Exhibit 3

STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

The State of Connecticut

Consent Order No. 1626

vs.

Borough of Naugatuck

A. With the agreement of Borough of Naugatuck ("Respondent") I the

Commissioner of Environmental Protection ("Commissioner") finds the

following:

1. Respondent owns two Nichols multiple~hearth sewage

sludge incinerators (" incinerators''') ,,'. penni t nos. 109-

0001 ("west incinerator") and 109-0002 ("east

incinerator") located at 500 Cherry Street, Naugatuck,

Connecticut ("facility"). Respondent currently has a

contract with Naugatuck Treatment Company ("NTC"l to

operate the incinerators at the facility.

2. The incinerators are subject to Section 22a-174-22 of

the Regulations of Connecticut State Agencies

("Regulations"). On and after May 31, 1995, Section

22a-174-22(e) of the Regulations requires that the

incinerators emit nitrogen oxides ("NOx H ) at a rate no

greater than 0.33 pounds per million British thermal

units ("lbs/MMBtu") of heat input.

3. During emissions testing conducted in November, 1991,

the incinerators' NOx emission rates were less than

0.33 lbs/MMBtu of heat input, the subsequent Section

22a-l74-22 of the Regulations regulatory limit.

4. Pursuant to Section 22a-l74-22(kl of the Regulations,

emission tests are to be conducted at least once every

five years after performing the initial emission test

to ensure continued compliance with the allowable NOx

emission rates set forth in Section 22a-174-22 of the

Regulations.

5. Respondent conducted its initial emission tests in

November, 1991. Pursuant to Section 22a-174-22(k) of

the Regulations, Respondent was required to complete

its next subsequent emission tests no later than

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Respondent's Initials:

79
BOROUGH OF NAUGATUCK 2 CONSENT ORDER NO. 1626

November, 1996. Respondent failed to conduct these

tests until April, 1999.

6. By virtue of the above, Respondent violated Section

22a-174-22(k) of the Regulations.

7. Respondent is required to conduct its next subsequent

emission tests by November, 2001, and at least once

every five years thereafter if Respondent maintains

e~ssion sources subject to Section 22a-174-22 of tne

Regulations.

8. During emissions testing conducted in April, 1999, the

west incinerator emitted NOx at an emission rate of

0.47 Ibs/MMBtu of heat input and the east incinerator

emitted NOx at an e~ssion rate of 0.44 Ibs/MMBtu of

heat input, both in excess of the allowable NOx

emission rate of 0.33 Ibs/MMBtu of heat input.

9. By virtue of the above, Respondent violated Section

22a-174-22(e) of the Regulations.

10. During the April, 1999 emissions test, the east

incinerator was tested at 87.8% of design capacity.

Section 22a-174-22(k) of the Regulations requires that

sampling shall be conducted when the source is

operating at or above ninety percent (90%) of design

capacity.

11. By virtue of the above, Respondent has violated

Section 22a-174-22(kl of the Regulations.

12. Respondent proposes to use approved emission reduction

credits ("ERCSH) to offset excess NOx emissions at the

facility,' until Respondent complies with' the emission

limitation in Section 22a-174-22{e) of the

Regulations.

13. On March 1, 2000, Respondent purchased thirty-one tons

of approved NOx ERCs (eighteen tons non-ozone season,

thirteen tons ozone season). On April 27, 2000,

Respondent purchased fifty-seven tons of approved NOx

ERCs (thirty-five tons non-ozone season, twenty-two

tons ozone season). For the period April 1, 1999

through February 29, 2000, Respondent emitted 24 tons

of excess NOx emissions from the incinerators.

Respondent'S Initials: M1" __ Date:
BOROUGH OF NAUGATUCK 3 CONSENT ORDER NO. 1626

14. By agreeing to the issuance of this consent order,

Respondent makes no admission of fact or law with

respect to the matters addressed herein other than the

facts asserted in paragraphs A.1. and A.2.

B. With the agreement of Respondent, the Commissioner, acting under

Sections 22a-6, 22a-171, 22a-174, 22a-177, and 22a-178 of the

Connecticut General Statutes, orders Respondent as follows:

1. On and after the date of issuance of this consent

order, and prior to May 1, 2003 or until Respondent

achieves compliance with the emission sta~dards in

Section 22a-174-22(e) of the Regulations, whichever

occurs earlier, Respondent shall have in its

possession required, approved ERCs~ .

