Reserved. TRADING AGREEMENT AND ORDER MODIFICATION TRADING AGREEMENT AND ORDER NO. 8183A MODIFICATION NO.2

(i) 

### At all 

### times: Before the first day ofeach month, MPLLC shall estimate DERCs required for such month for the peaking units as follows: Until May 1,2009, before the first day ofeach month MPLLC shall have in its possession sufficient approvedDERCs for the current day for the peaking units based on the following calculations;

(Printed on Recycled Paper) 79 Elm Street • Hartford. CT 06106-5127 An Equal Opportunity Employer EstimatedDERCs (in tons) use:: [«FLER in IbslMMBtu)

- (0.95 x NOx allowable rate in IbsIMMBtu» x (estimated fuel use in MMBtu)] -:- 2000 poundslton This Trading Agreement and Order supersedes Trading Agreement and Order 8183 issued on January 12,2000. 

# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

3. Delete the date April 30, 2007 and substitute therefor May 1, 2009, in paragraphs A.6. and C.I. 4. Delete paragraphs C.2.a. and substitute the following therefor: 1. Delete paragraph A.I. and substitute the following therefor:

2. Delete paragraph A.5. and substitute the following therefor: WHEREAS, the Commissionerand MPLLC, having agreed to the terms and conditions set forth in Trading Agreement and OrderNo. 8183A signed by the Commissioneron April 22, 2003, and Trading Agreement and Order 8183A Modification I issued March 21, 2005 do now, by mutual agreement, modify said Trading Agreement and Order No. 8183A as follows: AND MONTVILLEPOWER LLC

In the matter ofaTrading Agreement and Orderbetween the CommissionerofEnvironmental Protection ("Commissioner") and Montville PowerLLC ("MPLLC"). STATE OFCONNECTICUTMontville PowerLLC 2 Trading Agreement and Order No. 8183A Modification No.2

No laterthan the twentieth day ofeach month, MPLLC shall calculate and permanently retire DERCs used in the preceding calendarmonth, as follows: Actual DERCs (in tons)

# =[((FLER in IbslMMBtu)

- (0.95 x NOx allowable rate in Ibs/MMBtu)) x (actual fuel use in MMBtu)] -;- 2000 pounds/ton Where:
• NOx allowable rate = allowable limit rate in IbslMMBtu shown in Table I of this Trading Agreement and Order.
• FLER

## =full load emission rate in IbslMMBtu as shown in Table I ofthis Trading Agreement and Order.
• Discount (0.95)

# =5% design margin applied to the allowable limit rate. ii) During the ozone season only: No laterthan December 31 steach year, MPLLC shall acquire and permanently retire seven ozone season DERCs for every actual ton ofexcess NOx emitted from the peaking units during the previous ozone season based upon the actual emissions for each day that Connecticut one hourozone levels were forecasted to be "moderate to unhealthful", "unhealthful", or "very unhealthful", until such time that the EPA revokes the I-hour standard. Upon such revocation, MPLLC shall calculate and permanently retire seven ozone season DERCs for every actual ton ofexcess NOx emittedfrom the peaking units during such ozone season based upon the actual emissions for each day that Connecticut eight hour ozone levels were forecasted to be "moderate to unhealthy for sensitive groups", "unhealthy for sensitive groups", "unhealthy", or "very unhealthy". Where: Actual ton ofexcess NOx emitted 

### = [((FLER in IbslMMBtu)

- (0.95 x NOx allowable rate in IbslMMBtu)) x (actual fuel use in MMBtu)] -;- 2000 pounds/ton The total actual tons ofexcess NOx emitted from the peaking units during forecasted ozone exceedance days shall be multiplied by seven and then rounded to the next greaterwhole ton, to determine the number ofDERCs to be permanently retired. This requirement is in addition to the MPLLC's requirement to estimate excess emissions and subsequentpermanentretirement ofa sufficient number ofapproved DERCs in accordance with paragraph C.2.a.(i) ofthis Trading Agreement and Order.

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Montville PowerLLC 3 Trading Agreement and Order No. 8183A Modification No.2

5. Delete paragraphs C.2.b. and substitute the following therefor: Reserved. 6. Delete paragraph C.5. and substitute the following therefor: Annual DERC Report. No laterthan March 1 ofevery year afterissuance ofthis Trading Agreement and Order, MPLLC shall submit in writing to the Commissioner, arecord ofeach sale orothertransfer ofDERCs for the previous calendar year. MPLLC shall also include actual NOx emissions from the peaking units and the amount ofall DERCs used (including serial numbers (ifassigned) and DERCs purchased from otherfacilities). These reports shall be on forms prescribed by the Commissionerand shall be in monthly increments, and by ozone and non ozone seasons. 7. Delete paragraph C.6. and substitute the following therefor: Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, MPLLC may use NOx allowances, until May 1,2009, for the peaking units pursuant to Section 22a-174-22U) ofthe Regulations to achieve all or aportion of the 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 containedin this Trading Agreement and Order;
a. In orderfor MPLLC to use NOx allowances, MPLLC shall create ageneral account or use an existing compliance account oroverdraft account in EPA's NOx Allowance Tracking System ("NATS"); and b. Each allowance used for compliance with Section 22a-174-22 ofthe Regulations shall be equivalent to one discrete emission reduction credit. Allowances shall be considered used for compliance with Section 22a174-22 ofthe Regulations when they are transferred from the facility's NOx general account in the NATS orthe facility's NOx compliance account in the NATS to the CT State NOx Retirement Account (Account ill CT0000000300 in the NATS). 8. Delete paragraph C.7. and substitute the following therefor: DERC Shortfall. At a minimum, DERCs required shall be adjusted upwards byMontville PowerLLC 

