EXhibit 3

••••It......

STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

IN THE MATTER OF

STATE OF CONNECTICUT

AND

DOMINION NUCLEAR

CONNECTICUT, INC.

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TRADING AGREEMENT

AND ORDER NO. 8222

Whereas, the Commissioner of Environmental Protection ("Commissioner") and

Dominion Nuclear Connecticut, Inc. ("DNe") agree that it is in the nublie

interest that they work cooperatively to improve the air quality within the

State of Connecticut and that the use of discrete emission reduction credit

("DERC") trading to reduce nitrogen oxide ("NOx") emissions will achieve this

result in a timely and cost-effective manner:

A. At the request and with the agreement of DNe, the Commissioner finds the

following:

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4.

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On or about March 30, 2001, DNe will acquire from Northeast Nuclear

Ener9Y Company and then own and operate the Millstone Nuclear Power Stat~on at Rope Ferry Road, Waterford, Connecticut (~facility")

At t~e facility, DNC will operate five (5) oil-fired heating boilers ("Bo~lers"), numbered CBl, CB2, CB3, B&Wl, and B&W2.

The Boilers are subject to Section 22a-174-22 of the Regulations of

Connecticut State Agencies ("Regulations"). On and after May 31, 1995( Subsection (e) of Section 22a-174-22 of the Regulations requ~res that the Boilers emit NOx at a rate no greater than 0.25

pounds per million Bri tish thermal uni ts (" lbs/MMBtu u) of heat input_

Stack testing conducted in March and April of 1995 showed that

boilers numbered CB1, CB2, CB3, and B&W2 exceeded the allowable NOx

emission rate. Stack testing conducted in March of 2000 showed that

all five boilers exceeded the allowable NOx emission rate.

Pursuant to Subsection (j) of Section 22a-174-22 of the Regulations,

on and after the date that DNC acquires the Boilers, DNC w~ll acquire approved DERCs to offset excess NOx emissions from the Boilers. ONC

intends to continue acquiring approved DERCs as needed.

Ap~roved DERCs are defined for ~urposes of this order as those for wh~ch the Commissioner has Drov~ded written authorization for use in

compliance with Section 22a:174-22 of the Regulations.

B. The Commissioner, in accordance with the provisions of this Trading Agreement and Order, and pursuant to Subsection (j) of Section 22a-174-22

of the Regulations hereby allows DNC to comply with Section 22a-174-22 of

the Regulations through use of DERC trading referenced in Section A, herein, to achieve the NOx emission reduct~on required by Subdivision (1) of Subsection {d} of Section 22a-174-22 of the Regulations.

C. with the agreement of DNC, the Commissioner, acting under Connecticut

General Statutes Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a-177, orders DNe as follows:

1. The terms and conditions established by this Trading Agreement and

Order shall become effective on the date DNC acquires the Boilers, and when this Trading Agreement and Order has been issued.

Initials: (Printed un Recycled P~per ) Date:

79 Elm Streel • Hartford, CT 06106·5127

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Dominion Nuclear

Connecticut, Inc.

2 TRADING AGREEMENT AND

ORDER NO. 8222

2. On and after the date that CNC acquires the Boilers, ONC shall

have in its possession approved OERCs for the Boilers; shall

document and record the amounts of all fuel and approved OERCs

used by each Boiler each month; shall maintain and provide such

records in accordance with the following and Section 22a-174-4 of

the Regulations, until May 1, 2003; and:

a. Before the first day of each month, calculate projected

CERCs required for the Boilers for the next calendar

month as follows:

CERCs (tons) = (Estimated Fuel Use in MMBTU X

(FLER(lb/MMBTU) - (.95 x .25 Ib/MMBTUl )+2000 pounds

Where FLER means full load emission rate referenced in

paragraph C.3. of this Trading Agreement and Order;

b. ONC shall have in its possession sufficient approved

DERCs no later than the first of each calendar month to

assure compliance for, at a minimum, that month. Excess

CERCs from previous mon~hs can be applied to subsequent

months. Approved CERCs shall be acquired on and after

the date that DNC acquires the Boilers, and until ONC

achieves permanent compliance with the emission standard

in Subsection (e) of Section 22a-174-22 of the

Regulations;

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

approved CERCs used in the preceding calendar month;

d. Document and record monthly fuel used by each Boiler and

the approved DERCs used;

Initials:

e.

f.

g.

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i.