2. On and after the date of issuance of this consent

order, and prior to May 1, 2003 or until Respondent

achieves compliance with the emission standards in

Section 22a-l74-22{e) of the Regulations,

whichever occurs earlier, Respondent shall document

and record the amounts of all sewage sludge and number

2 oil (collectively referred to as "fuel-) and ERCs

used by the incinerators each month, and provide such

records in accordance with the following and Section

22a-l74-22 of the Regulations:

a. Before the first day of each month, calculate

projected ERCs required for the next calendar

month for the incinerators as follows:

West Incinerator .. ,

ERCs (tons) - (Estimated Fuel Use in MMBtu x

(0.52 lbs/MMBtu - (0.95 x 0.33 lbs/MMBtu))) •

2000 pounds;

East Incinerator

ERCs (tons) - [Estimated Fuel Use in MMBtu x

(0.48 lbs/MMBtu - (0.95 x 0.33 lbs/MMBtu))] +

2000 pounds;

b. Document that sufficient approved ERCs are

available for the incinerators no later than

the first of each calendar month to assure

compliance for, at a minimum, that calendar

month. ERCs required shall be adjusted

Respondent's Initials: Date:
BOROUGH OF NAUGATUCK 4 CONSENT ORDER NO. 1626

upwards by 100% if approved ERCs are not in

Respondent's possession prior to use.

However, based on the gravity of the

noncompliance, the Commissioner may require

additional upward adjustment;

c. No later than the tenth day of each month.

calculate ERCs used in the preceding calendar

month for the incinerators as follows:

West Incinerator

ERCs (tons) ; [Actual Fuel Use in MMBtu x (.52

1bs/MMBtu - (.95 x .33 1bs/MMBtu))J + 2000

pounds;

East Incinerator

ERCs (tons) = [Actual Fuel Use in MMBtu x (.48

1bs/MMBtu - (.95 x .33 1bs/MMBtu))J + 2000

pounds;

d. Document and record monthly consumption of fuel

and ERCs;

e. No later than March 1 of each year this Consent

Order is in effect. include with its annual

emissions report to the Commissioner, the monthly

rate of fuel consumption for the incinerators and

ERCs used by the incinerators for the previous

calendar year;

f. Retain records and supporting documentation as

described in this section for a minimum of five

years, commencing on the date such records were

created;

g. Maintain documentation to attest·~o·the fact that

ERCs used during the ozone season were generated

during the ozone season. The ozone season is

from May 1 through September 30 in any calendar

year. Generator certification of this fact shall

be sufficient; and

h. Provide the records specified above to the

Cornfidssioner within thirty (30) days of receipt of a

written request from the Commissioner.

3. a. Respondent shall immediately retire forty-eight (48)

tons of NOx emissions to offset excess ~Ox emissions from

Respondent's Initials: Date:
BOROUGH OF NAUGATUCK 5 CONSENT ORDER NO. 1626

April 1, 1999 through February 29, 2000 (24 tons for

the excess NOx emissions from April 1, 1999 through

February 29, 2000 and 24 tons as a 100% "premium" for

not having the required NOx ERCs on hand prior to the

occurrence of the excess emissions). Twenty-two (22)

tons shall be ozone season ERCs and twenty-six (26)

tons shall be non-ozone season ERCs.

b. Respondent shall acquire and retire the approved NOx

ERCs calculated in accordance with the following

calculations for the period of time from March 1, 2000

and up to the date of issuance of this consent order:

West Incinerator

ERCs (tons) - (Actual Fuel Use in MMBtu. x {.47

1bs/MMBtu - (.95 x .33 lbs/MMBtu))J + 2000 pounds;

East Incinerator

ERCs (tons) - [Actual Fuel Use in MMBtu x {.44

1bs/MMBtu - (.95 x .33 lbs/MMBtu))] + 2000 pounds

ERCs required shall be adjusted upwards by 100% if

approved ERCs are not in Respondent's possession prior

to use. Any ERCs used during the ozone season shall

have been generated during the ozone season.

