# STATE OFCONNECTICUT DEPARTMENTOFENVIRO MENTALPROTECTION

In the matter of ) ) The State of Connecticut and ) ) 

### PSEG PowerConnecticut LLC ) TradingAgreement and Order No. 8244

Whereas, the Commissioner of Environmental Protection 

### ("CommissionerH) 

### and PSEG PowerConnecticut LLC ("PSEG") agree that it is in the public interest that they work cooperatively 

### to improve the airqualitywithin the State of Connecticut and that the use ofemissionreduction trading will achieve this result in a timely and cost·effective manner: A. At the request and with the agreement of PSEG, the 

### Commissionerfinds the following:



## ....."\ 

### "oJ 1. 

### PSEG is an exempt wholesale electric generating company with 

### its principal place ofbusiness in Newark, NewJersey. OnDecember 6, 2002 PSEG purchased fromWisvest-Connecticut, LLC andnow owns a fossil fuel-fired electric generating station at 1 Aclancic Street in Bridgeport, Connecticut ("facility")

. 2. At the facility, PSEGowns andoperates one (1) piece of fuel-burning equipment ("peaking unit") identified inTable 1 of this TradingAgreement andOrder. This peakingunit is a 20 megawatt combustion turbine. 3. Official U.S. Environmental ProtectionAgency ("EPAIt ) 

### Reference Method 7E stack testing performed on the date indicatedinTable 1, resulted ina NOx emissionrate as follows:

(Prinlelj on Recycled PIper) 19 El:ll 5Ueel • Hanford, CT 06106·**Sl~i** hnp.IIdtp.salt.Ct.\lS A" Eql.HllOp;>oll""it), Employt, /PSEG Power Connecticut LLC 2 Trading Agreement and OrderNo. 8244

Table 1**?S~G** - NOX EMISSION RATEANDRP.CTLIMIT**(lbs/~.3tu)** Peak F1TEL 

# "ox FLER NOx Stack Stack Date of ing Heat (lbs/MM RACT Test Rate Test Stack Unit :Input Stu) Rate (ppmvcl.) Rate Test (MMBtu/ (lbs/MM (lbs/MM or) 

## , Btu) Stu)



### , Unit Other 

# , oil 287 0.73 0.289 188 0.66 4/28/00

4. The emission rate for the peaking unit specified and the fuel is in excess of Section 22a-174-22, Table 22-1, of the Regulations of Connecticut State Agencies ("RegulationsN ), NOx emission rate**lim~ts** (Reasonably Available Control Technology "MCT")

. 5. Pursuant to Section 22a-174-22(b) of the Regulations, the peaking unit is subject to Sections 22a-174-22(d) through (kl of the Regulations, pertaining to the control ofNOx emissions. 6. In accordance with Section 22a-174-22(j) of the Regulations, PSEG proposes that for the peaking unit identified in Table 1, PSEG shall use DERC trading when burning "otheroilN

, as that term is defined in Section 22a-174-22 of the Regulations. 7. Pursuant to the Department of Environmental Protection's 

### "Credit TradingforSources with IrregularNOxEmissions"**~olicy,** revised on February 27, 2001, attached hereto and**~ncorporated** by reference**~nto** this TradingAgreement and Order as Exhibit 

### L the peakins unit has peakdailyNOx emissions greater than three tlmes the average daily emissions during the ozone season and is therefore considered a source with irregularNOx emissions. 8. Based on DEP approved stack test data, it has been determined that the peaking units' emissions will not meet the applicable requirements ofRACT contained in Section 22a-174-22 of the Regulations. PSEG proposes to use the Full Load Emission Rate ("FLER") identified in Table 1 for the purposes of calculating DERCs required.
9. PSEG intends to acauire aporoved DERCs as needed, in order to meet aoolicable-RACT reQuirements and the recruirements of this Trading Agreement and Order.

