STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of

The State of Connecticut and

Algonquin \Vindsor Locks ~~

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TrJding Agreement

,nd Order No. 8150

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

Windsor Locks LLC ("Algonquin") 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

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 Algonquin, the Commissioner finds the

following:

1. Algonquin owns and operiltes one cogeneration facility at 26 Canal Bank Rood,

Windsor Locks, Connecticut (,'facility").

2. At the facility, Algonquin operates fuel burning equipment, consisting of one

56 megawatt GE PB6541(B) cogeneration turbine, Connecticut Pennit Number

213-0029 ("turbine") which is subject to Section 22a-174-22 of the Regulations

of Connecticut St:ue Agencies ("Regulations") pertaining to the control of NOx

emissions. The turbine operates on natural gas or No.2 fuel oil. A continuous

emissions monitor ("CEM") certified to 40 Code of Federal Regulations

("CFR") Part 75 measures NOx emissions from the turbine.

3. When operating the turbine, Algonquin sometimes exceeds the NOx allowable

emission rate limit specified in Section 22a-174-22(e)(3) of the Regulations.

4. Pursuant to Section 22a-174-22(j) of the Regulations, during the non-ozone

season, Algonquin intends to acquire approved DERCs until May I, 2005 for

the turbine at the facility.

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Algonquin Windsor Locks liC Trading Agreement Jnd

Order No. 8250

B. The Commissioner, in accordance with the provisions of this Trading Agreement :md

Order, pursuant to Section 22a-174-22(d)(3) of the Regulations, hereby :J.llows Algonquin

to comply with Section 22a-174-22(d)(2) of the Regulmjons through use of DERC trJding.

C. With the agreement of Algonquin, the Commissioner, acting under Sections 22a-6,

22.)-171, 22a-174, 22a-176, and 22a-177 of the Connecticut General St:J.tutes, hereby

orders Algonquin as fo.Ddws:

1. Upon issuance of this Trading Agreement and Order, at the facility, Algonquin shall

comply with Section 22a-174-22 of the Regulations through emission reduction trading.

Until Algonquin achieves permanent compliance with the emission standard in Section

22J-174-22(e) of the Regulations or by May 1, 2005, whichever occurs earlier:

a. Algonquin shall use approved DERCs as required under this Trading Agreement

and Order; and

2. DERC use. Starting on October 1, 2003, and until May 1, 2005, before the first day

of each non-ozone season, Algonquin shall have in its possession sufficient

approved DERCs for the turbine based on the following:

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b. Algonquin shall have in its possession sufficient approved DERCs to meet

applicable NOx emission limits as allowed under this Trading Agreement and

Order.

a. Durine: the non-ozone season:

Algonquin shall me~t a non-ozone seasonal average emission limit of 0.15

Ibsf1.1MJ3tu. Prior to October 1, 2003 and October 1, 2004, Algonquin

shall estimate and acquire the amount of DERCs or allowances required

for such non-ozone season needed to comply with Section 22a-174-

22(e)(3) of the Regulations as foBows:

Estimated DERCs (tons) = [Estimated fuel use in MMBtu from October 1

through April 30 x (estimated seasonal average NOx

emission rate in Ibs!1v1MBtu during October 1 through

April 30 - (0.95 x 0.15IbslMMBtu))J.,. 2000 pounds/ton.

No later than May 31,2004, and May 1, 2005, when the turbine has a non-ozone

seasonal average actual NOx emission rate exceeding 0.15 IbsJM:MBtu,

Algonquin shall calculate and pennanently retire the amount of DERCs used in

the preceding non-ozone season as follows:

Actual DERCs (tons) = [Actual fuel use in iv11v1Btu from October 1 through

April 30 x (:lctual seasonal average NOx emission mte in

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Algonquin Windsor Locks LLC Trading Agreement and

Order No. 8250

Ibs/MMBtu during Oc<ober 1 through April 30 - (0.95 x

0.15 IbsIMMBtu))] 2000 pounds/ton.

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b. When the non-Olone season CEM-recorded NOx emission rare is used to

calculate DERCs used by the turbine, Algonquin shall include missing d:Ha

calculated in nc~ordance with missing dat:l substitution procedures under 40

eFR Part 75.

c. Algonquin shall not exceed any NOx pennit limitations for the turbine.

