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# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In 

### the maner of The State ofConnecticut and
Montville PowerLLC ) ) ) ) ) 

### Trading Agreement and OrderNo. 8183 A



### Whereas, the CommissionerofEnvironmental Protection ("Commissioner") and Montville Power LLC ("MPLLC") agree 

### that 

### it is in the public interestthat theywork cooperatively to improve the air quality within the State ofConnecticut and that the use ofdiscrete emission reduction credit ("DERC") trading to reduce nitrogen oxide (''NOx'') emissions 

### will achieve this result in atimely and cost-effective manner:

A. 

### At the request 

### and with 

### the agreement of:MPLLC, the Commissionerfinds the following:
J. 

### This Trading Agreement and Ordersupercedes Trading Agreement and Order 8183 issued on January 12, 2000. 

### 2. .MPLLC is an exempt wholesale electric generating companywith 

### its principal place ofbusiness in Sewickley, Pennsylvania. MPLLC owns two (2) piece offuel-burning equipment ("peaking unit") identified in Table 1 ofthis Trading Agreement and 

### Order. These peaking units are diesel generators operated at 74 

### Lathrop Road, Montville, CT ("facility"). 

### 3. Emission testing performed on the dates indicated in 

### Table 1, resulted in 

### aNOx emission rates 

### as follows:

Table 

### 1 Facilityl Fuel HeatInput Stack Test FLER Allowable Date of Next Peaking Unit 

### MMBtuIhr (gm/bhplhr) IbsIMMBtu Rate Stack Stack IbsIMMBtu Test 

### TestDue Montville-I0 #2 oil 256 9.718 3.11 2.35 

### 5123/01 5123106 Montville-II #2 

### oil 256 10.236 2.96 2.35 

### 5/23/01 5/23/06

./

(Prinlcd on Rccyclcd P.pcr) 79 Elm Strcct • H.rlford, CT 06106·5127 hltl':lIdcl'.$l,IC,Cl.US A.1l Eql/.(Jl 0pPOflllllit,· Emplo)'trMontville PowerLLC 2 Trading Agreement and OrderNo. 8183 A

, ! "--" 4. MPLLC exceeds the NOx allowable emission rate for the peaking unit specified in Section 22a-174-22(e) ofthe Regulations as shown in Table 

### 1 ofthis Trading Agreement and Order.
5. Pursuantto the Department ofEnvironmental Protection's 

### "Credit Trading/or Sources with IrregularNOx Emissions"policy, with arevised date ofFebruary 27, 2001, artached'ilereto and incorporated by reference into this Trading Agreement and Order as Exhibit I, the peaking 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. 

### 6. Pursuant to Section 22a-174-22G) ofthe Regulations, during the non-ozone season, MPLLC intends to acquire approved DERCs until April 30, 2007 for the peaking units.
B. The Commissioner, 

### in accordance with the provisions ofthis Trading Agreement and Order, and pursuantto Section 22a-174-22(j) ofthe Regulations, hereby allows MPLLC to complywith Section 22a-174-22 ofthe Regulations through use ofDERC trading. 

### C. With the agreement ofMPLLC, the Commissioner, acting under Sections 22a-6, 22a-I7I, 22a-174, 22a-176, and 22a-177 ofthe Connecticut General Statutes, orders MPLLC as follows:
1. Upon issuance ofthis Trading Agreement and Order. at the facility, MPLLC shall complywith Section 22a-174-22 ofthe Regulations through DERC trading. Until JvfPLLC achieves pennanent compliance with the emission standard in Section 22a174-22(e) ofthe regulation orby April 30, 2007 whichever occurs earlier:

a. MPLLC shall use approved DERCs as required under this Trading Agreement and Order; b. M:PLLC shall have in its possession sufficient approved DERCs to meet applicable NOx emission limits as allowed under this Trading Agreement and Order; and

c. MPLLC shall comply during operation ofthe peaking units with the FLERS shown in Table 1 ofthis TradingAgreement and Order.Montville PowerLLC

2. DERC use 

### 3 Trading Agreement and Order No. 8183 A

### ~"'" \' "j**~.** a. Until April 30, 2007, before the first day ofeach month, MPLLC shall have in. its 

### possession sufficient approved DERCs for the peaking units based on the following calculations.
I Before the-first day ofeach month, MPLLC shall estimate DERCs required for such 

### month for the peaking units as follows. 

### i. At all times (mass calculation):

Estimated DERCs (in tons) = {(estimated fuel use in MMBtu) x «(FLER)

- (0.95 x NOx allowable emission limit))}**~2000** pounds/ton



### Where: ollliowable limit= 

### in Ibs/MMBtu as shown 

### in Table I ofthis Trading

Agreement and Order.