4. Prior to May 1, 2003, Respondent shall limit sewage sludge

throughput of the east incinerator to 1.18 dry tons/hour.

However, if Respondent is unable to limit sewage sludge

throughput of the east incinerator to 1.18 dry tons/hour,

Respondent shall conduct NOx emissions testing of the east

incinerator on or before sixty (60) days after 'exceedance of

the 1.18 dry ton/hour throughput limit in accordance with the

following: -

a. Respondent shall submit to the Commcissioner for his

review and written approval an Intent-To-Test

("ITT~) protocol not less than thirty (30) days prior

to the emissions testing required pursuant to paragraph

4 of this consent order. The ITT protocol shall

include at least:

1. The Department of Environmental Protection's

Bureau of Air Management Test Form No.1, "Intent

to Test";

Respondent's Initials: Date:
BOROUGH OF NAUGATUCK 6 CONSENT ORDER NO. 1626

2. System operating parameters indicative of proper

operation, including, but not limited to, sludge

throughput, auxiliary fuel firing rate, NOx

emissions rate, and incinerator operating

temperature.

The ITT protocol shall provide that Respondent shall

perform testing as specified in Sections 22a-174-5 and

22a-174-22 of the Regulations, including operating the

incinerator at not less than ninety percent (90%) of

its maximum permitted capacity.

b. Respondent shall perform all testing required by

paragraph 8.4. in accordance with the approved ITT

protocol.

c. In conducting and performing the testing required by

paragraph B.4., and in analyzing the results of such

testing, Respondent shall adhere to methods specified

in Sections 22a-174-5 and 22a-174-22 of the Regulations

and as approved by the United States Environmental

Protection Agency ("EPA H ) and the Commissioner.

d. Respondent shall schedule all emissions testing so as

to allow the Commissioner to be present during such

testing and to independently verify facility

operations, air pollution.control equipment parameters,

and testing procedures.

e. Within 30 days after completing any emissions testing

required by this consent order, Respondent shall submit

to the Commissioner a written report. providing the

results of such testing; within 15 day~ of a notice

from the Commissioner indicating any deficiencies in

such report, Respondent shall submit a'revised report.

f. If the results of the testing required by paragraph

B.4. show that the actual NOx emission rate of the east

incinerator is higher than the full load emission rate

("FLER H ) of the east incinerator specified in paragraph

B.2., Respondent shall immediately substitute the

higher NOx emission rate for the FLER in the ERC

calculations in paragraph B.2., and Respondent shall

acquire ERCs in accordance with the revised

calculations. Respondent shall adjust any ERCs not in

Respondent's possession prior to the occurrence of the

excess NOx emissions upwards by" 100% from the date of

Respondent's Initials: Date:
BOROUGH OF NAUGATUCK

the emissions test

until the purchase

7 CONSENT ORDER NO. 1626

conducted pursuant to paragraph 3.4.

of said ERCs.

g. If the results of the testing required by paragraph

B.4. show that the actual NOx emission rate of the east

incinerator is lower than the FLER of the east

incinerator specified in paragraph B.2.,

Respondent may submit a written request to the

Commissioner, for his review and written approval, to

substitute the lower NOx emission rate for the FLER in

the ERe calculations in paragraph B.2.

5. Pursuant to paragraph A.7., Respondent shall conduct

ern~ssion tests of both incinerators on or before November

2001. Said emission tests shall be conducted in accordance

with the procedure set forth in paragraph B.,,4. a. through

B.4.e; provided that if the east incinerator is tested at

90% of its maximum permitted capacity, the 1.18 dry ton/hour

sewage sludge throughput limit specified in paragraph B.4.

shall no longer apply. Respondent shall conduct emission

tests of any emission sources subject to Section 22a-174-22

of the Regulations at least once every five years after

November 2001.

a. If the results of the testing required by this

paragraph show that the actual NOx emission rate(s) of

one or both of the incinerators is/are higher than the

full load emission rate (s) ("FLER") of the incinerators

specified in paragraph B.2., Respondent shall

immediately substitute the higher NOx emission rate(s)

for the FLER{s) in the ERe calculations in paragraph

B.2., and Respondent shall acquire ERCs in accordance

with the revised calculations. Respondent shall adjust

any ERCs not in Respondent's possession prior to the

occurrence of the excess NOx emissions upwards by 100%

from the date of the emission tests conducted pursuant

to paragraph B.4. until the purchase of said ERCs.

b. If the results of the testing required by this

paragraph show that the actual NOx emission rate{s) of

one or both of the incinerators is/are lower than the

FLER(s) of the incinerators specified in paragraph

B.2., Respondent may submit a written request to the

Commissioner, for his review and written approval, to

substitute the lower NOx emission rate(s) for the

FLER(s} in the ERC calculations in paragraph B.2.