### 4 Trading Agreement and Order No. 8183AModification No.2 100% ifDERCs are not in MPLLC's possession for use priorto the first day of each month or applicable season. However, nothing in this Trading Agreement and Order shall affect the Commissioner's authority to institute any proceeding or take any other action to require additional upward adjustment, based on the gravity ofany alleged noncompliance orviolation oflaw. MPLLC shall permanently retire the quantity ofDERCs equivalent to the excess emissions plus a 100% premium within sixty (60) days ofMPLLC's discovery ofthe DERC shortfall. MPLLC shall certify andreport any such DERC retirementto the Commissionerin accordance with paragraph C.29. ofthis Trading Agreement and Order. 9. Delete paragraph C.9. and substitute the following therefor: FLER Exceedance. Noncompliance with an establishedFLER shall subject MPLLC to make restitution by matching the quantity ofemissions ("true up") causedby the exceedance plus a 100% premium. The true up in tons ofDERCs shall be equal to the FLER exceedance in IbslMMBtu, multipliedby the total heat inputduring the period ofnoncompliance divided by 2000 lbs/ton. Ifthe period ofnoncompliance is not known, the time period from the completion ofthe last/previous Commissionerwitnessed emission testthrough the date the FLER compliance is achieved as approvedby the Commissioner shall be used. However, nothing in this Trading Agreement and Order shall affect the Commissioner's authority to institute any proceeding ortake any other action to require additional upward adjustment, based on the gravity ofany alleged noncompliance orviolation oflaw. MPLLC shall permanently retire DERCs calculated in accordance with the above plus a 100% premium within sixty (60) days ofMPLLC's discovery oftheFLER exceedance. MPLLC shall report any FLER exceedance to the Commissionerin accordance with paragraph C.29. of this Trading Agreement and Order. 10. Delete paragraph C.12. and substitute the following therefor: Extension. No laterthan May 1, 2009, with respect to the peaking units, MPLLC shall comply with the requirements ofSection 22a-174-22(d)(1) ofthe Regulations. There is no assurance thatthe Commissionerwill grant a written extension ofthis Trading Agreement and Order. 11. Delete paragraph C.13. and substitute the following therefor: Future Compliance Report. On orbefore September 1, 2008, MPLLC shall submit areport in writing to the Commissioner, as directed in paragraph C.30. of15. Delete the name "Mr. Michael Lafleur" in paragraph C30. 13. Delete paragraph C17. and substitute the following therefor: 12. Delete paragraph C16. and substitute the following therefor: Trading Agreement and Order No. 8183A Modification No.2 5

this Trading Agreement and Order, indicating how the facility shall comply with Section 22a-174-22 ofthe Regulations with respect to the peaking units on and after May 1,2009.

Dates. The date of"issuance" ofthis Trading Agreement and Orderis the date the Trading Agreement and Order is deposited in the U.S. mail orpersonally delivered, whichever is earlier. The date ofsubmission to the Commissionerof any 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 orotheraction, shall be the date such notice is deposited in the U.S. mail oris personally delivered, whichever is earlier. Except as otherwise specifiedin this Trading Agreement and Order, the word "day" as used in this Trading Agreement and Ordermeans calendarday. Any document or action which is requiredby this Trading Agreement and Order to be submittedorperformed by adate which falls on a Saturday, Sunday or a Connecticut orfederal holiday shall be submitted orperformed by the next day which is not a Saturday, Sunday orConnecticut orfederal holiday. Definitions. As used in this Trading Agreement and Order, "Approved DERCs" are those for which the Commissionerhas provided written authorization for use in compliance with Section 22a-174-22 ofthe Regulations; "Commissioner" means the Commissioner or arepresentative ofthe Commissioner; "Non-ozone season" means the period from October 1 through April 30 in any given calendar year; "Ozone season" means the period May 1 through September30 in any given calendaryear.

14. Delete the word "individual" and substitute therefore the word "Section" in paragraph C29.

All otherterms and conditions ofTrading Agreement and Orderno. 8183A and Modification 1 issued by the Commissioneracting underChapter446c, Sections 22a-6, 22a-171, 22a-174, 22a176, and 22a-177 ofthe Connecticut General Statutes shall remain in effect. Montville PowerLLC

# ..
Montville PowerLLC 

### 6 Trading Agreement and Order No. 8183A Modification No.2
MPLLC hereby consents to the entry ofthis modification to the Trading Agreement and Order without further notice.
Signature: Type Name: Type Title: Date: Montville PowerLLC

# -!£f~ Stanley Saska Operations and Maintenance Manager 

## (;-'23-0(;

Issued as a modification ofan Orderofthe CommissionerofEnvironmental Protection.

Date

MAILED CERTIFIED MAIL, RETURN RECEIPT REQUESTED Certified Document No.