SIP DESCRIPTION Connecticut Jet Power LLC Tradine A2reement and Order

No. 8180A Modification 1

I. SIP - DESCRIPTION OF DERC CREATION ANDIOR USE

SIP SUMiViARY TABLE

Tradino Aoreement and Order No. 8180A

Connecticut Jet Power Mill #30 Inland Road Versailles cr 06383

P.O. Box 238

Identifier Client 7741 Towns # 67 Premises # 11 Sequences # §

183 24

ill. 43 1

14 14 I

Contact Ms. Cynthia Karlic Tel: (860) 343-6962 Fax (860) 343-6969

Recional Mana2er

Pollutant and Regulatory Standard: NOx Section 22a-174-22 ofthe Regulations of

Connecticut State A2encies.

Nonattainment Area Classification I Serious to Severe

Annual DERCs needed Estimated 5 ozone and I non-ozone each turbine.

Comoliance Time Period Until Aoril30. 2007.

Max. Emission Rate: full load emission rate rFLER) for Use. (See Table I below)

- Table 1

NOx Emission Rates and Allowable Limits

Unit Fuel Maximum Stack Test FLER Allowable Date of Next

PIRNumber Capacity (ppmvd) IbslMMBtu Rate Stack Stack

(all PWFT4A-8 MMBtulbr IbslMMBtu Test Test Due

rurbines)

Branford -10 #2 oil 256 184 0.80 0.29 9/6101 9/6106

R·8

Greenwich-IO #2 oil 256 193 0.80 0.29 8/22/01 8122/06

R-52

Greenwich-II #2 oil 256 144 0.80 0.29 8/23/01 8123/06

R·53

Greenwich-12 #2 oil 256 182 0.80 0.29 8123/01 8123/06

R-54

Torrington-IO #2 oil 256 194 0.80 0.29 4/20101 4120106

R-67

Torrington-I 0 #2 oil 256 197 0.80 0.29 4119/01 4119/06

R·68

SIP DESCRIPTION Connecticut Jet Power LLC Trading Agreement and Order

No. 8180A Modification 1

II. SPECIAL REQUIREME TS

a. This Trading Agreement and Order Modification supersedes Trading Agreement and

Order No. 8180A issued on April 23, 2003.

b. Calculations of credits used shall be as specified in Trading Agreement and Order No.

8180A.

c. Connecticut Jet Power LLC shall acquire and pennanently retire seven ozone season

DERCs for every actual ton of excess NOx emitted from the peaking unit during the

previous ozone season based upon the actual emissions for each day that Connecticut

one hour ozone levels were forecasted to be "moderate to unhealthful", "unhealthful", or

"very unhealthful".

STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

STATE OF CONNECTICUT

AND

CONNECTICUT JET POWER liC

TRADING AGREEMENT AND

ORDER NO. SISOA

MODIFICATION NO. I

TRADING AGREEMENT AND ORDER MODIFICATION

In the malter of a Trading Agreement and Order between the Commissioner of Environmental

Protection ("Commissioner") and Connecticut Jet Power ue ("CJP").

WHEREAS, the Commissioner and CJP, having agreed to the terms and conditions set forth

in Trading Agreement and Order No. 8I8DA signed by the Commissioner on April 22, 2003, do

now, by mutual agreement, modify said Trading Agreemem and Order as follows:

1. Delete paragraph A.6. and substitute the following therefor:

Reserved.

2. Delete the date May I, 2005, and substitute therefor May 1, 2007, in paragraphs

A.7. andC.L

3. Delete paragraph C.2.a. and substitute the following therefor:

Until May I, 2007, before the first day of each month CIP shall have in its

possession sufficient approved DERCs for the current day for the peaking units

based on the following calculations;

Before the first day of each month, CIP shall estimate DERCs required for such

month for the peaking units as follows:

(i) At all times:

Estimated DERCs (in tons) use = [«(FLER in IbsIMMBtu) - (0.95 x NOx

allowable tate in IbsIMMBtu)) x (estimated

fuel use in MMBtu)] 2000 pounds/ton

(Prinl~d on R~cycl~d Paper)

79 EIIII Slr~~l • HUlford, CT 06106 - 5121

bClp:lldep.sI1Ie.cl.us .

A... Fn;,111 f1nn;,-"..itirv P.""ilovf!r·
Connecticut let Power LLC 2 Trading Agreement and Order

No. 8180A Modification No.1

No later than the twentieth day of each month, CIP shall calculate and

permanently retire DERCs used in the preceding calendar month, as follows:

Actual DERCs (in tons) = [«(FLER in IbsIMMBtu) - (0.95 x NOx allowable rate

in IbslMMBtu)) x (actual fuel use in MMBtu)) 2000

pounds/ton

Where:

• NOx allowable rate = allowable limit rate in IbsJM:MBtu shown in Table 1 of

this Trading Agreement and Order.