6. On and after the date of issuance of this Consent Order, and

Respondent's Initials, Date:
BOROUGH OF NAUGATUCK 8 CONSENT ORDER NO. 1626

prior to May 1, 2003, Respondent shall comply during

operation on sewage sludge and no. 2 fuel oil with an

enforceable maximum FLER of 0.52 Ibs of NOx per MMBtu of

heat input for the west incinerator, and 0.48 Ibs of NOx per

MMBtu of heat input for the east incinerator, averaged on a

24-hour basis.

7. No later than May 1, 2003, Respondent shall comply with the

requirements of Section 22a-174-22 (d) (2) of the Regulations.

However, after full program review of the Emissions Trading

Program and, if determined to be appropriate, the

Commissioner may grant a written extension of this Consent

Order.

8. Full compliance. Respondent shall not be considered in full

compliance with this consent order until all actions

required by this consent order have been~completed as

approved and to the Commissioner's satisfaction.

9. Approvals. Respondent shall use best efforts to submit to

the Commissioner all docQ~ents required by this consent

order in a complete and approvable form. If the

Commissioner notifies Respondent that any document or other

action is deficlent, and does not approve it with conditions

or modifications, it is deemed disapproved, and Respondent

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 of

the Commissioner's notice of deficiencies. In approving any

document or other action under this consent order, the

Commissioner may approve the document or other action as

submitted or performed or with such conditions or

modifications as the Commissioner deems necessary to carry

out the purposes of this consent order. ':Nothing in this

paragraph shall excuse noncompliance or .delay.

10. Defini tions. As used in this consent order, "Commissioner"

means the Commissioner or a representative of the

Commissioner. The date of ~issuance" of this consent order

is the date the consent order is deposited in the U.S. mail

or personally delivered, whichever is earlier. "Approved

ERCs" are defined for purposes of this consent order as

those for which the Commissioner has provided written

authorization for use in compliance with Section 22a-174-22

of the Regulations.

11. Dates. The date of submission to the Commissioner of any

document required by this consent order shall be the date

Respondent's Initials:

o

Date:
BOROUGH OF NAUGATUCK 9 CONSENT ORDER NO. 1626

such document is received by the Commissioner. The date of

any notice by the Commissioner under this consent 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 consent order, the word -day· as

used in this consent order means calendar day. k~y document

or action which is required by this consent 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

Saturday, Sunday or Connecticut or federal holiday.

12. Certification of documents. Any document, including but not

limited to any notice, which is required to be submitted to

the Commissioner under this consent order shall be signed by

Respondent or, if Respondent is not an individual, by

Respondent's chief executive officer or a duly authorized

representative of such officer, as those terms are defined

in Section 22a-430-3 (bl (2) of the Regulations of Connecticut

State Agencies, and by the individual(s) responsible for

actually preparing such document, and ·Respondent or

Respondent's chief executive officer and each such

individual shall certify in writing as follows:

"1 have personally examined and am familiar with the

information submitted in this document and all attachments

thereto, and 1 certify, based on reasonable investigation,

including my inquiry of those individuals responsible for

obtaining the information, that the submitted information is

true, accurate and complete to the best of my knowledge and

belief. 1 understand that any false statement made in the

submitted information is punishable as a criminal offense

under Section 53a-l57b of the Co~~ecticut General Statutes

and any other applicable law.-

13. Noncomoliance. This consent order is a final order of the

commas;ioner with respect to the matters addressed herein,

and is nonappealable and immediately enforceable. Failure

to comply with this consent o+der may subject Respondent to

an injunction and penalties.

14. False statements. Any false statement in any information

submitted pursuant to this consent order is punishable as a

criminal offense under Section 53a-l57b of the Co~~ecticut

General Statutes and any other applicable law.

