STATE OF CONNECTICUT

DEPARTMENT OF ENVIRO MENTAL PROTECTION

In the matter of )

)

The State of Connecticut and )

)

PSEG Power Connecticut LLC )

Trading Agreement

and Order No. 8244

Whereas, the Commissioner of Environmental Protection

("Commissioner H ) and PSEG Power Connecticut LLC ("PSEG") 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 of emission reduction trading will achieve this

result in a timely and cost·effective manner:

A. At the request and with the agreement of PSEG, the

Commissioner finds the following:

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"oJ 1. PSEG is an exempt wholesale electric generating

company with its principal place of business in

Newark, New Jersey. On December 6, 2002 PSEG

purchased from Wisvest-Connecticut, LLC and now owns a

fossil fuel-fired electric generating station at 1

Aclancic Street in Bridgeport, Connecticut

("facility") .

2. At the facility, PSEG owns and operates one (1) piece

of fuel-burning equipment ("peaking unit") identified

in Table 1 of this Trading Agreement and Order. This

peaking unit is a 20 megawatt combustion turbine.

3. Official U.S. Environmental Protection Agency ("EPAIt )

Reference Method 7E stack testing performed on the date

indicated in Table 1, resulted in a NOx emission rate as

follows:

(Prinlelj on Recycled PIper)

19 El:ll 5Ueel • Hanford, CT 06106· Sl~i

hnp.IId tp. salt. Ct. \l S

A" Eql.Hll Op;>oll""it), Employt, /
PSEG Power Connecticut LLC 2 Trading Agreement and

Order No. 8244

Table 1 ?S~G - NOX EMISSION RATE AND RP.CT LIMIT (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 ("Regulations N ), 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 of NOx

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 "other oil N , as that term is defined in Section

22a-174-22 of the Regulations.

7. Pursuant to the Department of Environmental Protection's

"Credit Trading for Sources with Irregular NOx Emissions" ~olicy, revised on February 27, 2001, attached hereto and ~ncorporated by reference ~nto this Trading Agreement and

Order as Exhibit L the peakins unit has peak daily NOx

emissions greater than three tlmes the average daily emissions during the ozone season and is therefore

considered a source with irregular NOx emissions.

8. Based on DEP approved stack test data, it has been

determined that the peaking units' emissions will not meet

the applicable requirements of RACT 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.

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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 Power Connecticut LLC 3 Trading Agreement

and Order No. 8244

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B.

c.

1.

2.

3.

The Commissioner, in accordance with the provisions of

this Trading Agreement 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 Section A, herein, to achieve the NOx

emission redu9tion required by Section 22a-174-22(d) (1)

of the Regulations.

With the agreement of PSEG, 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 Trading Agreement 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 Trading Agreement and Order, PSEG

shall document and record the amounts of all fuel used by

the peaking unit each day and the number of DERcs used for

the ozone season (from May 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 in Exhibit 1);

At all times (mass calculation):

DERCs (in tons) _ [((FLER in lbs/MMBtu) - (0.95 x NOx

RACT in lbs/MMBtu)) x (actual fuel use in lbs/MMBtu)]

2000 pounds/ton

During the ozone season only (peak day calculation) :

the maximum actual excess NOx emissions (in lbs)

on any of the days orojected by 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) = [(Maximum excess 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, in
PSEG Power Connecticut LLC Trading Agreement

and Order No. 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

comoly with Section 22a-174-22 (e) (3) of the

Regulations as follows:

Estimated DERCs (tons) = [Estimated fuel use in

MMBtu from October 1 throu~h April 30 x (Estimated

maximum emission rate in lo/MMBtu during October 1

through April 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 through April 30 x (Actual emission rate

in Ib/MMBtu durlng October 1 through April 30 - (0.95 x 0.15 lb/MMBtu»)] + 2000 pounds.

c. At a minimum, adjust upwards by 100% the DERCs

required if DERCs are not in PSEG's possession prior

to use;

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d. As described in Exhibit 1 of this Trading Agreement and Order, to the extent that DERCs used to offset on

a peak day basis during the ozone season exceed the

total mass excess emissions, remaining DERCs may be

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

Commissioner on the previous day;

f. No later than March 1, of each year this Trading

Agreement and Order 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 calendar year;

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 that
PSEG Power Connecticut LLC 5 Trading Agreement

and Order No. 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 calendar year.

Generator certification of this fact shall be

sufficient;, ,

i. Provide the records specified above to the

Commissioner within thirty (30) days of receipt of a

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 of the Regulations to achieve all or a

portion of the reductions required by 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 Tradfng Agreement and Order;

In order for PSEG to use NOx allowances, PSEG shall

create a general account or use 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 considered used for comoliance with Section 22a174-22 of the Regulations when they are transferred

from the faci~ity's NOx general 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) calendar years from

the year of the generation/allocation of such

DERCs/allowances. DERCs/allowances

generated/allocated more 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/allocated prior to calendar rear 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

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PSEG Power Connecticut LLC 6 Trading Agreement

and Order No. S244

5.