• FLER = full load emission rate in IbsJM:MBtu as shown in Table 1 of this

Trading Agreement and Order.

• Discount (0.95) = 5% design margin applied to the allowable limit rate.

ii) During the ozone season only:

No later than December 31st each year, CIP shall acquire and permanently retire

seven ozone season DERCs for every actual ton of excess NOx emitted from the

peaking units during the previous ozone season based upon the actual emissions

for each day that Connecticut one hour ozone 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, CJP shall

calculate and permanently retire seven ozone season DERCs for every actual ton

of excess NOx emitted from 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 "unhealthy for sensitive groups", "unhealthy", or "very

unhealthy".

Where:

Actual ton of excess NOx emitted = [«(FLER in IbsIMMBtu) - (0.95 x

NOx allowable rate in IbslMMBtu))x (actual

fuel use in MMBtu)J .,. 2000 pounds/ton

The total acrnal tons of excess NOx emitted from the peaking units during

forecasted ozone exceedance days shall be multiplied by seven and then rounded

to the next greater whole ton, to determine the number of DERCs to be

pennanently retired. This requirement is in addition to the CJP's requirement to

estimate excess emissions and subsequent pennanent retirement of a sufficient

number of approved DERCs in accordance with paragraph C.2.a.(i) of this

Trading Agreement and Order.

4. Delete paragraph C.2.b. and substitute the following therefor:
Connecticut Jet Power LLC

Reserved.

3 Trading Agreement and Order

No. 8180A Modification No. I

5. Delete paragraph C.2.c. and substitute the following therefor:

During the non-ozone season: Until May 1, 2007, from October 1 through April

30, inclusive, each year, the peaking units shall, in addition to meeting the

24-hour emission limit in Table 22-1 of Section 22a-174-22 of the Regulations,

meet a non~ozone season emission limit of 0.15 IbJrvTh1Btu. Prior to October 1,

2004, October I, 2005 and October I, 2006, CJP shall estimate and acquire the

amount of DERCs or allowances required for such non-ozone season needed to

comply with Section 22a-174-22(e)(3) of the Regulations as follows:

Estimated DERCs (tons) use = [Estimated fuel use in NfMBtu from October 1

through April 30 , (allowable emission rate in

IbslMMBtu - (0.95, 0.151blMMBtu))J + 2000

Ibslton

6. Delete paragraph C.2.d. and substitute the following therefor:

No later than May 31 of 2005,2006 and 2007, in addition to the DERCs retired

pursuant to paragraph C.2.a. of this Trading Agreement and Order, CJP shall

calculate and permanently retire DERCs used in the preceding non-ozone season

as follows:

Actual DERCs (tons) used = [Actual fuel use in MMBtu from October I through

April 30 x (allowable emission rate in IbslM11Btu

- (0.95, 0.151blMMBtu))J + 2000 lbslton

7. Delete paragraph C.6. and substitute the following therefor:

(a) Annual DERC Report. No later than March 1 of every year after issuance of

this Trading Agreement and Order, CJP shall submit in writing to the

Commissioner, a record. of each sale or other transfer of nERCs for the

previous calendar year. CJP shall also include actual NO, emissions from the

peaking units and the amount of all DERCs used (including serial numbers (if

assigned) and DERCs purchased from other facilities). These reports shall be

on forms prescribed by the Commissioner and shall be in monthly increments,

and by ozone and non ozone seasons.

(b) Starting on October 1. 2004: No later than July 30 of every year after issuance

of this Trading Agreement and Order, CJP shall submit in writing to the
Connecticut Jet Power LLC 4 Trading Agreement and Order

No. SISOA Modification No. I

Conunissioner the non-Olone season fuel consumption and amount of all

DERCs used (including serial numbers (if assigned) and approved DERCs

purchased from other facilities) for the peaking units during the October

through April time period in the previous calendar year. These repons shall be

on a form prescribed by the Conunissioner.

8. Delete paragraph e.7. and substitute the following therefor:

Allowance Use. Pursuant to Section 22a-174-22(d)(3) of the Regulations, CIP

may use NOx allowances, until May I, 2007, for the peaking units pursuant to

Section 22a-174-22(j) of the Regulations [Q achieve all or a portion of the

reductions required by Section 22a-174-22 of the Regulations. Any allowance

used for compliance with Section 22a-174-22(e) of the Regulations shall be

subject to all restrictions and/or requirements applicable to DERCs contained in

this Trading Agreement and Order,

a. In order for CJP [Q use NOx allowances, CJP shall create a general account

or use an existing compliance account or overdraft account in EPA's NOx

Allowance Tracking System ("NATS"); and

b. Each allowance used for compliance with Section 22a-174-22 of the

Regulations shall be equivalent to one discrete emission reduction credit.