Respondent's Initials, MT Date:
BOROUGH

15.

16.

17 .

lB.

OF NAUGATUCK 10 CONSENT ORDER NO. 1626

Notice of transfer; liability of Respondent.

Until Respondent has fully complied with this consent

order, Respondent shall notify the Commissioner in writing

no later than 15 days after transferring all or any portion

of the facility, the operations, the site or the business

which is the subject of this consent order or after obtaining

a new mailing or location address. Respondent's obligations

under this consent order shall not be affected by the passage

of title to any property to any other person or municipality.

Commissioner's powers. Nothing in this consent order shall

affect the Commissioner's authority-to institute any

proceeding or take any other action to prevent or abate

violations of law, prevent or abate pollution, recover costs

and natural resource damages, and to impose penalties for

past, present, or future violations of law. ··If at any time

the Commissioner determines that the actions taken by

Respondent pursuant to this consent order have not

successfully corrected all violations, fully characterized

the extent or degree of any pollution, or successfully

abated or prevented pollution, the Commissioner may

institute any proceeding to require Respondent to undertake

further investigation or further action to prevent or abate

violations or pollution.

Respondent's obligations under law. Nothing in this consent

order shall relieve Respondent of other obligations under

applicable federal, state and local law.

No assurance by Commissioner. No provision of this consent

order and no action or inaction by the Commissioner shall be

construed to constitute an assurance by the Commissioner that

the actions taken by Respondent pursuant' to, this consent order

will result in compliance [or prevent or abate ·pollution] .

19. Access to site. Any representative of the

Department of Environmental Protection may enter the

facility without prior notice for the purposes of

monitoring and enforcing the actions required or allowed by

this consent order.

20. No effect on r~ghts

neither creates nor

municipalities that

of other persons.

affects any rights

are not parties to

This consent order

of persons or

this consent order.

21. Notice to Commissioner of changes. Within 15 days of the date

Respondent becomes aware of a change in any information

submitted to the Commissioner under this consent order, or

Respondent's Initials: Date:
BOROUGH OF NAUGATUCK 11 CONSENT ORDER NO. 1626

that any such information was inaccurate or misleading or that

any relevant information was omitted, Respondent shall submit

the correct or omitted information to the Commdssioner.

22. Notification of noncompliance. In the event that Respondent

becomes aware that it did not or may not comply, or did not or

may not comply on time, with any requirement of this consent

order or of any document required hereunder, Respondent shall

immediately notify by telephone the individual identified in

the next paragraph and shall take all reasonable steps to

ensure that any noncompliance or delay is avoided or, if

unavoidable, is minimized to the greatest extent possible.

Within five (5) days of the initial notice, Respondent shall

submit in writing the date, time, and duration of the

noncompliance and the reasons for the noncompliance or delay

and propose, for the reyiew and written approval of the

Commissioner, dates by which compliance'will be achieved, and

Respondent shall comply with any dates which may be approved

in writing by the Commissioner. Notification by Respondent

shall not excuse noncompliance or delay, and the

Commissioner's approval of any compliance dates proposed shall

not excuse noncompliance or delay unless specifically so

stated by the Commissioner in writing.

23. Submission of documents. Any document required to be

submitted to the COmrrUssioner under this consent order

shall, unless otherwise specified in this consent order or

in writing by the Commissioner, be directed to:

Wendy Jacobs

Department of Environmental Protection

Bureau of Air Management

Compliance and Field Operations Division .. , 79 Elm Street

Hartford, Connecticut 06106-5127

Respondent's Initials: Date:
BOROUGH OF NAUGATUCK 12 CONSENT ORDER NO. 1626

Respondent consents to the issuance of this consent order

without further notice. The undersigned certifies that he/she

is fully authorized to enter into this consent order and to

legally bind the Respondent to the terms and conditions of the

consent order.

RESPONDENT

Mayor

Date

Issued as a final order of the~~mtssioner of the Department of

Environmental Protection on , 2001.

BOROUGH OF NAUGATUCK LAND RECORDS

MAILED CERTIFIED MAIL, RETURN RECEIPT REQUESTED

Certified Document No. 1625 0561

12