### • FLER= full load 

### emission rate in 

### Ibs/1vfMBtu as 

### shown in 

### Table 1 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 "moderate to unhealthful," "unhealthful," or "very unhealthful," divided by 3 and then divided by 13 (with the result 

### in tons):
Estimated DERCs (in tons) = [(Maximum estimated excess NOx 

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

b. No later than October 30 of2003,2004,2005, and 2006 calculate and permanently 

### retire the DERCs used in the preceding ozone season as the greater of:
i. 

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

### in tons, as follows:

/Montville Power LLC 4 Trading Agreement and Order No.8 I83 A
DERCs (in tons) = ({acrual fuel use in MMBru) x {(FLER)

- (0.95 x NOx allowable emission**limit))}~** 2000 pounds/ton
OR
ii. the maxirp.um acrual excess NOx emissions (in Ibs) on any ofthe days projected by the Commissionerto be "moderate to unhealthful". "unhealthful", or "veryunhealthful", divided by 3 and then divided by 13 (with the result in tons):

Acrual DERCs (tons) used**~[(Acrual** excess NOx in Ibs)**~3]** (13 Ibs/day/ton]
As described in Exhibit I ofthis Trading Agreement and Order, to the extent that DERCs used to offset on peak day basis exceed the total mass excess emissions, remaining DERCs may be used in the non-ozone season in the same or subsequent yem; through April 30, 2007. 

# o 3. NIPLLC shall make and keep records of: daily fuel use and fuel type; excess NOx emissions; the number ofDERCs in its possession. created, purchased and used (by serial number ifassigned) 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 bythe Commissioneron the previous day; as well as documentation anesting to the fact that approved DERCs used during the ozone season were generated during the ozone season. Generator certification ofthis fact shall be sufficient. :tv1PLLC shall maintain and submit such records to the Commissionerin accordance with Section 22a-174-22 ofthe Regulations.
4. Record Keeping. MPLLC shall retain records and supporting documentation as described in this Trading Agreement and Orderfor a minimum offive years. commencing on the date such records were created. :tv1PLLC shall provide the records specified above to the Commissioner within thiny (30) days ofreceipt ofa wrinen request from the Commissioner.

,



### .... ../ 5. Annual Emission Statement. No later than March 1 ofevery year after issuance ofthis Trading Agreement and Order, :tv1PLLC shall include with the Annual Emission Statement provided to the Conunissioner, arecord ofeach sale or other transfer, and use ofany and all ofthe DERCs approved within and subsequent to issuance ofthis Trading Agreement and Order until all such DERCs have been used or are no longer in MPLLC's possession. MPLLC shall also include acrual NOx emissions from the peaking units and the amount ofMontville Power LLC 5 Trading Agreement and OrderNo. 8183 A
all DERCs used (including serial nwnbers (ifassigned) and approved DERCs generated and/orpurchased from other facilities), generated and/or approved for the previous calendar year. These reports shall be on a form prescribed by the Commissioner and shall be in monthly increments. Should :MYLLC choose to discontinue the generation ofDERCs, ?v1PLLC will notify the Commissioner upon discontinuance. I 6. Allowance Use. Pursuantto Section 22a-174-22(d)(3) ofthe Regulations, MPLLC may use NOx allowances, through April 30, 2007, pursuant to Subsection (j) ofSection 22a174-22 ofthe Regulations to achieve all or aportion ofthe reductions required by Section**22a~174~22** ofthe Regulations. Iuly 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;

a. 

### In order for MPLLC to use NOx allowances, MPLLC shall create general 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 22a-174-22 ofthe Regulations when they are transferred from the facility's NOx general account in the NATS to the CT State NOx Retirement Account (Account ID CT0000000300 in the NATS). 7. DERC Doubling. At aminimum, DERCs required shall be adjusted upwards by 100% if DERCs are not in MPLLC's possession for use priorto the first day ofeach month. Howeverbased on the gravity ofthe noncompliance, the Commissionermay require additional upwards adjustment.
8. Vinta2e Restriction. Forthe purposes ofcompliance with Section 22a-174-22 ofthe Regulations, DERCs/allowances shall only remain valid for five (5) calendaryears from the year ofthe generation/allocation ofsuch DERCs/allowances. DERCs/allowances older than five (5) calendaryears 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 year2000 are valid for use for compliance with Section 22a-174-22 ofthe Regulations up to and including December 31, 2004.
9. FLER Exceedance. Noncompliance with an established FLER shall subject "M:PLLC 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 IbslMMBru, multiplied by the total heat input during the period of .-' noncompliance divided by 2000 lbs/ton. Ifthe period ofnoncompliance is not known, theMontville Power LLC 6 Trading Agreement and Order No. 8183 A