Allowances shall be considered used for compliance with Section 22a174-22 of the Regulations when they are transferred from the facility's

NOx general account in the NATS or the facility's NOx compliance

account in the NATS to the CT State NOx Retirement Account (Account

ill CTOOOOOO0300 in the NATS).

9. Delete paragraph e.S. and substitute the following therefor:

DERC Shortfall. At a minimum, DERCs required shall be adjusted upwards by

100% if DERCs are not in CJP's possession for use prior to 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 of any alleged noncompliance or violation of law. CIP shall permanently

retire the quantity ofDERCs equivalent to the excess emissions plus a 100%

premium within sixty (60) days of CIP's discovery of the DERC shortfall. CIP

shall certify and report any such DERC retirement to the Commissioner in

accordance with paragraph C.30. of this Trading Agreement and Order.

10. Delete paragraph e.1O. and substitute the following therefor:
Connecticut let Power liC 5 Trading Agreement and Order

No. 8180A Modification No.1

Fl.ER Exceedance. Noncompliance with an established HER shall subject ClP to

make restitution by matching the quantity of emissions ("true up") caused by the

exceedance plus a 100% premium. The true up in tons of DERCs shall be equal

to the HER exceedance in lbs!M:MBtu, multiplied by the total heat input during

the period of noncompliance divided by 2000 Ibslton. If the period of

noncompliance is not known, the time period from the completion of the

last/previous Commissioner witnessed emission test through the date the HER

compliance is achieved as approved by the Commissioner shall be used.

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 of any alleged

noncompliance or violation of law. CJP shall pennanently retire DERCs

calculated in accordance with the above plus a 100% premium within sixty (60)

days of CJP's discovery of the FLER exceedance. CJP shall report any FLER

exceedance to the Commissioner in accordance with paragraph C.30. of this

Trading Agreement and Order.

11. Delete paragraph C.13. and substitute the following therefor:

Extension. No later than May 1, 2007, with respect to the peaking units, CJP shalf

comply with the requirements of Sections 22a-174-22(d)(I) and 22a-174-

22(d)(2)(A) of the Regulations. There is no assurance that after full program

review of this and other Trading Agreements and Orders that the Commissioner

will grant a written extension of this Trading Agreement and Order.

12. Delete paragraph C.14. and substitute the following therefor:

Future Compliance Report. On or before September I, 2006, CJP shall submit a

report in writing to the Commissioner, as directed in paragraph C.3l. of this

Trading Agreement and Order, indicating how the facility shall comply with

Section 22a-174-22 of the Regulations with respect to the peaking units on and

after May I, 2007.

13. Delete paragraph C.17. and substitute the following therefor:

Definitions. As used in this Trading Agreement and Order, "Approved DERCs"

are those for which the Commissioner has provided written authorization for use

in compliance with Section 22a-174-22 of the Regulations; "Commissioner"

means the Commissioner or a representative of the Commissioner; "Non-ozone

season" means the period from Ocrober 1 through April 30 in any given calendar

year; "Ozone season" means the period M':lY.l through September 30 in any given

calendar year.
Connecticut Jet Power LLC 6 Trading Agreement and Order

No. SISDA Modification No. I

14. Delete paragraph C.IS. and substitute the following therefor:

Dates. The date of "issuance" of this Trading Agreement and Order is the date the

Trading Agreement and Order is deposited in the U.S. mail or personally delivered,

whichever is earlier. The date of submission to the Commissioner of any

document required by this Trading Agreement and Order shall be the date such

document is received by the Commissioner. The date of any notice by the

Commissioner under this Trading Agreement and Order, including but not limited

to notice of approval 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 Order to be

submitted or performed by a date which falls on a Saturday, Sunday or a

Connecticut or federal holiday shall be submitted or performed by the next day

which is not a Sarurday, Sunday or Connecticut or federal holiday.

15. Delete the word "individual" and substitute therefor the word "Section" in

paragraph C.3D.

16. Delete the narne "Mr. Michael LaFleur" in paragraph C.31.

All other terms and conditions ofTrading Agreement and Order no. 8180A issued by the

Commissioner acting under Chapter 446c, Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a177 of the Connecticut General Statutes shall remain in effect.
Connecticut Jet Power LLC 7 Trading Agreement and Order

No. 8180A Modification No.1

CJP hereby consents to the entry of this modification to the Trading Agreement and Order

without further notice.

Connecticut Jet Power u..c

Signature:

Type Name:

Type Title:

Date:

Issued as a modification of an Order of the Commissioner of Environmental Protection.

---li~#@!UD tI Gina McCarthy

Commissioner

MAILED CERTIFlED MAll.,

RETURN RECEIPT REQUESTED

Certified Document No. 7002 2030 0006 5643 0055

Date