# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matterof The State ofConnecticut and Algonquin \Vindsor Locks**~~** 

# , ) ) ) ) ) TrJding Agreement 

### ,nd OrderNo. 8150

:""-, Whereas, the Commissioner ofEnvironmental 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 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 ofAlgonquin, 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 ofone 56 megawatt GE PB6541(B) cogeneration turbine, Connecticut Pennit Number 213-0029 ("turbine") which is subject to Section 22a-174-22 ofthe Regulations ofConnecticut St:ue Agencies ("Regulations") pertaining to the control ofNOx emissions. The turbine operates on natural gas or No.2 fuel oil. A continuous emissions monitor ("CEM") certified to 40 Code ofFederal 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) ofthe Regulations. 4. Pursuant to Section 22a-174-22(j) ofthe 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 WindsorLocks liC Trading Agreement Jnd OrderNo. 8250 B. The Commissioner, in accordance with the provisions ofthis Trading Agreement :md Order, pursuant to 

### Section 22a-174-22(d)(3) ofthe Regulations, hereby :J.llows Algonquin to comply with Section 22a-174-22(d)(2) ofthe Regulmjons through use ofDERC trJding. 

### C. With the agreement ofAlgonquin, the Commissioner, acting under Sections 22a-6, 22.)-171, 22a-174, 22a-176, and 22a-177 ofthe Connecticut General St:J.tutes, hereby orders Algonquin as fo.Ddws: 1. 

### Upon issuance ofthis Trading Agreement and Order, at the facility, Algonquin shall comply with Section 22a-174-22 ofthe Regulations through emission reduction trading. Until Algonquin achieves permanent compliance with the emission standard in Section 22J-174-22(e) ofthe Regulations orby May 1, 2005, whicheveroccurs 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 ofeach non-ozone season, Algonquin shall have in its possession sufficient approved DERCs for the turbine based on the following:**~)**



### ....',. 

### b. 

### Algonquin shall have in its possession sufficient approved DERCs to meet applicable NOx emission limits as allowed underthis Trading Agreement and 

### Order.

a. Durine: the non-ozone season: Algonquin shall**me~t** 

### a non-ozone seasonal average emission limit of0.15 Ibsf1.1MJ3tu. Priorto October 1, 2003 and October 1, 2004, Algonquin shall estimate and acquire the amount ofDERCs or allowances required for such non-ozone season needed to comply with Section 22a-174- 

### 22(e)(3) ofthe Regulations as foBows: EstimatedDERCs (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 anon-ozone seasonal average actual NOx emission rate exceeding 0.15 IbsJM:MBtu, Algonquin shall calculate and pennanently retire the amount ofDERCs 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 2Algonquin 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.



### . ) v • 

### 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 andkeep records for the turbine of: 

### non-Olone season fuel use and fuel type; non-Olone season NOx emission rates, number ofoperating hours per non-ozone season, the number ofinvalid data hours ofthe tOtal operating 

### hours per non-Olone 

### season; the numberofDERCs in its 

### possession, purchased and used (by serial number

### ifassigned) 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 22a**174<~2** ofthe Regulations

. 4. Record Kecoin2. Algonquin shall retain records and supporting documentation as described in this Trading Agreement and Orderfor a minimum offive years, commencing on the date such records were created. Algonquin shall provide the records specified above to the Conunissioner within thirty (30) days ofreceipt ofa written request from the Commissioner. 5. Reporting. No laterthanJuly 30 ofevery year after issuance ofthis Trading Agreement and Order, Algonquin shall submitin writing to the Commissioner the non-ozone season fuel consumption and amount ofall DERCs used (including serial numbers (ifassigned) and approved DERCs purchased from otherfacilities), for the turbine during the previous Octoberthrough 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) ofthe Regulations, Algonquin may use NOx allowances, purs1?-ant to Section 22a-174-220) ofthe Regulations to achieve all or aportion ofthe reductions required by Section 22a174-22 ofthe Regulations. Any allowance used for compliance with Section 22a174-22(e) ofthe Regulations shall be subject to all restrictions and/orrequirements applicable to DERCs contained in this Trading Agreement and Order. Each allowance used for compliance with Section 22a-174-22 ofthe Regulmions shall 

