### EXhibit3

••••It

...... 

# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

IN THE MATTER OF 

### STATE OF CONNECTICUT AND DOMINIONNUCLEAR CONNECTICUT, INC. )) ) ) 

# ) 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 ofConnecticut 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 ofDNe, the Commissioner finds the 

### following:

J. 2. 1.

6. 4.



## s. 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 British thermal units ("lbs/MMBtuu) ofheat input_ Stack testing conducted in March andApril of 1995 showed that boilers numberedCB1, 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 ofDERC 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 ofDNC, 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, andwhen this Trading Agreement and Order has been issued.



### Date: Initials: (Printed un Recycled**P~per** ) 79 Elm Streel • Hartford, CT 06106·5127 hllp:lldep,sl:ltC,l't,11,\ AI! £'1,,<11 VppUr"'I!il,'" £"'1,1<1."'" ntbrtJtingConntCIi<'ulCoaslalRtsourctManagtmtnl;1980·,WOO

. 

### - 

### . ... .... .... 

### ....

### 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 usedby each Boiler eachmonth; shall maintain andprovide 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 FLERmeans 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 eachmonth, 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.

h.

i. Notwithstanding paragraph C.2.a. of this Trading Agreement and Order; CERCs required shall be adjusted upwards by at least 100% ifCERCs are not in CNe's possessionprior 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

, Date, 

# i2jJ'\(..=oD.L.\

__Dominion Nuclear 3 Connecticut, Inc. any calendar year. Generator shall be suff1cient; and 

### TRADING AGREEMENTAND ORDERNO. 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") causedby the exceedance plus a 100% premiumpenalty. 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,'

### 9.

10. 

### DominionNuclear 4 TRADINGAGREEMENTAND Connecticut, Inc. ORDERNO. 8222 Commissioner all documents requiredby this Trading Agreement 

### andOrder ina complete andapprovable form. If the Commissionernotif1es DNe that any document orother action is deficient( and does not approve it 

### with conditions or modificat1ons< it 

### is deemed disapproved, andDNe shall correct the deficienc1es and resubmit it

### within the time specifiedby the Commissioner or, ifno time is specifiedby the Commissioner, within 30 days of the Commissioner's notice of deficiencies. In approving any document or other action under 

### this Trading Agreement andOrder. the Commissionermay aoprove the document or otheraction as submittedor performed

# orwith suchconditions ormodifications as the Commissioner deems necessary to carry out the purposes of this Trading Agreement andOrder. 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 fromMay 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 andOrder J.S deposited in the 

### u.s. mail or personally delivered. whichever is earlier. Rates. The date of submission to the Commissionerof any

ocument required by this TradingAgreement and Order shallbe the date suchdocument is receivedby the Commissioner. The date ofany notice by the"Commissionerunder this Trading Agreement and Order, includingbut not limited to notice of approval or disapproval of any document or other action, shall be the date suchnotice 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 TradingAgreement and Ordermeans calendarday. Any document oractJ.onwhich is requiredby this Trading Agreement and Order to be submittedor oerformedby a date which falls on a Saturday, Sunday or a Connecticut or federal holiday shall be submittedorperformedby the next daywhich is not a Saturday, Sunday or Connecticut or federal holJ.day.
11.

12.

13.



### Initials:**f~r~ifjcation** 

### of**d9cume~~.** 

### Any document. including butnot J.ffiJ.ted to any notJ.cel 

### WJ.ch is required to be submitted to the Commissioner under thJ.s Trading Agreement and Order shall be signedby ONC or, ifONC 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) 

### ofthe RegulatJ.ons ofConnecticut State Agencies, andby the individual(sl responsible for actuallypreparing suchdocument, and ONC or ONC's chiefexecutive officer and each such individual shall certify inwriting as follows: 

### "r have personally examinedand am familiar with the information submitted in this document and all attachments thereto. and I 

### certify, basedon 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 ofmy knowledge andbelief. I 

### understand that any false statementmade 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.ssionerwith respect to the matters addressed herein. and is nonappealable and immediately enforceable. Failure to complyWJ.th this Trading Agreement and Ordermay subject DNC to an injunction andpenalties.**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 offenseunder §53a-157b of the

### conne~Genera1

# Statutesandanyother**a::::~ab1e31@;!O**

# \16. 

### DominionNuclear 5 TRADING AGREEMENTAND Connecticut, Inc. ORDERNO. 8222 14.**Notif~ ~f** **~r~ns*~r:****li~~ility** 

### of

### PNe, Until DNChas fully 

### camp 1e W1t**~lS** 

### Tra 1ngAgreement and 

### Order, DNe shall notify 

### the Commissioner inwriting 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 notbe affectedby the**pa~sag~** 

### of t1tle to any property to any otherperson or munlclpa!lty. 

### 15.**Co~issiQner'S Dower~.**  

### Nothing in this Trading Agreement and**Or~r** 

### shall 

### affect t

# eCommissioner'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, presentl 

### or future violat10ns of law. Ifat any time the Commiss1onerdetermines that the actions taken by ONe oursuant to this TradincrAgreement and Orderhave not successfully corrected all viOlations, fully characterized the extent or degree ofanypollution, or successfully abated orprevented pollution, the Commissionermay 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. 17.

18.

19.

20.

21.

22.



### Initials: No 

### assurancej>y

### C,pmmissioner. No provision of this Trading Agreement anOlOraer and no action or inactionby 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 Protectionmay enter the facility without prior notice for the purposes ofmonitoring and enforcing the actions required or allowedby this Trading Agreement and Order. No effect on rights of

### other persons. This Trading Agreement and Orderne1ther creates nor affects any rights ofpersons or municipalities that are not parties to this Trading Agreement and Order. No 

### Creation of PropertyRights, This TradingAgreement and Order does not create any property rights with respect to these OERCs. Notice to Commissioner0tchancres. Within 15 days of the date ONCoecomes aware of a c ange1n any information submitted to the Commissionerunder this Trading Agreement and Order, or that any such information was inaccurate ormisleading 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 thatJ.t fd not or may not comply, or did not ormay not comply on time, with any requirement of this Trading Agreement and Order or ofany document required hereunder( ONC shall immediately notify by teleohone the individual 1dentifiedin the next paragraph and shall take all reasonable steps to ensure that anynoncompliance ordelay 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 andpropose, for the review andwritten approval of the Commissioner, dates by which compliance will be aChieved, and ONC shall comply with any dates whichmay be aporoved in writing by the Commissioner.**No~on** 

### by ONC shall not excuse noncompliance**o~ de~y,**  

### Date' 

## ,31;)'1/(2) 

# ,

### DominionNuclear 6 TRADINGAGREEMENTAND Connecticut, Inc. ORDERNO. 8222 and the Commissioner's approval of,any compliance dates 

### proposed shall not excuse**noncompl~ance** 

### ordelayunless specifically so statedby the Commissioner inwriting. 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 TradingAgreement and Order or inwriting by the Commissioner, be directed to: Wendy Jacobs 

### Department ofEnvironmental Protection Bureau ofAirManagement Emissions andCredlt Trading Section 79 Elm Street Hartford, Connecticut 06106-5127



### Initials: Date:

### DominionNuclear 7 TRADING AGREEMENTAND Connecticut, Inc. ORDERNO. 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 legallybind 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 

### CertifiedDocument

-7-