# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

# '~

# -~ in the matter of 

### The State ofConnecticut and Combustion Engineering, Inc. ) ) ) ) ) Trading Agreement and OrderNo. 81;4 A



### . , ".". ,. Whereas, the Commissioner ofEnvironmental Protection ("Conunissioner") and Combustion Engineering, Inc. ("CE") 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 ofdiscrete emission reduction (''DERe'') trading to reduce nitrogen oxide C"NOx'1 emissions will achieve this result in 

### atimely and cost-effective manner: A. At the request 

### and with the agreement cfCE, the Commissionerfinds the following: I. 

### This Trading Agreement and Order 5upercedes Trading Agreement and Order 8154 issued on December 11, 1997, Trading Agreement <4,d Order 8154 Modification issued on June 3, 1998, Trading Agreement and Order 8154 Modification 2 issued on April 29, 1999, and Trading Agreement and Order 8154 Modification 3 issued on April 21, 2002. 2. CE is a corporation, which owns and operates afacility involved 

### in engineering, support services and research and development for combustion equipment at 2000 DayHill Road in Windsor, Connecticut ("facility"). 3. At the facility, CE operates fuel·buming equipment which consists ofthree (3) dual-fuel burning boilers 3, 4 and 5 (''boilers'') capable ofburning natural gas, No.2 fuel oil or No.6 fuel oil which boilers are subject to Section 22a-174-22 ofthe Regulations of Connecticut State Agencies ("Regulations") pertaining to the control ofNOx emissions. 4. Official U.S. Environmental Protection Agency ("EPA") Reference Method 7E stack testing perfonned on 

### 3/4/98, 4/22/97 and 

### 4/18/97 for the boilers, resulted in NOx emission rates as follows:
Table 1 CE

- NQx Emission Rates and R.\CT Limits Obs/MMBtu) Unit Reg. R· Fuel 

# IHeal Input Stack Allowable Use 

# I Emissions

# I Next or Permit P- (MMBtul Test Rate Rate FLER Test Date Test Due BoilerNo.3: No.6 oil 14.3 0.338 0.25 0.39 2128102 2128107 R-212-09 No.2 oil 14.3 0.18 0.20 NIA Nat. Gas 13.8 0.11 0.20 N/A Boiler No.4: No.6 oil 30.8 0.403 0.25 0.47 2114/02 2114/07 R-212-10 No. 2 oil 30.8 0.17 0.20 NIA Nat. Gas 30.8 0.10 0.20 NIA Boiler No.5: No.6 oil 30.8 OJ I7 0,25 0.37 2/13/02 2/13/07 P·212·0S No.2 oil 30.8 0.098 0.20 NIA Nat. Gas 30.8 0.101 0.20 NIA**(P~lDlecl** OD Recycled Paile:) 79 El:n SuecI • Hanlon:!, CT 06106·5127 h:lp:lldep. 'tllc.c: .IIS An Equgl Opporlu"il)' EmploytrCombustion Engineering Inc. 2 Trading Agreement and Order 8154 A 

### 5. When burning No.6 fuel oil in boilers 

### 3, 4 and 

### 5, CE exceeds the NOx allowable emission rate limit specified in Section 22a-I74-22(e) ofthe Regulations. 6. Pursuant to Section 22a-174-220) ofthe Regulations 

### CE proposes to comply with Section 22a-174-22(e) ofthe Regulations, when burning No.6 fuel oil in boilers 3, 4 and 

### 5 through the use ofapproved DERCs at the facility until April 30, 2007. 7. CE proposes to use the full load emission rates ("FLERs") shown in Table I above for the purposes ofcalculating DERCs required for the boilers. 8. The Commissioner, in accordance with the provisions ofTrading Agreement and Order No. 8154 A, pursuant to Section 22a-174-22 ofthe Regulations, approved the NOx DERCs referenced in Table 2 ofthis Trading Agreement and Order. DERC creation serial numbers assigned bythe Departmentto these previously approved DERCs are 