3. Algonquin shall make and keep records for the turbine of: non-Olone season fuel

use and fuel type; non-Olone season NOx emission rates, number of operating

hours per non-ozone season, the number of invalid data hours of the tOtal operating

hours per non-Olone season; the number of DERCs in its possession, purchased and

used (by serial number if assigned) each non-ozone season in accordance with the

appropriate emission rates and limits in this Trading Agreement and Order.

Algonquin shall maintain and submit such records in accordance with Section 22a174<~2 of the Regulations.

4. Record Kecoin2. Algonquin shall retain records and supporting documentation as

described in this Trading Agreement and Order for a minimum of five years,

commencing on the date such records were created. Algonquin shall provide the

records specified above to the Conunissioner within thirty (30) days of receipt of a

written request from the Commissioner.

5. Reporting. No later than July 30 of every year after issuance of this Trading

Agreement and Order, Algonquin shall submit in writing to the Commissioner the

non-ozone season fuel consumption and amount of all DERCs used (including serial

numbers (if assigned) and approved DERCs purchased from other facilities), for the

turbine during the previous October through April time period. These repons shall

be on a form prescribed by th~ Commissioner.

6. Allowance Use. Pursuant 10 Section 22a-174-22(d)(3) of the Regulations,

Algonquin may use NOx allowances, purs1?-ant to Section 22a-174-220) 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 22a174-22(e) of the Regulations shall be subject to all restrictions and/or requirements

applicable to DERCs contained in this Trading Agreement and Order. Each

allowance used for compliance with Section 22a-174-22 of the Regulmions shall be

equivalent to one discrete emission reduction credit and sh.all be deducted from

Algonquin's NOx Budget Program compliance account upon such use. Allowances

shall be considered used for compliance with Section 22a-174-22 of the Regulations

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Algonquin Windsor Locks LLC Trading Agreement and

Order No. 8150

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when they are transferred from the facility's compliance account or overdraft

account to a SUlte of Connecticut NOx allowance retirement account, account ID

CTOOOOOOO300 in the NOx Allow:mce Tracking System.

7. DERC Doubling. At a minimum, DERCs required shall be adjusted upwards by

100% if DERCs arT not in Algonquin's possession for use priono the first day of

each non-ozone season. However, based on the gravity of the noncompliance, the

Commissioner may require additional upward adjustment.

8. Vinta2:e Restriction. For the purposes of compliance with Section 22a-174-22 of the

Regulations, DERCsJallowances 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

nO[ valid for use for compliance with Section 22a-174-22 of the Regulations.

Notwithstanding the above the DERCslallowances generated/allocated prior to

calendar year 1000 shall be valid for use until December 31, 2004.

9. Extension. No later than May 1, 2005, with respect to the turbine, Algonquin shall

comply with the requirements of Subdivision 22a-174-22(d)(2) of the Regulations.

However, after full program review of this and other Trading Agreements and

Orders and, if detennined to be appropriate, the Commissioner may grant a written

extension of this Trading Agreement and Order.

10. Future Compliance Report. On or before September I, 2004, Algonquin shall

submit a report indicating how the facility shall comply with Section 22a-174-22 of

the Regulations with respect to the turbine on and after May 1,2005.

11. Full compliance. Algonquin shall not be considered in full compliance with this

Trading Agreement and Order until all actions required by this Trading Agreement

and Order have been completed as approved and to the Commissioner's satisfaction.

12. Approvals. Algonquin 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 Algonquin that any document or

other action is deficient, and does not approve it with conditions or modifications, it

is deemed disapproved, and Algonquin 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 of deficiencies. In

approving any document or other acLion under this Trad.ing Agreemen[ 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

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Algonquin Windsor Locks LLC Trilding Agreement <lnd

Order No. 8250

necessary to carry out the purposes of this Trading Agreement and Order. Nothing

in this parilgrnph shall excuse noncompliance or delay.

13. Definitions. As used in this Trading Agreement and Order, "Approved DERCs" are

those for which the Commissioner has provided written authorization for use in

compliance with Section 22a-174-22 of the Regulations; "Commissioner" me::ms the

Commissioner or"n representative of the Commissioner; "Non-ozone season" means

the period from October I through April 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.

14. Dates. The date of submission to the Conunissioner 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 !.he date such notice is deposited in the

U.S. mail or is personally delivered, whichever is earlier. Except as Olherwise

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 perfonned by a

date which falls on a Saturday, Sunday or a Connecticut or federal holiday shall be

submitted or perfonned by the next day which is not a Saturday, Sunday or

Connecticut or federal holiday.