Notwithstanding paragraph C.2.a. of this Trading

Agreement and Order; CERCs required shall be adjusted

upwards by at least 100% if CERCs are not in CNe's

possession prior to use. However, based on the gravity

of the noncompliance, the Commissioner may require

additional upward adjustment;

DNe shall notify the Commissioner in writing, within

thirty (30) days from the date of discovery of any

deficit in CERCs, and shall submit copies of supporting

calculations for review and approval by the Commissioner;

No later than March 1, 2002, 2003 and 2004, include with

its annual emissions report to the Commissioner, the fuel

consumed and approved DERCs used monthly for the previous calendar year;

Keep records and supporting documentation as described in

this section for a m1nimum of five years, commencing on

the date such records are created;

Keep documentation to demonstrate that DERCs used during the ozone season were generated during the ozone season. ~zone season is from May 1 through sePte~~ 30 in

, Da t e , i2jJ'\ (..=oD.L.\__
Dominion Nuclear 3

Connecticut, Inc.

any calendar year. Generator

shall be suff1cient; and

TRADING AGREEMENT AND

ORDER NO. 8222

certification of this fact

j . Submit the records specified above to the Commissioner

within thirty (30) days of receipt of a written request from the Commissioner.

3. Upon issuance of this Trading Agreement and Order, and until

May 1, 2003, DNC, during operation of each Boiler, shall not

exceed the FLERs shown in Table 1 of this Trading Agreement and

Order.

TABLE 1

DNC - FLERs and NOx Emission Rates

FLER NOx RACT

Stack Test (lb/MMBtu) Rate

Result (lb/MMBtu)

(lb/MMBtu) Stack Test

BOILER FUEL TYPE Date

Boiler No. 4 oil 0.38 3/8/00 0.42 0.25

CBl

Boiler No. 4 oil 0.35 3/8/00 0.39 0.25

CB2

Boiler No. 4 oil 0.32' 3/8/00 0.35 0.25

CB3

Boiler No. 4 oil 0.26 4/12/00 0.29 0.25

B&W1

Boiler No. 4 oil 0.32 4/12/00 0.35 0.25

B&W2

4. No later than May I, 2003, DNC shall comply with the

requirements of Subdivision (1) of Subsection (d) of Section

22a-174-22 of the Regulations. However, after full program review of this and other Trading Agreements and Orders and, if

determined to be appropriate, the Commissioner may grant a

written extension of this Trading Agreement and Order.

5. The FLER may be adjusted upon satisfactory demonstration to the

Department and wr1tten approval by the Commissioner.

6. Exceedance of an established FLER shall subject DNC to make

restitution by matching the quantity of em1ssions (~true up") caused by the exceedance plus a 100% premium penalty. The true

up in tons of DERCs shall be equal to the FLER exceedance in

Lbs/MMBtu, multiplied by the total heat input during the period of non-compliance divided by 2000 lbs/ton. If the period of

non-compliance is not known, the time period from the completion of the last/previous, Department witnessed stack test through the

date compliance is achieved as approved by the Commissioner

shall be used. However, based on the grav1ty of the

noncompliance, the Commissioner may require additional upward adjustment.

7. Pursuant to Subsection (k) of Section 22a-174-22 of the

Regulations, DNC shall conduct NOx emission tests of the Boilers

at least once every five years. Such testing shall take place no.later.than.f~ve years from the d~te of ~he last test for the

B01lers 1dent1f1ed 1n Table 1 of th1s Trad1ng Agreement and

Order. In no event shall such testing be later than five years from the date that the previous test was required to be

conducted by.

8. APP~.

Initials:

DNC shall use best efforts to submit to

Date: t~LI,'
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10.

Dominion Nuclear 4 TRADING AGREEMENT AND

Connecticut, Inc. ORDER NO. 8222

Commissioner all documents required by this Trading Agreement and Order in a complete and approvable form. If the

Commissioner notif1es DNe that any document or other action is

deficient( and does not approve it with conditions or

modificat1ons< it is deemed disapproved, and DNe shall correct

the deficienc1es 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 Trading Agreement and Order. the Commissioner may aoprove 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 Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance

or delay.

Defin~ti9ns. As used in this Trading Agreement and Order, "CommJ.SSJ.oner" means the Commissioner or a representative of

the Commissioner; "Ozone season" means the period from May 1

through September 30 in any given calendar year. The date of

-issuance" of this Trading Agreement and Order is the date the

Trading Agreement and Order J.S deposited in the u.s. mail or

personally delivered. whichever is earlier.

Rates. The date of submission to the Commissioner of any ocument 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 6day" as

used in this Trading Agreement and Order means calendar day. Any document or actJ.on which is required by this Trading Agreement and Order to be submitted or oerformed 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 holJ.day.

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Initials:

f~r~ifjcation of d9cume~~. Any document. including but not

J.ffiJ.ted to any notJ.ce l W J.ch is required to be submitted to the

Commissioner under thJ.s Trading Agreement and Order shall be

signed by ONC or, if ONC is not an individual, by ONC's chief

executive officer or a duly authorized representative of such

officer( as those terms are defined in §22a-430-3 (b) (2) of the

RegulatJ.ons of Connecticut State Agencies, and by the

individual(sl responsible for actually preparing such document, and ONC or ONC's chief executive officer and each such

individual shall certify in writing as follows: "r have

personally examined and am familiar with the information

submitted in this document and all attachments thereto. and I

certify, based on reasonable investigation. including my inguiry of those individuals responsible for obtaining the informatJ.on, that the submitted information is true, accurate and complete to

the best of my knowledge and belief. I understand that any false statement made in the submitted information is punishable

as a criminal offense under §53a-157b of the Connecticut General

Statutes and any other applicable law."