6.

maximum full load emission rate limit ("FLER#)of 0.73

lbs of NOx per MMBtu of heat input, averaged on a 24-

hour basis.

The FLER referenced in paragraph C.4. may be modified

only after the consent of the Commissioner by written

mod1fication of this Trading Agreement and Order.

Noncompliance with an established FLER shall SUbject PSEG to make restitution by matching the auantity of

emissions ("true UpH) caused by the exceedance plus a

100% premium. 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

noncompliance divided by 2000 lbs/ton. If the period of noncompliance 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 aooroved by the Commissioner

shall be used. However, nothlng in tnis Trading Agreement and Order 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 Trading Agreement 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 from April 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 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.

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. If the Commissioner notifies PSEG

chat any document or other action is deficient, and
PSEG Power Connecticut LLC 7 Trading Agreement

and Order No. 8244

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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 Commissioner or, if no time is specified by 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 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 Trading

Agreement and Order. Nothing in this paragraph shall

excuse noncompliance or delay.

Definitions. As used in this Trading Agreement and

Orderf "Commissioner" means the Commissioner of

Environmental Protection or an agent of the

Commissioner. "Ozone season U 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 is

deposited in the u.s. mail or personally 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 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 "day" as used in this Trading

Agreement and Order means calendar day. Any document

or action which is required by this Trading Agreement

and 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.

13. Certification" of documents. Any document, including

but not limited to any notice, which is required to be
PSEG Power Connecticut LLC 8 Trading Agreement

and Order No. 8244

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14.

15.

16.

submitted to the Commissioner under this Trading

Agreement and Order shall be signed by 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 actually preparing 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 of my knowledge 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 Trading Agreement 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

Trading Agreement and Order may subject PSEG to an

injunction and penalties.

False statements. Any false statement in any

information submitted pursuant 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 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. PSEG's obligations under this Trading

Agreement and Order shall not be affected by the

passage of title to any property to any other person

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PSEG Power Connecticut LLC

or municipality.

9 Trading Agreement

and Order No. 8244

17. Commissioner's powers. Nothing in this Trading

Agreement and Order shall affect the Commissioner 1 s

authority ~o institute any proceeding or take any

other ac~ion 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

PSEG pursuant to this Trading Agreement and Order have

successfully corrected all violations, fully

characterized the extent or degree of any pollution,

or successfully abated or prevented pollution, t~e

Commissioner may institute any proceeding to require

PSEG to undertake further investigation or further

action to prevent or abate violations or pollution.

18. PSEG 1 s obligations under law. Nothing in this Trading

Agreement and Order shall relieve PSEG of other

obligations under applicable federal, state and local

law.

19. No assurance by Commissioner. No provision of this

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 PSEG pursuant to this Trading Agreement and

Order will result in compliance or prevent or abate

pollution.

20. Access to facility. ~~y representative of the

Department of Enviro~~ental 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.

21. No effect on rights of other persons. This Trading

Agreement and Order neither creates nor affects any

rights of persons or municipalities chat are not

·parties to this Trading Agreement and Order.

22. NO Creation of Property 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 Order No. 8244

23. Notice to Commissioner of 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 and Order, or that any such

information was inaccurate or misleading or that any

relevant information was omitted, PSEG shall submit the

correct or omitted information to the Commissioner.

24.

25.

Notification of noncompliance. In the event that PSEG

becomes aware that it did 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, PSEG 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, PSEG shall submit in writing the

date, time, and duration of the noncompliance and the

reasons for the noncompliance or delay and propose,

for the review and written approval of the

Commissioner, dates by which compliance will be

achieved, and PSEG shall comply with any dates which

may be approved in writing by the Commissioner.

Notification by PSEG 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.

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 of Air Management

Compliance and Field Operations Division

Emissions and Credit Trading Section

79 Elm Street

Hartford, Connecticut 06106
PSEG Power Connecticut LLC 11 Trading Agreement

and Order No. 8244

Fossil Operations

Name: "1'7. :1oore

PSEG consents to the issuance of tn1s 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 PSEG to the terms and conditions

of the Trading Agre~ment and Order . .,

PSEG Power Connecticut LLC

Signature. --------- Vf)!k.vTitle:

Date: January 24, 2003

Issued as a final consent

Environmental Protection on

Ar J. Ro

Commissioner

CITY OF BRIDGEPORT ~'u

MAILED CERTIFIED MAIL,

Certified Document No.

RECORDS

RETURN RECEIPT REQUESTED

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