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

### be deducted from Algonquin's NOx BudgetProgram compliance account upon such use. Allowances shall be considered used for compliance with Section 22a-174-22 ofthe Regulations 3

### Algonquin WindsorLocks LLC Trading Agreement and OrderNo. 8150

;



### .. when they are transferred from the facility's compliance account or overdraft account to a SUlte ofConnecticutNOx 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% ifDERCs arT not in Algonquin's possession for use priono the first day of each non-ozone season. However, based on the gravity ofthe noncompliance, the Commissionermay require additional upward adjustment. 8. Vinta2:e Restriction. For the purposes ofcompliance with Section 22a-174-22 ofthe Regulations, DERCsJallowances shall only remain valid for five (5) calendaryears from the year ofthe generation/allocation ofsuch 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 ofthe Regulations. Notwithstanding the above the DERCslallowances generated/allocated prior to 

### calendaryear 1000 shall be valid for use until December 31, 

### 2004. 9. Extension. No laterthan May 1, 2005, with respect to the turbine, Algonquin shall comply with the requirements ofSubdivision 22a-174-22(d)(2) ofthe Regulations. However, after full program review ofthis and otherTrading Agreements and Orders and, ifdetennined to be 

### appropriate, the Commissionermay grant a written extension ofthis Trading Agreement and Order. 10. Future Compliance Report. On orbefore September I, 2004, Algonquin shall submit areportindicating how the facility shall comply with Section 22a-174-22 of the Regulations with respect to 

### the turbine on and afterMay 1,2005. 11. Full compliance. Algonquin shall not be consideredin full compliance with this Trading Agreement and Order until all actions required by 

### this Trading Agreement and Orderhave 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 Orderin a complete and approvable form. 

### Ifthe Commissionernotifies Algonquin that any document or other action is deficient, and does not approve it with conditions ormodifications, it is deemed disapproved, and Algonquin shall correct the deficiencies and resubmit it within the time specifiedby the Commissioneror, ifno time is specified by the Commissioner, within 30 days ofthe Commissioner's notice ofdeficiencies. 

### 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 Commissionerdeems

4

### Algonquin WindsorLocks LLC Trilding Agreement <lnd OrderNo. 8250 necessary to 

### carry out the purposes ofthis Trading Agreement and Order. Nothing in this parilgrnph shall excuse noncompliance ordelay. 13. Definitions. As used in this Trading Agreement and Order, "Approved DERCs" are those for which the Commissionerhas provided written authorization for use in compliance with Section 22a-174-22 ofthe Regulations; "Commissioner" me::ms the Commissioneror"n representative ofthe Commissioner; "Non-ozone season" means the period from October I through April 30 in any given calendar year. The date of "issuance" ofthis Trading Agreement and Orderis the date the Trading Agreement and Order is deposited in the U.S. mail orpersonally delivered, whicheveris earlier. 14. Dates. The date ofsubmission to 

### the Conunissionerofany document required by this Trading Agreement and Ordershall be the date such document is received by the Commissioner. The date ofany notice by the Commissionerunder this Trading Agreement and Order, including but not limited to 

### notice ofapproval ordisapproval ofany document or other action, shall be 

### !.he date such notice is deposited in the U.S. mail oris personally delivered, whicheveris earlier. Except as Olherwise specified in this Trading Agreement and Order, the word "day" as used in this Trading Agreement and Ordermeans calendarday. Any document or action which is required by this Trading Agreement and Order to be 

### submitted orperfonnedby a date which falls on aSaturday, Sunday or a Connecticutorfederal holiday shall be submitted orperfonned by the next day which is not aSaturday, Sunday or Connecticutor federal holiday. 15. Certification ofdocuments. Any document, including butnOl limited to any nOlice, which is required to be 

### submined [0 

### the Commissionerunder this Trading Agreement and Order shall be 

### signed by Algonquin or, ifAlgonquin is not an individual, by an individual who is an authorized representative ofAlgonquin, in accordance with Section 22a-174-2a(a) ofthe Regulations ofConnecticut 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 1certify, based on reasonable investigation, including my inquiry ofthose individuals responsible for obtaining the infonnation, that the submittedinfonnation is true, accurate and complete to the best ofmy knowledge and belief. 

