616 Fax (860) 623-4206 Plant Manaeer Pollutant and Regulatory Standard: NOx Section 22a·174-22 ofthe Regulations of Connecticut State Agencies. Nonattainment Area Classification Severe Annual DERCs needed Estimated 0 Comoliance Time Period Until Amil 30. 2007. Max. Emission Rate: full load emission rate (FLER Use. (See Table I below);



# . Table 1 NOx Emission Rates and Allowable Limits -Unit Fuel Maximum Stack Test FLER Allowable Date of Next PIR number Capacity (ppmvd) IbslMMBtu Rate Stack Stack MMBtufhr IbsIMMBtu Test Test Due GE Cogen Nat gas 530 CEM CEM .15 NA NA

Turbine #2 fuel P-213-0029

II. SPECIAL REQUIREMENTS

a. Calculations ofcredits used shall be as specified in Trading Agreement and Order No. 8261.

# ~~ ..... 

### .,

# ... 

# ........... STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In 

### the maner of The State ofConnecticut and Algonquin PowerWindsorLocks LLC ) ) ) ) ) Trading Agreement and Order No. 8261



### Whereas, the Commissioner ofEnvironmental Protection ("Commissioner") and Algonquin PowerWindsor Locks LLC ("Algonquin") agree that itis 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 ("DERen) trading to reduce nitrogen oxide ("NOxt» emissions will achieve this result in a timely and cost-effective manner.. A. At the request and with the agreement ofAlgonquin, the Commissionerfinds the following: 1. Algonquin owns and operates one cogeneration facility at 26 Canal BankRoad, Windsor Locks, Connecticut ("facility"). 2. At the facility, Algonquin operates fuel burning equipment, consisting ofone 56 megawan GE PB6541(B) cogeneration turbine, Connecticut Permit Number 213-0029**('~urbine")** which is subject to Section 22a-174-22 ofthe Regulations ofConnecticut State Agencies ("Regulations") penaining to the control ofNOx emissions. The turbine operates on natural gas orNo.2 fuel oil. A. continuous emissions monitor ("CEM") certified to 40 Code ofFederal Regulations ("CFR") Part 75 measures NO. emissions from the turbine. 3. When operating the turbine,Algonquin sometimes exceeds the NOx allowable emission rate limit specified in Section 22a-174-22(e)(3) ofthe Regulations. 4. Pursuant to Section 22a-174-22(j) ofthe Regulations, during the non-ozone season, Algonquin intends to acquire approved DERCs until May I, 2007 for the turbine at the facility. 5. On November 13, 2003, Algonquin Windsor Locks LLC changed its name to Algonquin Power WindsorLocks LLC.

, r Pnn(,·tJ on**R':~'y<:lctJ** Pap.:. I**1~** f-:lm Srr

...·( • Harllu,tJ. C'T IIfllOtl·**~1!1**

### Algonquin PowerWindsor Locks LLC Trading Agreement and Order No. 8261 

### B. The Commissioner, in accordance with the provisions ofthis Trading Agreement and Order, pursuant to Section 22a-174-22(d)(3) ofthe Regulations, hereby allows Algonquin to comply with Section 22a-174-22(d)(2) ofthe Regulations through use ofDERC trading. 

## c. With the agreement ofAlgonquin, the Conunissioner, acting under Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a-177 ofthe Connecticut General Statutes, hereby 

### orders Algonquin as follows: 1. Upon issuance ofthis Trading Agreement and Order, at the facility, Algonquin shall comply with Section 22a-174-22 ofthe Regulations through emission reduction trading. 

### Until Algonquin achieves pennanent compliance with the emission standard in Section 22a-174-22(e) ofthe Regulations orby May 1,2007, whichever occurs earlier:

a. Algonquin shall use approved DERCs as required under this Trading Agreement and Order; and

. 

