## STATE OFCONNECTICUT DEPARTMENT OFENVIRONMENTALPROTECTION

In the matter of
The State ofConnecticut and

The Connecticut Light and Power Company Trading Agreement and Order No. 8157

Whereas, the Commissioner ofEnvironmental Protection 

### {"Commissioner") andThe Connecticut Light and PowerCompany ("CL&P") agree that it is in the public interest that they work cooperatively to improve the air quality within the State of 

### Connecticut and that the use ofemission reduction trading will achieve this result in a timely and cost-effective manner:
A. At the request and with the agreement ofCL&P, the Commissioner finds the following:

1. CL&P is an electric utility with headquarters in Berlin, Connecticut, which owns and operates four fossil fuel-fired electric generating stations within the state.
2. One ofthe four fossil fuel-fired electric generating stations within the state that CL&P owns and operates is Middletown Station at 1866 River Road in Middletown, Connecticut ("facility"). At the facility, CL&P operates Middletown Station Unit 4, a 400 megawatt tangentially-fired boiler on No. 6 fuel oil, Connecticut Permit Number 104-0003, ("boiler"). A continuous emissions monitor ("CEM"), certified to 40 Code of Federal Regulations Part 75, measures nitrogen oxide (NOx")emissions from the boiler.

3. During the year 1981, prior to modifications of the boiler's burner, combustion controls and operating conditions, andbased on Department ofEnvironmental Protection approved stack test data, the average annual NOx emission rate for Middletown Station Unit 4was 0.278 pounds per million British thermal units ("lbs/MMBtu") ofheat input when operating on No. 6

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fuel oil. On and after May 31, 1995, the Regulations of Connecticut State Agencies ("Regulations") require that the boiler emit NOx at a rate no greater than 0.25 lbs/MMBtu ofheat input when operating on No. 6 fuel oil.

4. In January 1994, CL&P completed modifications of the boiler's burner and combustion controls, and began to test and adjust operating conditions, thereby reducing the boiler's NOx emission rates below its permitted, allowed and actual baseline emissions rate. Such modifications enabled CL&P's boiler to frequently meet and operate below the emission limitation specified in Section 22a-174-22(e)of the Regulations.

5. After November 1, 1996, CL&P may obtain approval of actual reductions in NOx emissions, generated by operating the boiler at a rate which is below 0.25 lbs/MMBtu of heat input when operating on No. 6 fuel oil for use as emission reduction credits ("ERCs").

6. Pursuant to Section 22a-174-22(j) of the Regulations, CL&P intends to acquire and generate approved ERCs until May 1, 2003 at the facility. Approved ERCs are defined for purposes of this Trading Agreement and Order as those for which the Commissioner has provided written authorization for use in compliance with Section 22a-174-22 of the Regulations. CL&P will acquire approved ERCs monthly on an as-needed basis, as determined by actual NOx emissions in the event that the 24-hour average exceeds the NOx emission limitations of Section 22a-174-22(e) of the Regulations.

7. When properly documented by CL&P, and approved by the Commissioner, the emission reductions identified above, and as computed in accordance with the terms of this Trading Agreement and Order, will conform to the requirements of Section 22a-174-22Ij} (3) of the Regulations. Specifically, the reductions will be:
Real because they result in a reduction of actual emissions released into the air, net of any
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# '-f128fr7The Connecticut Light and Power Company Trading Agreement and Order No. 8157

consequential increase in actual emissions resulting from shifting demand. The emission reductions are properlymeasured, recorded and reported.
Ouantifiable because they are based on continuous emissionmonitoring data as applied in an appropriate reliable and replicable protocol, providing the rate and total mass amount ofreduction. Surplus because they are not required by any Connecticut statute or regulation mandatedby a current State Implementation Plan ("SIP"), and are not currently relied upon in any applicable attainment plan, any reasonable further progress plan ormilestone demonstration.

