Exhibit 3 

# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

1'1 the matterof The State ofCormecticut and

US Naval Submarine Base New London ) ) 

### ) ) 

### ) ) Trading Agreement and Order No.8201 (CC)



### Whereas, the CommissionerofEnvironmental Protection ("Commissioner'') and the United States Naval Submarine Base New London ("SUBASENLON"), agree that it is in the public interest that they work cooperatively to improve the 

### air quality within the State ofConnecticut and that the use ofemission reduction trading will achieve this result in a 

### timely and cost-effective manner:
A. Atthe request and 

### with the agreement ofSUBASENLON, the Commissioner finds the following:
I.



### 2.

3.

4.

### Initials~ SUBASENLON is a branch ofthe United States government that owns and operates a Naval Submarine training and maintenance facility at Route 12, Crystal Lake Road in Groton, Connecticut ("facility"). Groton, Connecticut is a serious non-attainment area for ozone.
At the facility, SUBASENLON operated a Keeler Company steam boiler No.1 S, ("boiler") which burned #2 oil and natural gas and was subject to Section 22a-174-22, Regulations ofConnecticut State Agencies ("Regulations") pertaining to the control ofnitragen oxide (''},Tax'') emISSIons.


### On April 

### 3D, 1998 boilerNo.1 S was pennanently shut down and the Navy has requested to use the. resulting pennanent reduction in 

### NOx emissions from' that unit to create continuous emission reduction credits ("CERes") for use or trade.

The average annual 

### NOx emissions from the equipment was 8.29 tons, based on the two yearperiod, 1995 and 1996, shown to be most representative ofnonnal source operations prior to dismantling the subject equipment, in accordance with the U.S. Environmental Protection Agency's "Emissions 

### Trading Policy Statement", published December

### 4, 1986, (Federal Register Volume 51, Number 233), as determined by the Department ofEnvironmental Protection based on the Air Bureau's Emission**Inventory_;dat~** on Recycled Paper) 79 film Street j Hartford. CT 06106-5127 Date 

## 6'..<J.02. h:lp:JJdep.S::lie. 1:1.us 

# n An Eqlltll Oppor/Ilniry Employu
w ,!,;,

...**N,."r~** .._._..:
...,,.· ..**·~** _.SUBASENLQN Trading Agreement and Order 8201 

### (CC)


### 5. BoilerNo. IS and boilers Nos. 1,2 and 3 were used to generate emission reductions offsets for**SUB~ENLON's** 

### heat recovery gas turbinepermit

TO. P-0096 (hereby incorporated into this Trading Agreement and Order byreference) byusing a permit limitrestricting the heat input from these boilers to amaximum of836,284 M:MBtu per year.
6. Priorto using boilerNo.1 S to create CERes for purposes other than described in PermitNo. P-0096 above, SUBASENLO must obtain a permitmodification to maintain its emission offsets afterremoving boiler No.1 S by reducing the maximum heat input for boilers Nos. 1, 2 and 3 from 836,284 MMBtu per year to 725,750 MMBtu peryear.


### 7. Pennit#0096 was modified by

### the DEP to remove boilerNo. IS from the permit and contains apennit limitrestricting the heat input for boilers Nos. 1,2 and 3 to 725,750 MMBtu peryear.
8. As properly documented by SUBASENLON, and approved by the Commissioner. the reductions in NOx emissions identified above, and as computed in accordance with the terms ofthis Trading Agreement and Order, confonn with the provisions ofthe

# u.s. Environmental Protection Agency's "Emission Trading Policy Statement". published December 

### 4, 1986, (Federal Register Volume 51, Number 233, pertaining to the creation ofCERes. Specifically, the reductions are:
Real because they result 

### in a reduction ofactual emissions released into the air. The emission reductions are properlymeasured, recorded and reported. Quantifiable because they are based on Emissions Inventory Data derived from AP-42 factors.