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;

# '.• 10.

/Approved DERCs are defined for the purpose 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

.PSEG PowerConnecticut LLC 3 Trading Agreement and OrderNo. 8244



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### c.

1.

2.

3. The Commissioner, in accordance with the provisions of this TradingAgreement and Order, and pursuant to Section 22a-174-22(j) of the Regulations, hereby allows PSEG to comply with Section 22a-174-22 of the Regulations through use of emission reduction trading referenced in SectionA, herein, to achieve the NOx emissionredu9tion required by Section 22a-174-22(d)(1) of the Regulations.
With the agreement ofPSEG, the Commissioner, acting under Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a-177 of the Connecticut General Statutes, orders PSEG as follows: Uoon issuance of this TradingAgreement and Order, PSEG shall have 

### in its**~ossession** sufficient approved DERCs in order to meet**appl~cable** RACT requirements and the

. requirements of this Trading Agreement and Order. Uoon issuance of this TradingAgreement and Order, PSEG shall document and record the amounts of all fuel used by the peaking unit each day and the number ofDERcs used for the ozone season (fromMay 1 through September 30 of each year) and non-ozone season (the remainder of the year)

_ Upon issuance of this Trading Agreement and Order, PSEG shall maintain and orovide the records required by oaragraph C.2. of this Trading Agreement and Order in accordance with the following and Section 22a-174-4 of the Regulations, until May 1, 2005, and shall:

a.

_Have in its possession sufficient**ap~roved** DERCs for the current-day, based on the**follow~ng** calculations 

### (described also inExhibit 1); At all times (mass calculation): 

### DERCs (intons)

_ [((FLER in lbs/MMBtu)

- (0.95 xNOx RACT in lbs/MMBtu)) x (actual fuel use in lbs/MMBtu)] 2000 pounds/ton During the ozone season only (peakday calculation): the maximum actual excess NOx emissions (in lbs) on any of the days orojectedby the Commissioner to be "moderate to unhealthful", "unhealthful", or "very unhealthful", divided by 3 and then divided by 13 (with the result in tons): DERCs (in tons) 

## = [(Maximumexcess NOx in lbs) 

### 3) + 

### [13 lbs/day/ton);**~_** During the non-ozone season starting on October 1, 

### 2003, Starting on October 1, 2003, and during the period from October 1 through Aoril 30, inclusive, each year until May I, 2005, the peaking unit shall, inPSEG PowerConnecticut LLC Trading Agreement and OrderNo. 8244 addition to meeting the 24-hour emission limit in Table 22-1 of Sectlon 22a-174-22 of the Regulations, meet a non-ozone season emission limit of 0.15 Ib/MM3tu. Prior to October 1, 2003 and October 1, 2004, PSEG shall estimate and acquire the amount of non-ozone season DERCs or allowances needed to comolywith Section 22a-174-22(e)(3) of the Regulations as follows: EstimatedDERCs (tons) 

## = [Estimated fuel use in MMBtu from October 1**throu~h** April 30 x (Estimated maximumemission rate in lo/MMBtu during October 1 throughApril 30

- (0.95 x 0.15 lb/MMBtu»] + 2000 pounds. No later than May 31 of 2004 and 2005, calculate DERCs used in the preceding non-ozone season**a~** follows: DERCs (tons) = {Actual fuel use in MMBtu from October 1 throughApril 30 x (Actual emission rate in Ib/MMBtu durlng October 1 throughApril 30

- (0.95 x 0.15 lb/MMBtu»)] + 2000 pounds.