15. Certification of documents. Any document, including but nOl limited to any nOlice,

which is required to be submined [0 the Commissioner under this Trading

Agreement and Order shall be signed by Algonquin or, if Algonquin is not an

individual, by an individual who is an authorized representative of Algonquin, in

accordance with Section 22a-174-2a(a) of the Regulations of Connecticut State

Agencies, and by the individual(s) responsible for actually preparing such

document, 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 anachments thereto, and 1 certify, based on reasonable

investigation, including my inquiry of those individuals responsible for

obtaining the infonnation, that the submitted infonnation is true, accurate and

complete to the best of my knowledge and belief. r understand that any false

statement made in the submitted infonnation is punishable as a criminal offense

under Section 53a-157b of the Connecticut General Statutes and any other

applicable law."

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Algonquin Windsor Locks LLC Trading Agreement and

Order No. 8250

16. Noncomoliance. This Trading Agreemen_t and Order is a final order of the

Commissioner with respect to the matters addressed herein, and is nonappealable

and immedi::nely enforceable. Failure to comply with this Trading Agreement ::md

Order may subject Algonquin to an injunction and penalties.

17. False statements. Any false statement in any infonnation submitted pursuant to this

Trading Agreem~tit and Order is punishable as a criminal offense under Section

53a-157b of the Connecticut General Statutes and any other applicable law.

18. Notice of transfer: liabilitv of Algonauin. Until Algonquin has fully complied with

this Trading Agreement and Order, Algonquin shall notify the Commissioner in

writing no later than 15 days after transferring all or any ponion 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. Algonquin's

obligations under this Trading Agreement and Order shall not be affected by the

passage of title to any property to any other person or municipality.

19. 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 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 detennines that the actions taken

by Algonquin pursuant to this Trading 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 require Algonquin to undertake further investigation or further action

to prevent or abate violations or pollution.

20. Algonquin's obligations under law. Nothing in this Trading Agreement and Order

shall relieve Algonquin of other obligations under applicable federal, state'and local

law.

21. No assurance bv 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 Algonquin

pursuant to this Trading Agreement and Order will result in compliance or prevent

or abate pollution.

22. Access to facilitv. Any representative of the Department of Environmental

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.

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Algonquin Windsor Locks LLC Tradin!2: A!Z.reement and

Order No. 8250

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13. No effect on ri!Z.hts of other persons. This Trading Agreement and Order neither

cre:J.tes nor affects any rights of persons or municipalities that are not panies to this

Trading Agreement and Order.

14. No Creation of Propertv Rights. This Trading Agreement and Order does not create

any property rights 1"'ith respect to these DERCs.

15. Notice to Commissioner of chan!Z.es. Within 15 days of the date Algonquin

becomes aware of a change in any infonnation submitted to the Commissioner

under this Trading Agreement and Order, or that any such infonnation was

inaccurate or misleading or that any relevant information was omitted, Algonquin

shall submit the correct or omitted information to the Commissioner.

26. Notification of noncompliance. In the event that Algonquin 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, Algonquin 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, Algonquin 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 Algonquin shall

comply with any dates which may be approved in writing by the Commissioner.

Notification by AlgonqUin shall not excuse noncompliance or delay, and the

Commissioner's approvai of any compliance dates proposed shall not excuse

noncompliance or delay unless specifically so stated by the Commissioner in

writing.

27. Submission of documents. Any document required to be submitted to the

Commissioner 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

Depanment of Environmental Protection

Bureau of Air Management

Emissions and Credit Trading Section

79 Elm Street

Hartford, Connecticut 06106-5127

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Algonquin Windsor Locks LLC Trading Agreement nnd

Order No. 8250

Algonquin consents to the issuance of this Troding Agreement 3nd Order without funher notice. The

undersigned cenifies thor he/she is fully authorized to enter into this Trading Agreement and Order

and EO legally bind Algonquin to the terms and conditions of the Trading Agreement and Order.

Algonquin Windsor Locks LLC

A " Signature:

J

' / 4 -.. .- Name: ....Il~ •• lU,. 17C _

Dote: _-=:'dcc/_"--'I_C--'3'-- _

Issued as a final order of the Commissioner of Environmental Pr

CITY OF WINDSOR LOCKS LAND RECORDS

on_-4rd Z7

MAILED CERTIFIED MAll.,

RETURN RECEIPT REQUESTED

Certified Document No.

,2003

Anhur J, eJ,,\ Jr. COmmiSSi()

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