### provided in Table 2 ofthis Trading Agreement and Order. Unused DERCs are subject to the vintage restrictions ofthis Trading Agreement and Order. Dates after which the unused DERCs will no longerbe eligible foruse as aresult oithe vintage resnictions are provided in Table 2 ofthis Trading Agreement and Orderin the expiration date column. Table 2 Purchased APproved DERCs y..,. Ozone season Tons Non-ozone season Tons Expiration Date Pre-1999 SIN not assigned 17 12131/04 2000 SIN not assimed t4 12131/05 2001 SIN not**.assi~ed** 9 SIN not assi2Ded 6 12131/06 B. The Commissioner, 

### in accordance with the provisions ofthis Trading Agreement and Order, pursua.."1t [0 Section 22a-174-220) ofthe Regulations, hereby allows CE to complywith Section 22a-174-22 ofthe Regulations at the- facility through use ofemissions DERC trading. C. With the· agreement ofCE, the Commissioner, acting under Connecticut General Statues Sections 22a-6, 22a-174, 22a·174, 22a-176, and 22a-177, orders CE as follows: 1. Upon issuance oftbis Trading Agreement and Order, at the facility CE shall comply with Section 22a-174-22 ofthe Regulations through emission reduction trading until CE achieves permanent compliance with the emission standards 

### in Section 22a-174-22 (e) ofthe Regulation orby April 30, 2007, whichever is earlier as follows:

a. CE shall use approved DERCs as required under this Trading Agreement and Order; b. CE shall have in its possession sufficient approved DERCs to meet applicable NOx emission limits as allowed under this Trading Agreement and Order; and

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### Combustion Engineering Inc. 3 

### Trading Agreement and Order 8154 A



### ; 

## ) c. CE shall comply during the operation ofthe boilers with the FLERs shown in Table 1 above Oflhis Trading Agreement and Order. 2. DERC Use. Until April 30, 2007, before the first day ofeach month CE shall have in its possession sufficient approved DERCs for such month based on the following calculation:

a. Before the first day ofeach month, CE shall estimateDERCs required for such calendarmonth boilers when burningNo.6 fuel oil and using the appropriate FLER from Table I as follows: Estimated DERCs (tons) use = 

### «Estimated fuel use in MMBtu) x «FLER)

- (0.95 x NOx allowable limit))}+2000 lbs/ton. Where:

• Allowable limit = 

### allowable limitrate in Ibs/M1vfBtu shown in Table I ofthis Trading Agreement and Order.

• FLER = 

### full load emission rate in lbsl1'vlJvfBtu as shown in Table 1 of this Trading Agreement and Order.

• Discount 

### CO.95) = 

### 5% design margin applied to the allowable limit rate.

• Fuel beatin!2: value = 

### 150,000 BTU per gallon b. No laterthan the twentieth day ofeach month, calculate and pezmanently retire actual DERCs used in thepreceding calendarmonth for the boilers when burning No.6 fuel oil using the FLERfrom Table I above and as follows:

Actual DERCs (tons) used = 

### «Actual fuel use in.MMBtu) x «FLER)

- (0.95 x NOx allowable lirnit))}+2000 lbs/ton. 3. CE shall make and keep records of: daily fuel use and fuel type; excess NOx emissions; the number ofDERCs in its possession, created, purchased and used (by serial numberifassigned) each month in accordance with the appropriate emission rates and limits in this Trading Agreement and Order; the number of DERCs used during the ozone season and non-ozone season (the remainder ofthe year) as well as documentation attesting to the fact that approved DERCs used during the ozone season were generated during the ozone season. Generator certification ofthis fact shall be sufficient. CE shall maintain and submit such records to the Commissioner in accordance with Section 22a-174-22 ofthe Regulations. 4. Record Keepimz. CE shall retain records and supporting documentation as described in this Trading Agreement and Order for aminimum offive years, commencing on the date such records were created. CE shall provide the records
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### Combustion Engineering Inc. 4 

### Trading Agreement and Order 8154 A specified above to the Commissionerwithin thiny (30) days ofreceipt ofa wrinen request from the Commissioner. 