### c. At a minimum, adjust upwards by 100% the DERCs required ifDERCs are not in PSEG's possessionprior to use;**.',~** d. As described in Exhibit 1 of this TradingAgreement and Order, to the extent that DERCs used to offset on a peakday basis during the ozone season exceed the total mass excess emissions, remaining DERCs maybe used in the non-ozone season in the same or subsequent years until May 1, 2005;

e. Document and record daily fuel use, excess NOx emissions and, during the ozone season, the ozone classification as forecasted by the Commissioneron the previous day;
f. No later than March 1, of eachyear this Trading Agreement andOrder is in effect, include with its annual emissions report to the Commissioner, DERCs used (calculated as described in sections C.3.a. and C.3.b. above), by ozone and non-ozone seasons, for the previous calendaryear;
g. Retain records and supporting documentation as described in this section for a minimum of five years, commencing on the date such records were created;
h. Maintain documentation to attest to the fact thatPSEG Power Connecticut LLC 5 Trading Agreement and OrderNo. 8244

k. j .

4. DERCs used during the ozone season were generated during the ozone season. The ozone season is from May 1 through September 30 

### in any calendaryear. Generator certification of this fact shall be sufficient; 

## , 

# , i. Provide the records specified above to the Commissionerwithin thirty (30) days of receipt ofa written request from the Commissioner; Pursuant to 

### Section 22a-174-22(d)(3) of the Regulations, PSEG may use NOx allowances, through April 30, 2005, pursuant to Subsection (j) of Section 22a-174-22 ofthe Regulations to achieve all or a portion of the reductions requiredby Section 22a174-22 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 reauirements appllcable to DERCs contained in this TradfngAgreement andOrder; In order for PSEG to use NOx allowances, PSEG shall create a general account oruse an eXisting compliance account or overdraft account in EPA's NOx Allowance Tracking System**(~NATSH);** 1. Each allowance used for comoliance with Section 22a174-22 of the Regulations shall be equivalent to one discrete emission reduction credit. Allowances shall be consideredused for comoliance with Section 22a174-22 of the Regulations when they are transferred from the**faci~ity's** NOxgeneral account in the NATS or the facility's NOx comoliance account or overdraft account 

### in the NATS to the CT State NOx Retirement Account (Account ID CTOQOOQ00300 in the NATS); and

m. Effective January 1, 2004, for the purposes of compliance with Section 22a-174-22 or Section 22a174-38 of the Regulations, DERCs/allowances shall only remain valid for five (5) calendaryears from the year of the generation/allocation of such DERCs/allowances. DERCs/allowances generated/allocatedmore than five (5) calendar years ago are not valid for use for comoliance with Section 22a-174-22 or Section 22a-174-38 of the Regulations. Notwithstanding the above, DERCs/allowances generated/allocatedprior to calendarrear 2000 are valid for use for comoliance with Sect10n 22a-174-22 of the Regulations up·to and including December 31, 2004.
Prior to May 1, 2005, PSEG shall comply during operation of the peaking unit with an enforceable

/PSEG Power Connecticut LLC 6 Trading Agreement and OrderNo. S244

5.

6. maximum full load emission rate limit ("FLER#)of 0.73 lbs ofNOxperMMBtu ofheat input, averaged on a 24- hourbasis. The FLER referenced inparagraph C.4. may be modified only afterthe consent of the Commissionerby written mod1fication of this TradingAgreement and Order. Noncompliance with an established FLER shall SUbject PSEG to make restitution by matching the auantity of emissions ("true UpH) causedby the exceedance plus a 100% premium. The true up in tons ofDERCs shall be equal to the FLERexceedance in Lbs/MMBtu, multiplied by the total heat input during the period of noncompliance dividedby 2000 lbs/ton. If the period ofnoncompliance is not**know~,** the time period from the completion of the last/previous Department