### b. Algonquin shall have in its 

### possession sufficient approved DERCs to meet applicable NOx emission limits as allowed underthis Trading Agreement and Order. 2. DERC use. Starting on October I, 2004, and until May I, 2007, before the first day 

### ofeach non-ozone season. Algonquin shall have in its possession sufficient approved DERCs for the turbine based on the following:



### a During the non-ozone season: Algonquin shall meet anon-ozone seasonal average emission limit of0.15 IbslMMBtu. Prior to October I, 2004, October I, 2005 and October I, 2006, Algonquin shall estimate and acquire the amount ofDERCs or 

### allowances required for such non-ozone 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 (estimated seasonal average 

### NOx emission rate in IbsJM:MBtu during October 1 through April 30

- (0.95 x 0.15 lbslMMBtu»] .;- 2000 pounds/ton. No later than May 31, 2005, May 31, 2006, and May 31, 2007, when the turbine 

### has anon-ozone seasonal average actual NOx emission rate exceeding 0.15 IbslMMBtu, Algonquin shall calculate and permanently retire the amount of 

### DERCs used in the preceding non-alone season as follows:

2



### ••. . IAlgonquin Power Windsor Locks LLC Trading Agreement and Order No. 8261 Actual DERCs (tons) 

### = [Actual fuel use in MMBtu from October I through 

### April 30 x (actual seaso'nal 

### average NOx. emission rate in IbsIMMBlU during October 

### I through April 30

- (0.95 x 0.15 IbslMMBtu»] .;. 2000 pounds/ton. 

### b. When the non-ozone season CEM-recordedNOx emission rate is used to calculate DERCs used by the turbine, Algonquin shall include missing data 

### calculated in accordance with missing 

### data substitution procedures under40 CFR Pan 75.



### c. Algonquin shall not exceed any NOx pennit 

### limitations for the turbine. 3. Algonquin shall make and keep records for the turbine of: non-ozone season fuel use and fuel type; 

### non-ozonc season NOx emission rates, numberofoperating hours pernon-ozone season, the number ofinvalid datahours of

# the total operating hours per non-ozone season; the numberof

### nERCs in its 

### possession, purchased and used (by 

### serial numberifassigned) each non-ozonc season in accordance with the appropriate emission rates and limits in this Trading Agreement and Order. Algonquin shall maintain and submit such records in accordance with Section 22a174-22 ofthe Regulations. 

### 4. Record Keeping. Algonquin shall retain records and supporting documentation 

### as described in this Trading Agreement and Orderfor a minimum oflive years, 

### commencing on the date 

### such records were created. Algonquin shall provide the records specified above to the Commissionerwithin thirty (30) days ofreceiptofa written request from the Commissioner. 5. Reporting. No later than July 30 ofevery year after issuance ofthis Trading 

### Agreement and Order, Algonquin shall submit in writing to the Commissionerthe non-ozone season fuel consumption and amount ofall 

### nERCs used (including serial numbers (ifassigned) and approved DERCs purchased from other facilities), for the turbine during the previous Octoberthrough April time period. These reports shall be 

### on aform prescribed by the Commissioner. 6. Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, Algonquin may use NOx allowances, pursuant to Section 22a-174-22(j) ofthe Regulations to achieve all or a portion ofthe reductions required by Section 22a174-22 ofthe Regulations. Any allowance used for compliance with Section 22a174-22(e) ofthe Regulations shall be subject to all restrictions andlor requirements applicable to DERCs contained in this Trading Agreement and Order. Each allowance used for compliance with Section 22a-174-22 ofthe Regulations shall be 

### equivalent to one discrete emission reduction credit and shall be 

### deducted from 3Algonquin PowerWindsor Locks LLC Trading Agreement and Order No. 8261 

### Algonquin's NOx Budget Program 

### compliance account upon such use. Allowances shall be considered used forcompliance with Section 22a-174-22 ofthe Regulations 

### when they are transferred from the facility's compliance account or overdraft account to aState ofConnecticutNOx allowance retirement account, account II) CT0000000300 in the NO, Allowance Tracking System. 7. DERC Shortfall. At a minimum, DERCs required shall be adjusted upwards by 100% ifDERCs are not in Algonquin's possession for use priorto the first day of 

### each non-ozone season. However, nothing in this Trading Agreement and Order shall affect the Commissioner's authority to institute any proceeding ortake any otheraction to require additional upward adjustment, based on the gravity 

### ofany alleged noncompliance or violation oflaw. Algonquin shall pennanently retire the quantity ofDERCs equivalent to the excess emissions plus a 100% premium within sixty (60) days ofAlgonquin's discovery ofthe DERC shortfall. Algonquin shall 

### certify and repoI1 any such DERC retirement to the Commissioner in accordance with paragraph C.26 ofthis Trading Agreement and Order. 8. Vintage Restriction. Forthe purposes ofcompliance with Section 22a-174-22 ofthe Regulations, DERCsiallowances shall only remain valid for five (5) calendar years from the year ofthe generation/allocation ofsuch DERCsiallowances. 