### Allrecords shall be maintained in accordance with Sections 22a-174-4 and 22a-174-22 ofthe Regulations. 5. .Annual Emission Statement. No laterthan March 1, ofevery year after issuance ofthis Trading Agreement and Order, CE hall include with the Annual Emission Statementprovided to the Commissioner, for each unit in the averaging set during the previous 12 moqth calendar year a record ofeach sale orothertransfer, and use ofany and all-.ofthe DERCs approved within and subsequent to issuance of this Trading Agreement and Orderuntil all such DERCs have been used. CE shall also include NOx emissions from each boilerusing or generating DERCs, and the amount ofall DERCs used including serial number (ifassigned) and approved DERCs generated andlorpurchased from other facilities), generated and/or approved for the previous calendar year. These reports shall be on a form prescribed by the Commissioner and shall be in monthly increments. Should CE choose to discontinue the generation ofDERCs, CE will notifythe Commissioner upon discontinuance. 6. Allowance Use. Pursuantto Section 22a-174-22(d)(3) ofthe Regulations, CE mayuse NOx allowances, through April 30, 2007, pursuant to Section 22a-174- 22 

### (j) ofthe Regulations to achieve 

### all or aportion ofthe reductions required by Section 22a-174-22 ofthe Regulations. Any 

### allowance used for compliance with Section 22a-174-22(e) ofthe Regulations shall be subject to all restrictions and/or requirements applicable to DERCs contained in this Trading Agreement and Order;

a. In order for ONC to use NOx allowances, CE shall create a general account in EPA's NOx Allowance Tracking System ("NATS"); and b. Each allowance used for compliance with Section 22a-174-22 ofthe Regulations shall be equivalentto one discrete emission reduction credit. Allowances shall be consideredused for compliance with Section 22a-174-22 ofthe Regulations when they are transferred from the facility's NOx general account in theNATS to the CT State Ox Retirement Account (Account 

### II> CTOOOOOOO300 in the NATS). 7. DERC Doubling. At aminimum, DERCs required shall be adjusted upwards by 100% ifDERCs are not in CE's possession priorto the first day ofeach month for use. However, based on the gravity ofnoncompliance, the Commissioner may require additional upward adjustment. 8. Vintae:e Restriction. Forthe purposes ofcompliance with Section 22a-174-22 of the Regulations, DERCs/allowances shall only remain valid for five (5) calendar years from the year ofthe generation/allocation ofsuch DERCslallowances. DERCs/allowances olderthan five (5) calendaryears from their creation/allocation are not valid for use for compliance with 

### Section 22a-174·22

-4.

### Combustion Engineering

# me. 5 

### Trading Agreement and Order 8154 A



### ) ofthe Regulations. Notwithstanding the above, DERCslaiiowances generated/allocated prior to calendar year 2000 are valid for use for compliance with Section**22a-174~22** 

### ofthe Regulations up to and including December 31, 2004. 

### 9. FLER Exceedance. Noncompliance with an established FLER shall subject CE to make restitution by matching the quantity ofemissions ("true up") caused by the exceedanceplus a 100% premium. The true up in 

### tons ofDERCs shall be equal to the FLERexceedance in IbslM:MBtu, multiplied bythe total heat input during the period ofnoncompliance divided by 2000 Ibs/ton. Ifthe period of 

### noncompliance is not known, the timeperiod from the completion ofthe last/previous Department witnessed emission test through the date the FLER compliance is achieved as approved by the Commissioner shall be used. However, nothing in 

### this Trading Agreement and Order shall affect the Commissioner's authority to institute anyproceeding ortake any other action to require additional upward adjustment, based on the gravityofany alleged noncompliance orviolation oflaw. 10. FLERModification. FLERs set forth in Tables 2 and 3 ofthis Trading 

### Agreement and Ordermay be modified only afterthe consent ofthe Commissionerby written modification ofthis Trading Agreement and Order. II. Emissions Testing. Pursuant to Section 22a-174-22(k) ofthe Regulations, CE shall conductNOx emission tests oftbe units 

### at leastonce every five years commencing from the dates oftheNOx emission tests for the boilers as provided in 

### Table 2 ofthis Trading Agreement and Order. 12. Extension. No laterthanApril 30, 2007 for theboilers, CE shall comply with the requirements 

### in Section 22a-174-22 (d) (I) ofthe Regulations. However, afterfull 

### programreview ofthis and otherTrading Agreements and Orders and ifdetermined to be appropriate, the Commissionermay grant written extension ofthis Trading Agreement and Order. 13. Future ComDliance ReDort. 