. witnessed emission test through the date the FLER comoliance is achieved as aoorovedby the Commissioner shall be used. However, nothlng in tnis Trading Agreement andOrder shall affect the Commissioner's authority to institute any**~roceeding** or take any other action to require add1tional upward adjustment, based on the gravity of any alleged noncompl1ance or violation of law. 7. PSEG shall conduct NOx emission tests of the peaking**~~it** at least once every five years commencing from the date of the applicable emission test for the peaking unit to be conducted in accordance with paragraph C.S. of this TradingAgreement and Order. S. In accordance·with the methodology in Section 22a-174- 22(k) of the Regulations, PSEG shall conduct a NOx emission test of the peaking unit no later than five years fromApril 28, 2000.
9. No later than May 1, 2005, PSEG shall comply with the requirements of Section 22a-174-22(d)(1) of the Regulations. However, after full programreview of this and other Trading Agreements and Orders and, if determined to be appropriate, the Commissionermay grant a written extension of this Trading Agreement and Order.
10. Aoprovals. PSEG shall use best efforts to submit to the Commissioner all documents reqUired by this Trading Agreement and Order in a complete and approvable form. Ifthe Commissioner notifies PSEG chat any document orother action is deficient, andPSEG Power Connecticut LLC 7 Trading Agreement and OrderNo. 8244



### . ..-)

'

....,..1' 11. does not approve it with conditions or modifications, it is deemed disapproved, and PSEG shall correct the deficiencies and resubmit it within the time specified by the Commissioneror, ifno time is specifiedby the Commissioner, within 30 days of the Commissioner's 

## , notice o! deficiencies. In approving any document or other action under this Trading Agreement and Order, the Commissionermay approve the document or other action as submitted orperformed or with such conditions ormodifications as the Commissioner deems necessary to carryout the purposes of. this Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance ordelay.
Definitions. As used in this Trading Agreement and Orderf "Commissioner" means the Commissioner of Environmental Protection or an agent of the Commissioner. "Ozone seasonU means the period from May 1 through September 30 in any given calendaryear
. The date of "issuance# of this Trading Agreement and Order is the date the TradingAgreement and Order is deposited in the u.s. mail orpersonally delivered, whichever is earlier.
12. Dates. The date of submission to the Commissioner of any document required by this Trading Agreement and Order shall be the date such document is receivedby the Commissioner. The date of any notice by the Commissionerunder this Trading Agreement and Order, including but not limited to notice of approval or disapproval of any document or otheraction, 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 Ordermeans calendar 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 or performed by the next day which is not a Saturday, Sunday or Connecticut or federal holiday.

13. Certification"of documents. 

### Any document, including but not limited to any notice, which is required to bePSEG Power Connecticut LLC 8 Trading Agreement and OrderNo. 8244



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14.

15.

16. submitted to the Commissioner under this Trading Agreement and Order shall be signedby PSEG or, if PSEG is not an individual, by PSEG's chief executive officer or a duly authorized**represe~tative** of such officer,**~s** those terms are defined in Section 22a430-3(b){2) of the Regulations, and by the individual(s) responsible for actuallypreparing such document, and PSEG or PSEG'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 ofmyknowledge and belief. I understand that any false statement made in the submitted information is punishable as a criminal offense under Section 53a-157b of the Connecticut General Statutes and any other applicable law." Noncompliance. This TradingAgreement and Order is a final order of the Commissioner with respect to the matters addressed herein, and is nonappealable and immediately enforceable. Failure to comply with this TradingAgreement andOrdermay subject PSEG to an injunction andpenalties.
False statements. Any false statement in any information submittedpursuant to this Trading Agreement and Order is**p~~ishable** as a criminal offense under Section 53a-157b of the Connecticut General Statutes and any other applicable law.
Notice of transfer; liability of PSEG and others. Until PSEG has fully complied with this Trading Agreement and Order, PSEG shall notify the Commissioner in writing no later than fifteen (15) days after transferring all or anyportion of the facility, the operations, the.site or the business which is the subject of this Trading Agreement and Order or after obtaining a new mailing or location address. PSEG's obligations under this Trading Agreement and Order shall not be affected by the passage of title to any property to any otherperson