### DERCslallowances generated/allocated more than five (5) calendar years ago are not valid for use for compliance with Section 22a-174-22 ofthe 

### Regulations. Notwithstanding the above the DERCsiallowances generated/allocated priorto calendar year 2000 shall be valid for use until December 31,2004. 

### 9. Extension. No later than May I, 2007, with respect to the turbine, Algonquin shall comply with the requirements ofSection 22a-174-22(d)(2)(A) ofthe Regulations. 

### There is no assurance that afterfull program review ofthis and other Trading Agreements and Orders that the Commissioner will grant awritten extension ofthis Trading Agreement and Order. 10. Future Compliance Report. On orbefore September I, 2006, Algonquin shall 

### submit areport in writing to the Commissoner, as directed 

### in paragraph C.27. ofthis Trading Agreement and Order, indicating how the facility shall comply with Section 22a-174-22 ofthe Regulations with respect to the turbine on and afterMay 1,2007. II. Algonquin shall notify the Commissioner at least thirty (30) days priorto any 

### subsequent name changes. 12. Full compliance. Algonquin shall not be 

### considered in full compliance with this Trading Agreement and Order until all actions required by this Trading Agreement 

### and Order have been completed as approved and to the Commissioner's satisfaction. 4 

# r:,

# n

" " Algonquin PowerWindsorLocks LLC Trading Agreement and Order No. 8261



### ,. 13. Approvals. Algonquin shall use best efforts to submit to the Commissioner all documents required by this Trading Agreement and Orderin a complete and 

### approvable form. If

### the Commissioner notifies Algonquin that any document or otheraction is deficient, and docs not approve it 

### with conditions ormodifications, it 

### is deemed disapproved, and Algonquin shall correct the deficiencies and resubmit it within the time specified 

### by the Commissioneror, 

### ifno time is specified 

### by the Commissioner, within 30 days ofthe Commissioner's notice ofdeficiencies. In 

### approving any document orotheraction underthis Trading Agreement and Order. the Commissionermay approve the document orother action as submitted or performed or with such conditions ormodifications as the Commissionerdeems necessary to carry out the purposes ofthis Trading Agreement and Order. Nothing 

### in this paragraph shall excuse noncompliance ordelay. 14. Definitions. As used in this Trading Agreement and Order, "ApprovedDERCs" are 

### those for which ¢e Commissionerhas provided written authorization for use in compliance with Section 22a-174-22 ofthe Regulations; "Commissioner" means the 

### Commissioneror arepresentative ofthe Commissioner; "Non-ozone season" means the period from October 1 through April 30 in any given calendaryear. 

### 15. Dates. 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, whicheveris earlier. The date ofsubmission to the Commissionerofany document required by this Trading Agreement and Order shall be the date such document is 

### received by the Commissioner. The date ofany notice by the Commissionerunder 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 oris personally delivered, whicheveris 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 or performed by a date which falls on a Saturday, Sunday or a Connecticut orfederal holiday shall be submitted orperformedby the next day which is not a Saturday, 

### Sunday or Connecticut orfederal holiday. 16. Certification ofdocuments. Any document, including butnot limited to any notice, which is required to be submitted to the Commissionerunderthis Trading Agreement and Order shall be signed by Algonquin or, ifAlgonquin is not an individual, by an individual who is an authorized representative ofAlgonquin, in accordance with Section 22a-174-2a(a) ofthe Regulations ofConnecticut State Agencies, and by the individual(s) responsible for actually preparing such 

### document, and each such individual shall certify in writing as follows:

5Algonquin Power Windsor Locks liC Trading Agreement and OrderNo. 8261 

## "r have personally examined and am familiar with the information submitted in this document and all attachments thereto, and Icertify, 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 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 ConnecticutGeneral Statutes and any other applicable law." 17. 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 

### Ordermay subject Algonquin to an injunction and penalties. 18. False statements,.Any 

### false statement in any information submitted pursuant to this Trading Agreement and Order is punishable as acriminal offense under Section 53a-157b ofthe Connecticut General Statutes and any other applicable law. 19. Notice oftransfer; liability ofAlgonquin. Until Algonquin has fully complied with this Trading Agreement and Order, Algonquin shall notify the Commissioner in writing no laterthan 15 days aftertransferring all or any portion ofthe facility, the 