### On orbefore September 1, 2006, CE shall submit areport indicating how the facility will comply with Section 22a-174-22 ofthe Regulations afterApnl30, 2007. 

### 14. Full comDliance. CE shall notbe considered in full compliance with this Trading Agreement and Orderuntil all actions required by this Trading Agreement and Order have been completed as approved and to the Commissioner's satisfaction. IS. Approvals. CE shall use best efforts to submitto the Commissionerall documents required bythis Trading Agreement and Orderin acomplete and approvable fonn. If 

### the Commissionernotifies CE that anydocument orother action is deficient, and does not approve it with conditions ormodifications, it is deemed disapproved, and CE shall correct the deficiencies and resubmit it within the time specified by the Commissioner or, ifno time is specified by the Commissioner, within 30 days ofthe Commissioner's notice ofdeficiencies. 

## mapproving any document orother action under this Trading -5-Combustion Engineering Inc. 6 Trading Agreement and Order 8154 A

.,-" ':'

.. 

### .....:

; "

. .• J Agreement and Order, the Commissioner may approve the document or other action as submined orperfonned or with such conditions or modifications as the Commissioner deems necessary to carry out the purposes ofthis Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance or delay. 16. Definitions. As used in this Trading Agreement and Order, "Commissioner" means the Commissioner or arepresentative ofthe Commissioner. "Ozone season" means the period from May 1 through September30 

### in any given calendaryear. The date of "issuance" ofthis Trading Agreement and Orderis the date the Trading Agreement and Orderis deposited'in the U.S. mail orpersonally delivered, whicheveris earlier. Approved DERCs are defined for purposes ofthis Trading Agreement and Order as those for which the Commissionerhas provided written authorization for use in compliance with Section 22a-174-22 ofthe Regulations. 17. Dates. The date ofsubmission to the Commissioner ofanydocument required by this Trading Agreement and Order shall be the date such docwnent is received by the Commissioner. The date ofany notice by the Commissionerunder this Trading Agreement and Order, including but not limited to notice ofapproval or disapproval of any document orother action, shall be the date such notice is deposited in the U.S. mail oris personallydelivered, whicheveris earlier. Except as otherwise specified in this Trading Agreement and Order, the word "day" as used in this Trading Agreement and Ordermeans calendar day. Any document oraction which is required by this Trading Agreement and Orderto be submitted orperformed by a date which falls on a Saturday, Sunday or a Connecticut or federal holiday shall be submitted orperfonned by the next day which is not a Saturday, Sunday or Connecticut orfederal holiday. 18. Certification ofdocuments. Any document, including but not limited to any notice, wIDch is required to be submined to the Commissionerunderthis Trading Agreement and Order shall be signed byCE or, ifCE is not an individual, by CE's chiefexecutive officeror a duly authorized representative ofsuch officer, as those terms are defined in §22a-430-3(b)(2) ofthe Regulations ofCOMecticu! State Agencies, and by the individual(s) responsible for actuallypreparing such document, and CE or CE's chief executive officer and each such individual shall certify in writing as follows: "I have personally exarn.lned and am familiar with the information submitted in this document and all anachments thereto, and I certify, based on reasonable investigation, including myinquiry ofthose individuals responsible for obtaining the information, that the submitted infonnation is true, accurate and complete to the best ofmyknowledge 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." 19. Noncomoliance. This Trading Agreement and Orderis a final order ofme 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 CE to an injunction and penalties. 20. False statements. 

### Any false statement in any information submitted pursuant to this Trading Agreement and Orderis punishable as a criminal offense under §53a-157b of the Connecticut General Statutes and any other applicable law. -6-Combustion Engineering Lr:lc. 7 Trading Agreement and Order 8154 A


### 21.



### 22.

7' 

# .,. Notice oftransfer; liabilitv ofCE. Until CE has fully complied with this Trading Agreement and Order, CE shall notify the Commissioner in writing no later than 15 days after transferring all or anyportion ofthe facility, the operations, the site orthe business which is the subject afmis Trading Agreement and Order or after obtaining a new mailing orlocation address. CE's obligations under this Trading Agreement and Order shall not be affected bythe passage oftitle to any property to any otherperson or municipality. I Commissioner's pbwers. Nothing in this Trading Agreement and Order shall affect the Commissioner's authority to institute any proceeding ortake any otheraction to prevent or abate violations oflaw, prevent orabate pollution, recover costs and natural resource damages, and to impose penalties forpast, present, or future violations oflaw. 