## runderstand that any false statement made in the submitted infonnation is punishable as acriminal offense under Section 53a-157b ofthe Connecticut General Statutes and any other applicable law."

5Algonquin Windsor Locks LLC Trading Agreement and Order No. 8250 16. Noncomoliance. This Trading Agreemen_t and Orderis a final order ofthe 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 Orderis punishable as a criminal offense under Section 53a-157b ofthe Connecticut General Statutes and any other applicable law. 18. Notice oftransfer: liabilitv ofAlgonauin. Until Algonquin has fully complied with this Trading Agreement and Order, Algonquin shall notify the Commissionerin writing no laterthan 15 days after transferring all or any ponion ofthe facility, the operations, the site orthe business which is the subject ofthis Trading Agreement and Order or after obtaining a new mailing orlocation address. Algonquin's obligations under this Trading Agreement and Order shall not be affected by the passage oftitle to any property to any otherperson or municipality. 

### 19. Commissioner's powers. Nothing in this Trading Agreement and Order shall affect the Commissioner's authority to institute any proceeding ortake 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, orfuture violations oflaw. 

### Ifat any time the Commissionerdetennines that the actions taken by Algonquin pursuant to this Trading Agreement and Orderhave not successfully corrected 

### all violations, fully characterized the extent ordegree ofany pollution, or successfully abated orprevented pollution, the Commissionermay institute any proceeding to require Algonquin to undertake further investigation or further action to prevent or abate violations orpollution. 

### 20. Algonquin's obligations under law. Nothing in this Trading Agreement and Order shall relieve Algonquin ofother obligations under applicable federal, state'and local law. 21. No assurance bv Commissioner. No provision ofthis Trading Agreement and Order and no action orinaction by the Commissioner shall be construed to constitute an assurance by the Commissionerthat the actions taken by Algonquin pursuant to this Trading Agreement and Order will result in compliance orprevent or abate pollution. 22. Access to facilitv. Any representative ofthe Department ofEnvironmental Protection may enterthe facility without prior notice for the purposes ofmonitoring and enforcing the actions required or allowed by this Trading Agreement and Order.

6Algonquin Windsor Locks LLC Tradin!2: A!Z.reement and Order No. 8250



# o 13. No effect on ri!Z.hts ofotherpersons. This Trading Agreement and Order neither cre:J.tes nor affects any rights ofpersons or municipalities that are not panies to this Trading Agreement and Order. 14. No Creation ofPropertv Rights. This Trading Agreement and Order does not create any property rights 1"'ith respect to these DERCs. 15. Notice to Commissioner ofchan!Z.es. Within 15 days ofthe date Algonquin becomes aware ofa change in any infonnation submitted to the Commissioner under this Trading Agreement and Order, or that any such infonnation was inaccurate or misleading orthat any relevant information was omitted, Algonquin shall submit the correct or omitted information to the Commissioner. 26. Notification ofnoncompliance. 

### 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 ofthis Trading Agreement and Order or ofany 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, ifunavoidable, is minimized to the greatest extent possible. Within five (5) days ofthe initial notice, Algonquin shall submit in writing the date, time, and duration ofthe noncompliance and the reasons for the noncompliance or delay and propose, for the review and written approval ofthe 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 ofany compliance dates proposed shall not excuse noncompliance or delay unless specifically so stated by the Commissionerin writing. 27. Submission ofdocuments. 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 ofEnvironmental Protection Bureau of

### AirManagement Emissions and CreditTrading Section 

### 79 Elm Street Hartford, Connecticut 06106-5127

7 

## •

### Algonquin WindsorLocks LLC Trading Agreement nnd OrderNo. 8250 Algonquin consents to 

### the issuance ofthis 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 ofthe Trading Agreement and Order. 

### Algonquin WindsorLocks LLC 

## A " Signature: 

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### Name:

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### Dote: 

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## /_"--'I_C--'3'--

_ Issued as a final orderofthe Commissionerof Environmental Pr

CITY

### OFWINDSOR LOCKS LAND RECORDS 

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MAILED CERTIFIED 

### MAll., RETURN RECEIPT REQUESTED CertifiedDocument No. 

### ,2003

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