# :""", .'-...7 time period from the completion ofthe last/previous Deparnnent witnessed emission test through the date the FLER 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 ortake any other action to require additional upward adjustment, based on the gravity ofany alleged noncompliance or violation oflaw. I 

# , 10. FLER Modification. FLERs set forth in Table I ofthis Trading Agreement and Order may be modified only after the consent ofthe Commissioner by written modification ofthis Trading Agreement and Order.
II. Emissions Testing. Pursuant to Section 22a-174-22(k) ofthe Regulations, MPLLC 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 1 ofthis Trading Agreement and Order.
12. Extension. No later than April 30, 2007, with respect to the peaking units, MPLLC shall complywith therequirements ofSection 22a-174-22(d)(I) ofthe Regulations. However, after full program review oftrus and otherTrading Agreements and Orders and, if determined to be appropriate, the Commissioner may grant a wrinen extension ofthis Trading Agreement and Order.
13. Future Compliance Report. On orbefore September I, 2004, MPLLC shall submit a report indicatinghow the facility shall complywith section 22.-174-22 ofthe Regulations with respect to thePeaking units on and afterMay I, 2007.
14. Full compliance. WLLC shall not be considered 

### in full compliance with this Trading Agreement and Order until all actions required by this Trading Agreement and Orderhave been completed as approved and to the Commissioner's satisfaction.
15. Approvals. :tv!PLLC shall use best effons to submit to the Commissioner all documents required by this Trading Agreement and Order in a complete and approvable form. Ifthe Commissionernotifies :MPLLC that any document or other action is deficient, and does not approve it with conditions or modifications, it is deemed disapproved, and :tv1PLLC shall correct the deficiencies and resubmit it within the time specified by the Commissioner or, if no time is specified. by the Commissioner, within 30 days ofthe Commissioner's notice of deficiencies. 

### In approving any document or other action under this Trading Agreement and Order, the Commissionermay approve the document or other action as submitted or performed or with such conditions or modifications as the Conunissioner deems necessary to carry out the purposes ofthis Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance or delay.Montville Power LLC 7 Trading Agreement and OrderNo. 8183 A 

### 16. Definitions. As used in this Trading Agreement and Order, "Commissioner" means the CommissionerofEnvironmental Protection or an agent cfthe Commissioner. "Ozone season" means the period from May 1 through September 30 in any given calendar year. The date of"issuance" oftms Trading Agreement and Order is the date the Trading 

### Agreement and Orderis deposited 

### in the U.S. mail orpersonally delivered, whicheveris earlier. I 

# , 17. Dates. 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 noticeby the Commissioner under this Trading Agreement and Order, including but not limited to Dotice ofapproval or disapproval ofany docl!ffient 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 otheI"'Nise specified in this Trading Agreement and Order, the word "day" as used in this Trading Agreement and Ordermeans**c~lendar** day. Any document or action which is required by this Trading Agreement and Order to be submitted orperformed by a date which falls on a Saturday, Sunday or a Connecticut or federal holiday shall be submitted orperfoI1l1ed by the next day which is not a Saturday, Sunday or Connecticut or federal holiday. 

# :,::J 18. Certification ofdocuments. Any document, including but Dot limited to any notice, which is required to be submitted to the Commissioner under this Trading Agreement and Order shall be signed byMPLLC or, ifMPLLC is not an individual, by MPLLC's chiefexecutive officer or a duly authorized representative ofsuch officer, as those terms are defined in Section 22a-430-3(b)(2) oftheRegnlations, and by the individual(s) responsible for actuallypreparing such**documen~** and MPLLC orMPLLC's chiefexecutive officer and each such individual shall certify in writing as follows:

"I havepersonally examined and am familiar with the information submitted in**thi~** document and all attachments 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 ofmy lmowledge 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."
19. Noncompliance. This Trading Agreement and Order is a fmal order ofthe Commissioner with respect to the maners addressed herein, and is nonappealable and immediately enforceable. Failure to complywith this Trading Agreement and Order may subject MPLLC to an injunction and penalties.
20. False statements. Any false statement 

### in any information submitted pursuant to this Trading Agreement and Order is punishable as a criminal offense under Section 53a-157bMontville Power LLC 8 Trading Agreement 

### and OrderNo. 8183 A**,~** 

### ;--.J oflhe Cormecticut General Statutes and anyother applicable law. 

### 21. Notice oftransfer: liability ofMPLLC and others. Until MPLLC has fuily complied with this Trading Agreement and Order, h1PLLC shall norify the Commissionerin \¥fiting no laterthan fifteen (15) days after transferring all or any portion ofany ofthe facilities, the operations, the sites or the businesses which are the subject ofthis Trading Agreement and Order or after obtaining anew mailing orlocation addresses. WLLC's obligations under this Trading Agreement and Order shall notbe affected by the passage oftitle to any property to anyotherperson ormunicipality.
22. Commissioner's powers. Nothing 