Permanentbecause the advanced control system is in place and operating, and an appropriate tracking system is inplace tomonitor all data required to verify and quantify the creation ofERCs.
Enforceable because the ERCs are approvedby the Commissioner retrospectively after the submission by CL&P ofthe quarterly or semi-annual report that will document their creation.
8. As documented in Attachment 1, attached to and incorporatedby reference into this Trading Agreement and Order, 234 ERCs were createdby the boilerbetween November 1, 1996 and September 30, 1997 (IDS during the
ozone season and 129 during the non-ozone season). This number ofERCs takes into consideration the ten (10) percent environmental discount.
B. The Commissioner, in accordance with the provisions ofthis Trading Agreement and Order, pursuant to Section 22a-l74- 22(d)(4) ofthe Regulations, will allow CL&P and approved
sources within Connecticut to use 234 tons ofNOx ERCs referenced inparagraphA.8. ofthis Trading Agreement and Order (105 during the ozone season and 129 during the nonozone season) for purposes ofcompliance under Section 22a174-22(j) and/or Section 22a-174-3{1)(5) ofthe Regulations to achieve a portion ofthe nitrogen oxide emission reductions required or as emission offsets for new sources.

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Upon sufficient documentation as prescribedbelow, the Commissionermayprovide written approval ofadditional ERCs by CL&P retrospectively. ApprovedERCs createdbyCL&Pmay be heldby CL&P ortransferred to otherpersons. Such ERCs shall remain valid until they are used or until May 1, 2003, whichever occurs first.
C. With the agreement ofCL&P, the Commissioner, acting under Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a-177 of the Connecticut General Statutes, orders CL&P as follows:
1. ERC generation. Forpurposes ofgenerating ERCs from the boiler at the facility, CL&P shall use 0.25 Ibs/MMBtu ofheat input when operating on No. 6 fuel oil as the baseline emission rate for the boiler. When calculating ERCs, CL&P shall use the lower ofCEMrecorded NOx emission rate* or actual fuel usage data for the boiler in MMBtu/day, when determining heat input. Ten (10) percent ofall ERes (tons) createdby the boiler shall be retiredby the facility and permanently removed from all calculations on a daily basis to assure a benefit to the environment.

+This rate shall be calculatedpursuant to themethodology described in 40Code ofFederal Regulations Part 75.
2. ERC Use. Approved ERCs shall be acquired for the period beginning June 1, 1995 and continuing until CL&P achieves permanent compliance for the boiler with the emission standards in Section 22a-174-22(e) ofthe Regulations oruntil May I, 2003, whichever occurs first. CL&P shall acquire approved ERCs, and document and record the amounts ofNOx emissions and ERCs used by the boiler each month, and shall maintain and provide such records in accordance with the following and Section 22a-l74-4 ofthe Regulations, until May 1, 2003:

a. Before the first day ofeachmonth, calculate projected worst case ERCs required for the same calendarmonth as follows:

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ERCs (tons) = {[estimatedworst case NOx emission rate in lbs/MMBtu

- ((0.95) x (NOx RACT limit in lbs/MMBtu))] x (Estimated fuel use in MMBtu)) + 2000 pounds.
b. Acquire sufficient approved ERCs no later than the first ofeach month to assure compliance for, at a minimum, that calendarmonth. Excess ERCs from previous months can be applied to subsequent months. ERCs required shall be adjusted upwards by 100% ifERCs are not in CL&P's possession prior to use.

c. No later than the twentieth day of each month, calculate ERCs used in the preceding calendar month, as follows: (1) 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 RACT limit. (2) When the boilerhas a daily NOx emission rate (24-hour average) exceeding the NOx RACT limit, calculate the amount of ERCs used, as follows:
ERCs (tons) ([(CEM-recorded NOx daily average emission rate in lbs/MMBtu)

- ((0.95) x (NOx RACT limit in lbs/MMBtu))] x (actual fuel use in MMBtu)} + 2000 pounds.

d. Maintain documentation to attest to the fact that ERCs used during the ozone season were generated during the ozone season. Generator certification of this fact shall be sufficient.

e. After full programreview, and ifthe Commissioner deems it appropriate, the Commissionermay allow the survival and use ofthese ERCs beyondApril 30, 2003.
3. CL&P shall maintain records for the boiler showing daily NOx mass emissions, and actual NOx emission rates

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### and OrderNo. 8157

(24-hour average). CL&P shall also maintain records showing a monthly total ofall ERCs generated net of the ten (10) percent environmental discount.