### Ifat any time the Commissionerdetennines that the actions taken by CE pursuant to this Trading Agreement and Orderhave not successfully corrected all violations, fully characterized the extent or degree ofany pollution, or successfully abated orprevented pollution, the Commissionermay institute anyproceeding to require CE to undertake further investigation or further action to prevent or abate violations orpollution. CE's obligations under law. Nothing in this Trading Agreement and Order shall relieve CE ofotherobligations under applicable federal, state and local law. 

### 24. No assurance bv Commissioner. No provision ofthis Trading Agreement and Order and no action or inaction by the Commissioner shall be construed to constitute an assurance by the Corrunissionerthat the actions taken by CE pursuant to this Trading Agreement and Order will result in compliance orprevent or abate pollution. ?" 

# .,.

26.

27. 

### 28 Access to facility. Anyrepresentative ofthe Department ofEnvironmental Protection may enterthe facility without prior notice forthe purposes ofmonitoring and enforcing the actions required or allowed by this Trading Agreement and Order. No effect on ri2hts ofotherpersons. This Trading Agreement and Orderneither creates nor affects any rights ofpersons or municipalities that are not parties to this Trading Agreement and Order. No Creation ofPropertv Rights. This Trading Agreement and Order does not create any property rights with respect to these DERCs. Notice to Commissioner ofchanges. Within fifteen (15) days ofthe date CE becomes aware ofa change in any information submitted to the Commissionerunder this Trading Agreement and Order, orthat any such infonnation was inaccurate ormisleading orthat any relevant information was omitted, CE shall submit the correct or omined information to the Commissioner.



# ,

..1 

### 29. Notification ofnoncompliance. 

### In the event that CE becomes aware that it did not or may not comply, or did not ormay not comply on time, with anyrequirement ofthis Trading Agreement and Order or ofany document required hereunder, CE shall immediately notifyby telephone the individual identified in the next paragraph and shall take all reasonable steps to ensure that anynoncompliance ordelay is avoided or, ifunavoidable, is minimized to the greatest extent possible. Within five (5) days ofthe ·7·

### Combustion Engineering Inc. 3 

### Trading Agreement and Order 8154 A initial notice, CE shall submit in writing the date, time, and duration ofrhe noncompliance and the reasons for the noncompliance or delay and propose, for the review and written approval ofthe Conunissioner, dates by which compliance will be achieved, and CE shall comply with any dates which may be approved in writing by the Commissioner. Notification by CE shall not excuse noncompliance or delay, and the Commissioner's approval ofany compliance dates proposed shall not excuse noncompliance or delay unless specifically so stated by the Commissioner in writing. 30. Submissi6n ofdocuments. Any 

### document required to be submitted to the Commissioneruntl.er this Trading Agreement and Order shall, unless othenvise specified in this Trading Agreement and Order orin 'NT'itingby the Commissioner, be directed to:


### Mr. Roland 

### L. SeveranceJr., PE Department ofEnvironmental Protection Bureau ofAirManagement, 5th 

### Floor Emissions and Credit Trading Section 

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

-8-

### Combustion Engineering Inc. 9 

### TradingAgreement and Order 8154 A CE consents to the issuance 

### ofthis Trading Agreement and Orderwithout funher notice. The undersigned certifies that he/she is 

### fully authorized to enterjnto this TradingAgreement and Order and to 

### legally bind CE to the tenns and conditions 

### ofthe Trading Agreement and Order. 

### COl1lbusti Ii I 

### Signature:

# L/S,(.{i~:I2'4~:J:~2::==--_ I 

### Type Narne: --,R".--"K=.e=-ir"h,--"K"n",au=e=-rh"a"'s"'e=---

__ 

### Type Title: Manager. Environmental Engineering

i""!!.\. 

# <OJ Date: April 

### 22, 2003

Issued as afinal orderofthe CommissionerofEnvironmental Protection

on

# ---fflz,-,,&=, .,2003.

CITY OF WlNDSOR LA.NIl RECORDS MAILED CERTIFIED MAIL, RETURN RECEIPT REQUESTED ·9-