### in this Trading Agreement and Order shall affect the Commissioner's authorityto institute anyproceeding ortake any other action to prevent or abate violations oflaw, prevent or abate pollution, recover costs and natural resource damages, and to impose penalties for past, present, orfuture violations oflaw. 1f.at any time the Commissionerdetennines that the actions taken byMPLLC pursuant to this Trading Agreement and Orderhave successfully corrected all violations, fully characterized the extent or degree ofany pollution, or successfully abated orprevented pollution, the Commissionermay institute anyproceeding to require :MPLLC to undertake further investigation orfurther action to prevent or abate violations orpollution. 23. :MPLLC's obligations under law. Nothing in this Trading Agreement and Order shall relieve :M:PLLC ofother obligations under applicable federal, state and local law.
24. No assurance by Commissioner. No provision ofthis Trading Agreement and Order and no action orinaction bythe Commissioner shall be consnued to constitute an assurance by the Commissionerthat the actions taken by 'MPLLC pursuant to this Trading Agreement and Order

### will result in compliance orprevent or abate pollution.
25. Access to facilitv. Any representative oftbe Department ofEnvironmental Protection may enter any ofthese facilities withoutpriornotice for the purposes ofmonitoring and enforcing the actions required or allowed by this Trading Agreement and Order. 26. No effect on rights ofotherpersons. This Trading Agreement and Orderneithercreates Dor affects any rights ofpersons ormunicipalities that are not parties to this Trading Agreement 

### and Order.
27. No Creation ofProperty Rights. This Trading Agreement and Order does not create any property rights with respect to these DERCs. 

### 28. Notice to Commissionerofchanges. Within fifteen (15) days ofthe date MPLLC becomes aware ofa change in any information submitted to the Commissioner under this Trading Agreement and Order, orthat any such infonnation was inaccurate ormisleading orthat

### Montville PowerLLC 9 Trading Agreement 

### and OrderNo. 8183 A



# ;-:t .J any relevant information was omined, 1vIPLLC shall submit the correct oromitted information to the Commissioner.
29. Notification ofnoncompliance. 

### In the event that lvIPLLC becomes aware that 

### it did not or may not comply, or did not or may not comply on time, with any requirement ofthis 

### Trading Agreement and Orderor ofany document requiredhereunder, 1v1PLLC shall immediately notify

## by telephone the individual identified in 

### the next paragraph 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, 

### M:PLLC shall submit in writing the date, time, and duration aftbe noncompliance and the reasons for the noncompliance ordelay and propose, for the review and written approval ofthe Commissioner, dates by which compliance will be achieved, and :MPLLC shall complywith any dates which maybe approved in writing by the Commissioner. Notificationby :MPLLC shall not excuse noncompliance ordelay, and the Commissioner's approval ofanycompliance dates proposed shall not excuse noncompliance or delay unless specifically so stated by the Commissionerin writing. 30. Submission ofdocuments. Any documentrequired to be submittedto the Commissioner underthis TradingAgreement and Order shall, unless otherwise specified in this Trading Agreement and Orderor in writingby the Commissioner, be directed to: Mr. Michael LaFleur 

### Deparonent ofEnvironmental Protection Bureau ofAir

### Management Compliance and Field Operations Division Emissions and CreditTrading Section 79 Elm Street Hartford, CT 06106

### Montville Power LLC 10 

### TradingAgreement and OrderNo. 8183 A



# . :J MPLLC consents to the issuance ofthis 

### TradingAgreement and Orderwithout further notice. The undersigned certifies that he/she is fully authorized to enter into this Trading Agreement and 

### Order and to legally bind NfPLLC to the terms and conditions ofthe 

### Trading Agreement and Order. Montville PowerLLC 

# , Signature:

## ~~ Name:

# -'4C~'-U-!.~-,--",~",,-=L.'-2..~=--,-,-,li~_ Title:

# _-,-,R,""~,¥~!<.lM-,-"a/"----J...m,-"M~~"f'8'-<JC,--__ Date:

__

### <'I,-:q...LJ~D",,-,3,-- 

## _
Issued as afinal order ofthe 

### CommissionerofEnvironme

## LJ~I**.~ -L9:JJ~"""'-L-"'.'-'-"'---~'**  2003

.

TOWN OF MONTVILLE LAND RECORDS MAILED CERTIFIED MAIL, RETURN RECEIPT REQUESTED 

### CertifiedDocumentNo.

/