Surolus because they are notrequired by any Connecticut statute orregulation mandated by acurrent State Implementation Plan ("SIP'), and are not currently relied upon in any applicable attainment plan, any reasonable further progress plan ormilestone demonstration.**Pennarlen~** because the boiler has been shut down and will not be operated in the future.
Enforceable because the CERCs are approved by the Commissioner under this Trading Agreement and Order.


### B. The Commissioner

### has determined and 

### SUBASENLON agrees to 

### the following:

1. The boilerNo. IS permit 070-038 is hereby null and void, and SUBASENLON hereby waives the right, ifany to the administrative
Initials

# (fl£. 2

### SUBASENLON Trading A2reement and Order 8201 (CCl proceedings pursuant to Section 22a-3a-5(d) ofthe Regulations.


### 2. Subject to paragraph C.2 ofthis Trading Agreement and Order the Commissioner hereby approves 8 tons ofCERes 

### from the actual 

### reductions in NOll emissions from the shutdo\Vn ofboilerNo. IS. The Department has assigned these approved reductions ofNOx emissions with the credit creation serial number CT98/820l(CC)P-038NOX(l-8).


### 3. The Commissioner, in accordance with the provisions ofthis Trading Agreement and Order, pursuant to Section 22a-174-3a ofllie Regulations, 

### will allow approved sources within 

### Connecticut to use a total of8 tons of NOx CERes as emission offsets for new ormodified sources for compliance 

### with the requirements ofSubdivision (4) ofSubsection 

### (1) of Section 22a-174-3a ofthe Regulations and/or for other purposes as approved by the Commissioner in accordance with the Regulations.

4. CERCs approved underthis Trading Agreement and Order shall remain valid until they are used; however, 

### ifthe NOx RACT limits are adjusted downward in laterrevisions ofSection 22a-174-22 ofthe Regulations and these CERCs have not been used, these CERes may also be adjusted downwardly.

C. With the agreement ofSUBASENLON, the Commissioner, acting under Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a-l77 ofthe Connecticut General Statutes, orders SUBASENLON as follows:

1. SUBASENLON shall not exceed the maximum heat input limitation of 725,750 

### M:MBtu peryear for boilers ros. 1,2 and 3.
2. SUBASENLON shall not operate boiler No. IS.
3. No later than 30 days after a sale, or other transfer or use, SUBASENLON shall submit a record ofeach sale orother transfer, or use ofany and all CERCs (including serial numbers, ifassigned) approved within this Trading Agreement and Order to the DEP. These reports shall be on a fonn prescribed by the Commissi9ner.
4. No later than March I ofevery year after issuance ofthis Trading Agreement and Order, SUBASENLON shall include with the "Annual Approved CERC Sales and Use Report" to the Commissioner, a record of each sale orother transfer, and use by SUBASENLON (including serial numbers ifassigned) ofany and all ofthe CERCs approved within this Trading Agreement and Order for the previous calendar year until all such CERCs have been used. These reports shall be on a form prescribed by the Commissioner. This reporting may cease 

### ifa central registry is approved by the Commissioner.

InitialsM 

### 3

### SUBASENLON Trading Arrreemenl and Order 820I ICCl

5. SUBASENLON shall retain records and supporting documentation as 

### described in this Trading Agreement and Orderfor aminimum offive years, commencing on the date such records were created. SUBASENLON shall provide the records specified above to the Commissioner within thirty (30) 

### days ofreceipt ofawritten request from the Commissioner.

6. Approvals. SUBASENLON shall use best efforts to submit to the Commissioner all documents required 

### by this Trading Agreement and Order 

### in acomplete and approvable fOm1. 

### If

### the Commissionernotifies SUBASEl\1LON that any document or other action is deficient, and does not

. 

### approve 

### it with 

### conditions or modifications, it 

### is deemed disapproved, and SUBASENLON shall correct the deficiencies and resubmit it within the time specified by the Commissioneror, ifno time is specified by the Commissioner, within 30 days ofthe Commissioner's notice ofdeficiencies. 

### In approving any document or other action under this Trading Agreement and Order, the Commissionermay approve the document orother action as submitted orperformed or with such conditions or modifications as the Commissionerdeems necessary to carry out the purposes ofthis Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance ordelay.