### operations, the site orthe business which is the subject ofthis TradingAgreement and Orderor after obtaining anew mailing or location address. Algonquin's obligations under this Trading Agreement and Order shall not be affected by the passage oftide to any property to any other person ormunicipality. 20. Commissioner's powers. Nothing in this Trading Agreement and Order shall affect 

### the Commissioner's authority to institute any proceeding ortake any otheraction to prevent orabate violations oflaw, preventorabate pollution. recovercosts 

### and natural resource damages. and to impose penalties for past, present, or

### future violations oflaw. If at 

### any time the Commissionerdetermines that the actions taken by Algonquin'pursuant to this Trading Agreement and Orderhave not successfully corrected all violations, fully characterized the extent ordegree 

### ofany pollution. or successfully abated orprevented pollution. the Commissionermay institute any proceeding to require 

### Algonquin to undertake further investigation orfurther action to prevent orabate violations orpollution. 21. 

### Algonquin's obligations under law. Nothing in this Trading Agreement and Order ,shall relieve Algonquin ofotherobligations under applicable federal, state and local 

### law.

6Algonquin Power Windsor Locks LLC Trading Agreement and OrderNo. 8261 

### 22. No assurance 

### by Commissioner. No provision ofthis Trading Agreement and 

### Orderand no action or inaction 

### by the Commissioner shall 

### be construed to constitute an assurance by the Commissionerthat the actions taken by Algonquin 

### pursuant to this Trading Agreement and Orderwill result in compliance orprevent or abate pollution. 23. Access to facility. Any representative ofthe 

### Department ofEnvironmental 

### Protection may entcrthe facility without priornotice for the purposes ofmonitoring and enforcing the actions required or allowed by this Trading Agreement and Order. 24. No effect on rights ofotherpersons. This Trading Agreement and Orderneither 

### creates noraffects any 

### rights ofpersons ormunicipalities that are not parties to this Trading Agreement and Order. 25. No Creation ofProoertv Rights. This Trading Agreement and Order does oot create any property rights with respect to these DERCs. 26. Notice to Commissionerofchanges. Within IS days ofthe date Algonquin 

### becomes aware ofachange 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, Algonquin shall submit the correct oromitted infonnation to the Commissioner. 27. Notification ofnoncompliance. In 

### the event that Algonquin becomes aware that it did not ormay not comply, ordid not or may notcomply on time, with any requirement ofthis Trading Agreement and Order orofany document required hereunder, Algonquin shall immediately notify by telephone the Section identified 

### in the next paragraph and shall take all reasonable steps to ensure that any noncompliance ordelay is avoided or, ifunavoidable, is minimized to the greatest extent possible. Within five (5) days ofthe initial notice, Algonquin 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 Algonquin shall comply with any dates which may be approved in writing by the Commissioner. Notification by Algonquin shall not excuse noncompliance or delay, and the 

### Commissioner's approval ofany compliance dates proposed shall notexcuse noncompliance ordelay unless specifically so stated by the Commissionerin writing. 

### 28. Submission ofdocuments. Any document required to be submitted to the Commissioner under this Trading Agreement and Order shall, unless otherwise

7Algonquin Power WindsorLocks liC Trading Agreement and OrderNo. 8261 

### specified in this Trading Agreement and Order or in writing by the Commissioner, be directed to: 

### Department ofEnvironmental Protection Bureau ofAir Management Emissions and CreditTrading Section 79 Elm Street Hartford, Connecticut 06106-5127 

### Algonquin consents to the issuance ofthis TradingAgreement and Order without further notice. The undersigned 

### certifies that helshe is fully authorized to enterinto this Trading Agreement and Order and to legally bind Algonquin to the tcnns and conditions ofthe Trading Agreement and Order.

.ndsor Locks liC 

### Signature: Type Name: James A. White Type Title: 

### Plant Manager 

# (}
Date: April 

### 8, 2005



### Issued as an Orderofthe CommissionerofEnvironmental Protection.

Gin.McCarthy 

### Commissioner.

Mi\.LLJ:JJ 

### CERTIFIED MAll.., 

### RETURN RECEIPT REQUESTED
Certified Document No. 7002 2030 0007 9636 0991

8 

### Date