N¥n~mp~iaD~e. This Trading Agreement and Order is a final order

o t e ommJ.ssioner with respect to the matters addressed

herein. and is nonappealable and immediately enforceable.

Failure to comply WJ.th this Trading Agreement and Order may subject DNC to an injunction and penalties.

F~S~ st~tements. Any false statement in any information S mJ.tt~ pursuant to this Trading Agreement and Order is

punishable as a criminal offense under §53a-157b of the

conne~Genera1 Statutes and any other a::::~ab1e31@;!O \
16.

Dominion Nuclear 5 TRADING AGREEMENT AND

Connecticut, Inc. ORDER NO. 8222

14. Notif~ ~f ~r~ns*~r: li~~ility of PNe, Until DNChas fully camp 1e W1t ~lS Tra 1ng Agreement and Order, DNe 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 Trading Agreement and Order or after obtaining a new mailing or location

address. ONe's obligations under this Trading Agreement and

Order shall not be affected by the pa~sag~ of t1tle to any property to any other person or munlclpa!lty.

15. Co~issiQner'S Dower~. Nothing in this Trading Agreement and Or~r shall affect t e 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 l or future violat10ns of law. If at any time the

Commiss1oner determines that the actions taken by ONe oursuant

to this Tradincr Agreement and 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 re~ire DNC to undertake further investigation or further

action to prevent or abate violations or pollution.

ONC's obligations under law. Nothing in this Trading Agreement and Oraer sna11 relTeve DNe of other obligations under

applicable federal, state and local law.

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Initials:

No assurance j>y C,pmmissioner. No provision of this Trading Agreement anOlOraer and no action or inaction by the

Commissioner shall be construed to constitute an assurance by the Commissioner that the actions taken by ONe oursuant to this

Trading Agreement and Order will result in compliance or

prevent or abate pollution.

Access to facility. Any representative of the Department of

Envlronmental Protection may enter the facility without prior notice for the purposes of monitoring and enforcing the actions

required or allowed by this Trading Agreement and Order.

No effect on rights of other persons. This Trading Agreement and Order ne1ther creates nor affects any rights of persons or

municipalities that are not parties to this Trading Agreement and Order.

No Creation of Property Rights, This Trading Agreement and

Order does not create any property rights with respect to these

OERCs.

Notice to Commissioner 0tchancres. Within 15 days of the date

ONC oecomes aware of a c ange 1n any information submitted to

the Commissioner under this Trading Agreement and Order, or

that any such information was inaccurate or misleading or that

any relevant information was omitted, ONC shall submit the

correct or omitted information to the Commissioner.

Notification o~noncomoliance. In the event that DNe becomes·

aware that J.t fd not or may not comply, or did not or may not

comply on time, with any requirement of this Trading Agreement and Order or of any document required hereunder( ONC shall

immediately notify by teleohone the individual 1dentified 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, DNC shall submit in

writing the date, time, and duration of the noncompliance and

the reasons for the noncomoliance or delay and propose, for the

review and written approval of the Commissioner, dates by which

compliance will be aChieved, and ONC shall comply with any dates which may be aporoved in writing by the Commissioner. No~on by ONC shall not excuse noncompliance o~ de~y,

Date' ,31;)'1/(2) ,
Dominion Nuclear 6 TRADING AGREEMENT AND

Connecticut, Inc. ORDER NO. 8222

and the Commissioner's approval of,any compliance dates

proposed shall not excuse noncompl~ance or delay unless

specifically so stated by the Commissioner in writing.

23. SUbmiss~Qn of dQcumeDt~. Any document required to be submitted

to the omm~ss10ner un er this Trading Agreement and Order

shall, unless otherwise specified in this Trading Agreement and

Order or in writing by the Commissioner, be directed to:

Wendy Jacobs

Department of Environmental Protection

Bureau of Air Management Emissions and Credlt Trading Section

79 Elm Street

Hartford, Connecticut 06106-5127

Initials: Date:
Dominion Nuclear 7 TRADING AGREEMENT AND

Connecticut, Inc. ORDER NO. 8222

DNC 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 DNC to the

terms and conditions of the Trading Agreement and Order.

Signature:

Type Name:

Type Title:

Date:

Issued as a final order of the Commissioner of

Envirorunental Protection on _.!.~~!!M~!:l"--~~""~__

MAILED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

Certified Document

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