7. Definitions. As used in this Trading Agreement and Order, "Commissioner" means the Commissioner or a representative of the Commissioner; "Ozone season" means the period from May t ihrough 

### September 30 

### in any given calendaryear, and ''NOx RACT" means NOx Reasonably Available Control Technology. The date of"issuance" ofthis Trading Agreement and Order is the date the Trading Agreement and Order is deposited in the U.S. mail orpersonally delivered, whichever is earlier.

8. Dates. The date ofsubmission to the Commissioner ofany document required by this Trading Agreement and Order shall be the date such document is received bythe Commissioner. The date ofany notice by the Commissionerunder this Trading Agreement and Order, including but not limited to notice ofapproval or disapproval ofany document orother action, shall be the date such**no~ce** is deposited in the U.S. mail or is personally delivered, whichever is earlier. Except as othenvise specified in this Trading Agreement and Order, the word "day" as used in this Trading Agreement and Order means calendarday. Any document or action which is required by this Trading Agreement and Order to be submitted or perfonned 

### by a date which falls on a Saturday, Sunday or a Connecticut or federal holiday shall be submitted orperformed by the next day which is not a Saturday, Sunday or Connecticut or federal holiday.

9. Certification ofdocuments. Any document, including but not limited to any notice, which is required to be submitted to the Commissionerunder this Trading Agreement and Order shall be signed 

### by SUBASENLON's chief

### L-litials~ 4 

### Date 

# 6-6.,,) oQ"<-SUBASENLON Tradin. AlITeement and Order 8201 

### (CGl

executive officer or a duly authorized representative ofsuch officer, as those terms are defined in §22a-430-3(b)(2) oftbe Regulations ofConnecticut State Agencies, and by tbe individual(s) responsible for actuallypreparing sucb document, and SUBASENLON or SUBASENLON's cbiefexecutive 

### officer and each such individual shall certify in writing as follows: "Ihave 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 inquiry ofthose individuals responsible for 

### obtaining the infonnation, that the submitted information is true, accurate and complete to the best ofmy knowledge and belief. I understand that any 

### false statement made 

### in the submitted information is punishable as a criminal offense under §53a·157b ofthe Connecticut General Statutes and any other applicable law."

10. Noncomoljance. This Trading Agreement and Order is a final order ofthe Commissionerwith respect to the matters addressed herein, and is nonappealable and immediately enforceable. Failure to comply with this Trading Agreement and Order may subject SUBASENLON to an injunction and penalties.

11. False statements. Any false statement in any infonnation submitted pursuant to this Trading Agreement and Order is punishable as acriminal offense under Section 53a·157b ofthe Connecticut General Statutes and any other applicable law.

12. Notice oftransfer; liabilitv ofSUBASENLON. Until SUBASENLONhas fully complied with this Trading Agreement and Order, SUBASENLON shall notify the Commissioner in writing no laterthan IS days after transferring all or any portion ofthe facility, the operations, the site or the business which is the subjectofthis Trading Agreement and Order or after obtaining a new mailing or location address. Slj"BASE1\TLON's obligations under this Trading Agreement and Order shall not be affected by the passage oftitle to 3t,yproperty to any other person ormunicipality.

13. Commissioner's powers. Nothing in this Trading Agreement and Order shall affect the Commissioner's authority to institute any proceeding or take any other action 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 oflaw. 

### Ifat any time the Commissioner determines that the actions taken 

### by SUBASEl\TLONpursuant to this Trading Agreement and Order have not successfully corrected all violations, fully characterized the extent or degree ofanypollution, or successfully abated orpreventedpollution, the Commissioner may institute any proce.eding to require SUBASENLON to undertake further investigation or furt..her action to prevent or abate violations orpolJution.

# rnitiaJs~ 5 Date 

# I-:<s-·o"-""SUBASENLON Trading AlZreement and Order 8201 (CCl

l4. SUBASE LON's obligations under law. Nothing in this Trading Agreement and Order shall relieve SUBASENLON ofother obligations under applicable federal, state and local law.