4. In requesting ERe approval, CL&P shall provide documentation containing monthly operating reports of actual fuel usage in MMBtu and actual heat input based upon CEM-recorded data, daily actual NOx mass emissions and NOx emission rates (24-hour average), number of operating hours perday, and ERCs generated using the baseline emission rate, net ofthe ten (10) percent environmental discount.
5. No later than March 1 ofevery year after issuance of this Trading Agreement andOrder, CL&P shall include with the Annual Emission Statement provided to the Commissioner, a recordofeach sale or other transfer, and use ofany and all of the ERCs approved within and subsequent to issuance of this TradingAgreement and Order until all such ERCs have been used. CL&P shall also include actual NOx emissions from the boiler, and the amount ofall ERCs used (including approved ERCs generated and/orpurchased from other facilities), generated and/or approved for the previous calendar year. These reports will be on a formprescribedby the Commissioner. This reporting may cease if a central registry is approved by the Commissioner. Should CL&P choose to discontinue the generation of ERCs, CL&P will notify the Commissioner upon discontinuance.

6. In order to considerCEM-recorded NOx emission rates valid for ERC approval, all NOx and CO2/02CEMs must comply with 40 Code of Federal Regulations Part 75.

7. CL&P shall retain records and supporting documentation
as described in this Trading Agreement andOrder for a minimumof five years, commencing on the date such records were created. CL&P shall provide the records specified above to the Commissionerwithin thirty (30) days ofreceipt ofa written request from the Commissioner.


### 8. Upon sufficient documentation that CL&P has met the requirements ofparagraphs C.l., 

### C.3, C.4., and C.lO.,

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ofthis Trading Agreement andOrder, the Commissioner may provide written approval ofERCs createdbyCL&P retrospectively, in addition to those approved in paragraph B. of this Trading Agreement and Order. Requests for approval ofall subsequent ERCs created shall be submitted in writing to the Commissioner. ApprovedERCs createdby CL&Pmay be held or transferred to other persons. Such ERCs shall remain valid until they are used oruntil May I, 2003, whichever occurs first.

9. ShouldCL&P choose to generate additional ERCs, reports documenting these ERCs may be submitted on a quarterly
or semi-annual basis. Such reports shall be compiled
on a monthly basis.

10. When the boilerhas dailyNOx emissions below the baseline emission rate, CL&P shall calculate the amount ofERCs generated as follows:

ERCS (tons) = {[Total heat inputl ofNo. 

### 6 fuel oil in MMBtu x ((0.25 lbs/MMBtu)

- (the CEM-recordedNOx emission rate'))] + 2000 lbs/ton} x (0.90).'
where:

1 Heat input shall be calculatedusing the lower of CEM-recorded data or actual fuel usage data in MMBtu per unit of fuel combusted.

2This rate shall be calculatedpursuant to the methodology described in 40 Code ofFederal Regulations Part 75.

3Ten (10) percent ofall ERCs (tons) createdby the boiler shall be retired by the facility andpermanently removed from all calculations on a daily basis to assure a benefit to the environment.
11. As used in this TradingAgreement andOrder, "Commissioner" means the Commissioner ofEnvironmental

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Protection or an agent of the Commissioner. season" means the period fromMay 1 through 30 in any given calendaryear. "Ozone September

12. Notification ofnoncompliance. In the event that CL&P becomes aware that it did not ormay not comply, or did not ormay not comply on time, with any requirement of this TradingAgreement andOrder or ofany document required hereunder, CL&P shall immediately notify the Commissioner and shall take all reasonable steps to ensure that any noncompliance ordelay is avoided or, ifunavoidable, is minimizedto the greatest extent possible. In so notifying the Commissioner, CL&P shall state in writing the reasons for the noncompliance or delay andpropose, for the review and written approval ofthe Commissioner, dates by which compliance will be achieved, andCL&P shall comply with anydates which maybe approved in writing by the Commissioner. NotificationbyCL&P shall not excuse noncompliance or delay, and the Commissioner's approval ofany compliance dates proposed shall not excuse noncompliance ordelay unless specifically so statedby the Commissioner in writing.
13. Certification ofdocuments. Any document, including but not limited to any notice, which is required to be submitted to the Commissioner under this Trading Agreement and Order shall be signedby a responsible corporate officer ofCL&P or a duly authorized representative of such officer, as those terms are defined in Section 22a-430-3(b) (2) ofthe Regulations, andby the individual or individuals responsible for actually preparing such document, each ofwhom shall examine andbe familiar with the information submitted in the document and all attachments thereto, and shall make inquiry ofthose individuals responsible for obtaining the information to determine that the information is true, accurate, and complete, and each ofwhom shall certify in writing as follows:

"I have personally examined and am familiar with the information submitted in this document and all attachments thereto, and I certify that based on
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reasonable investigation, includingmy inquiry ofthose individuals responsible for obtaining the information, the submittedinformation is true, accurate and complete to the best ofmy knowledge andbelief. I understand that any false statementmade in the submitted informationmaybe punishable as a criminal offense under Section 22a-175 of the Connecticut General Statutes or, in accordance with Section 22a-6 ofthe Connecticut General Statutes, under Section 53a157b ofthe ConnecticutGeneral Statutes, and in accordance with anyother applicable statute."
14. Final Agreement and Order. This Trading Agreement and Order is the final agreement and orderby andbetween the Commissionerand CL&Pwith respect to the matters addressedherein, and shall not be modifiedwithout the written agreement ofbothparties.
15. False statements. Any false statement in any information submittedpursuant to this Trading Agreement and Ordermaybe punishable as a criminal offense under Section 22a-175 of the Connecticut General Statutes or, in accordance with Section 22a-6, under Section 53a-157b of the Connecticut General Statutes.
16. Notice of transfer; liability ofCL&P and others. Until CL&P has fully compliedwith this Trading Agreement andOrder, CL&P shall notify the Commissioner in writing no laterthan fifteen (15) days after transferring all orany portion ofthe facility, the operations, the site or the business which are the subject ofthis TradingAgreement and Order, or obtaining a newmailing or location address. Any license transfer shall be conducted in accordance with Section 22a-60 ofthe ConnecticutGeneral Statutes. CL&P's obligations under this TradingAgreement and Order shall notbe affectedby the passage oftitle to any property to any otherperson ormunicipality. Any future ownerofthe facility may be SUbject to the issuance ofa TradingAgreement and Order from the Commissioner.

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17. Commissioner's powers. Nothing in this Trading Agreement andOrder shall affect the Commissioner's authority to institute anyproceeding or take any other action to prevent or abate violations oflaw, prevent or abate pollution, recover costs and natural resource damages, and to impose penalties for violations of law which are willful or criminally negligent or for which penalties have notbeen specificallyprovided in this Trading Agreement andOrder, including but not limited to violations ofanypermit issuedby the Commissioner. Ifat any time the Commissioner determines that the actions taken byCL&Ppursuant to this Trading Agreement andOrderhave not fully achieved compliance with Section 22a-174-22 ofthe Regulations, the Commissionermay institute any proceeding against CL&P and/or require CL&Pto undertake further investigation
or further action.
18. CL&P's obligations under law. Nothing in this Trading Agreement and Order shall relieve CL&P ofother obligations under applicable federal, state and local law.
19. Access to records and facility. Any representative of the Department ofEnvironmental Protectionmay enter and inspect the facility and inspect and copy records within normal business hours without prior notice for the purposes ofmonitoring and enforcing the actions required or allowedby this TradingAgreement and Order.
20. No effect on rights ofotherpersons. This Trading Agreement andOrder shall neither create nor affect any rights ofpersons who ormunicipalities which are not parties to this TradingAgreement and Order.
21. No Creation of Property Rights. This Trading Agreement and Order does not create any property rights with respect to these ERCs.
22. Notice to Commissioner ofchanges. Within fifteen (15) days ofthe date CL&Pbecomes aware ofa change in any information submittedto the Commissioner under this
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Trading Agreement and Order, or that any such information was inaccurate ormisleading or that any relevant information was omitted, CL&P shall submit the correct or omitted information to the Commissioner.
23. Submission ofdocuments. Any document required to be submitted to the Commissioner under this Trading Agreement andOrder shall, unless otherwise specified in writing bythe Commissioner, be directed to:
Mr. DavidJawin Department ofEnvironmental Protection Bureau ofAirManagement Compliance and Field Operations Division Emissions Trading Unit 79 Elm Street Hartford, Connecticut 06106

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CL&P consents to the issuance of this Trading Agreement and Order without further notice. The undersigned certifies that he/she is fully authorized to enter into this Trading Agreement and Order and to legally bind CL&P to the terms and conditions of the Trading Agreement and Order.

Signature:
Type Name: Type Title:

Date: The Connecticut Light
ower Company

. Nadeau
Vice President April 28, 1999

Issued as a final consent order of the Commissioner of

Environmental Protection on 1999.

Arthur

. Rocque, Jr. Commissioner

CITY OFMIDDLETOWN LAND RECORDS MAILEDCERTIFIEDMAIL, RETURN RECEIPT REQUESTED Certified Document No.

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