/PSEG PowerConnecticut LLC

or municipality. 9 Trading Agreement 

### andOrderNo. 8244

17. Commissioner's powers. Nothing in this Trading Agreement and Order shall affect the Commissioner1s authority**~o** institute anyproceeding or take any other**ac~ion** to prevent or abate violations oflaw, 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 Commissionerdetermines that the actions taken by PSEGpursuant to this Trading Agreement and Orderhave successfully corrected all violations, fully characterized the extent ordegree of anypollution, or successfully abated orpreventedpollution,**t~e** Commissionermay institute anyproceeding to require PSEG to undertake further investigation or further action to prevent orabate violations orpollution.
18. PSEG 1s obligations under law. Nothing in this Trading Agreement and Order shall relieve PSEG ofother obligations under applicable federal, state and local law.
19. No assurance by Commissioner. No provision ofthis Trading Agreement and Order and no action or inaction by the Commissioner shall be construed to constitute an assurance by the Commissioner that the actions taken by PSEGpursuant to this Trading Agreement and Orderwill result in compliance orprevent or abate pollution.
20. Access to facility.**~~y** representative of the Department of**Enviro~~ental** Protection may enter the facility without priornotice for the purposes of monitoring and enforcing the actions required or allowedby this Trading Agreement and Order.
21. No effect on rights of otherpersons. This Trading Agreement and Order neither creates nor affects any rights ofpersons ormunicipalities chat are not ·parties to this Trading Agreement and Order. 

### 22. NO Creation ofProperty Rights. This Trading Agreement and Order does not create any property rights with respect to these DERCs.PSEG Power Connecticut LLC 10 Trading Agreement and OrderNo. 8244

23. Notice to Commissionerof changes. Within fifteen (15) days of the date PSEG becomes aware of a change in any information submitted to the Commissioner under this Trading**Ag~eement** andOrder, or that any such information was inaccurate ormisleading or that any relevant information was omitted, PSEG shall submit the correct or omitted information to the Commissioner.
24.

25. Notification ofnoncompliance. In the event that PSEG becomes aware that it did not ormay not comply, or did not ormay not comply on time, with-any requirement of this TradingAgreement and Order or of any document required hereunder, PSEG shall immediatelynotifyby telephone the individual identified in the next paragraph and shall take all reasonable steps to ensure that any noncompliance or delay is avoided or, ifunavoidable, is minimized to the greatest extentpossible. Within five (5) days of the initial notice, PSEG shall submit in writing the date, time, and duration of the noncompliance and the reasons for the noncompliance ordelay and propose, for the review andwritten approval of the Commissioner, dates bywhich compliance will be achieved, and PSEG shall complywith any dates which may be approved in writing by the Commissioner. Notificationby PSEG shall not excuse noncompliance or delay, and the Commissioner's approval of any compliance dates proposed shall not excuse noncompliance ordelay unless specifically so stated by the Commissioner in writing.
Submission of documents. Any document required to be submitted to the**Co~~issioner** under this Trading Agreement and Order shall, unless otherwise specified in this Trading Agreement and Order or in writing by the Commissioner, be directed to:
Ms. Wendy Jacobs Department of Environmental Protection Bureau ofAir Management Compliance and Field Operations Division Emissions and Credit Trading Section 79 Elm Street Hartford, Connecticut 06106

### PSEG PowerConnecticut LLC 11 

### TradingAgreement and OrderNo. 8244

Fossil Operations "1'7. 

### :1oore Name: PSEG consents to the issuance oftn1s TradingAgreement and Orderwithout furthernotice. The undersigned certifies that he/she is fully authorizedto enterinto this TradingAgreement andOrderand to legallybindPSEGto the terms and conditions ofthe Trading**Agre~ment** 

### andOrder

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# , PSEG PowerConnecticut LLC 

### Signature.

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# Vf)!k.vTitle:
Date: January 24, 2003 

### Issuedas a final consent Environmental Protection on

Ar J. 

### Ro Commissioner

CITYOFBRIDGEPORT**~'u** 

### MAILED CERTIFIEDMAIL, CertifiedDocumentNo. RECORDS RETURN RECEIPTREQUESTED

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