15. No assurance 

### by Commissioner. No provision ofthis Trading Agreement 

### and Order and no action orinactionby

### the Commissioner shall be construed to constitute an assurance by

### the Commissioner that the actions taken by SUBASENLON

### pursuant to this Trading Agreement and Order 

### will result in compliance orprevent or abate pollution.
16. Access to facilitv. Any representative ofthe Department ofEnvironmental Protection may enterthe facility withoutpriornotice for the purposes of monitoring and enforcing the actions required or allowed by this Trading Agreement and Order.

17. No effect on r1szhts orotherpersons. This Trading Agreement and Order neither creates nor affects anyrights ofpersons ormunicipalities that arc not parties to this Trading Agreement and Order.

18. No Creation ofPronerty Rights. This Trading Agreement and Orderdoes not create any property rights with respect to these CERCs.


### 19. Notice to Commissioner ofchaJ1Q:es. Within 

### 15 days ofthe date SUBASENLONbecomes aware ofa change in any information submitted to the Commissionerunderthis Trading Agreement and Order. orthat any such information was inaccurate ormisleading orthat any relevant information was omitted, SUBASENLON shall submit the corrector omitted information to the Commissioner.

20. Notification ofnoncomolia."lce. 

### ill the event that SUBASEl\JLONbecomes
aware that it did hot ormay not comply. or did not ormay not comply on time, with any requirement ofthis Trading Agreement and Order or ofany document required hereunder, SUBASENLON shall immediately notify by telephone the individual identified in the next paragraph and shall take all**reaso~able** steps to ensure that any noncompliance'or delay is avoided or. if unavoidable. is minimized to the greatest extent possible. Within five (5) days ofthe initial notice, SUBASEN'LON shall submit in writing the date, time. and duration ofthe noncompliance and the reasons for the noncompliance ordelay and propose, for the review and written approval of the Commissioner. dates by which compliance will be achieved. and SUBASENLON shall comply with any dates which maybe approved in writing by the Commissioner. Notification by SUBASENLON shall not excuse noncompliance or delay, and the Commissioner's approval ofany compliance dates proposed shall not excuse noncompiiance ordelay unless specifically so statedby the Commissioner in writing.

Initials 

### 6 Date 

# /-.zv-.o"L

### SUBASENLQN


### 21 Trading Agreement and Qrder 8201 

### (CC)


### Submission ofdocuments. Ally

### document required to be submitted to the Commissioner under this TradingAgreement and Order shall, unless otherwise specified in this Trading Agreement and Order or in writing 

### by the Commissioner, be directed to:
Mr. Roland 

### 1. Severance Jr., PE 

### Department ofEnvirorunental Protection 

### Bureau ofAirManagement Compliance and Field Operations Division Emissions and Credit Trading Section 79 Elm Street, 5th Floor Hartford, Connecticut 06106-5127

## lnitials~ 7 Date 

# 6-

# .z.r-<>

.......

### SUBASENLQN Trading A",eement and Order 8201 

# ccg
SUBASENLONconsents to the issuance ofthis 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 legaI"lybind SUBASENLON to the terms and conditions ofthe Trading Agreement and Order. By the United States Naval SubmarineBaseNew London ("SUBASENLON")

Type Name: 

### R. W. RUPLE, CAPTAIN USN


### Type Title: _-'C:::O"'MMi=AN=DI"N"'G'-"-OFF""'I"'C"ER"---

_ 

### Date: 25 JUh'E 2002



### Entered as a final consent 

### qr9,elRfthe**CommJss~r** 

### ofpnvironmental Protection numbered 8201(CC) this

## <---'l~ dayn· 2002.

# L~~~1;L4 Iur 

### 1. 

### Rocque, Jr.

## ~mmiSSioner

MAILED CERTlFIED MAIL, RETURN RECEIPT REQUESTED 

### Certified Document No.

0:1-TRADING·RLS\.TRADJNGORDERS\l\'AVY,RLS\820I NavyCERCsorder\820I NavyCERCorder{S·9-02),doc



### 8