# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENT 

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APR 1 7 2003

In the matter of 

### The State ofConnecticut and Middletown Power LLC." ) ) ) ) ) By Trading Agreement and OrderNo. 8227A



### Whereas, the CommissionerofEnvironmental Protection ("Commissioner") and Middletown Power LLC ("!viP") agree that 

### it is in the public interest that they work 

### cooperativelyto improve the airquality within the State ofConnecticut and that the use ofdiscrete emission reduction (DERC) trading to reduce nitrogen oxide ("NOx") 

### emissions will 

### achieve this result in atimely and cost-effective manner.



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## -...' A. 

### At therequest 

### and with 

### the agreement ofW, the Commissioner finds the following:
1. This Trading Agreement and Order supercedes Consent Order 8227 issued on February 20,2002.
2. MP 

### is an exempt wholesale electric generating company with 

### its principal place ofbusiness in Sewickley, Pennsylvania. 

### :MP purchased from The COIU1ecticut Light and Power Company and now owns one fossil fuel-fired electric generating station, Middletown Station, at 1866 River Road in Middletown, ConneCticut ("facility").
3. At the facility, NRG Middletown Operations Inc. operates fuel burning equipment consisting ofan auxiliary boiler, Connecticut Pennit Number 104· 0002 (''boiler''), which is subject to Subsection 22a-174-22 ofthe Regulations ofConnecticut State Agencies ("Regulations"). The boiler has the capacity to operate on No.6 fuel oil.
4. Emission testing perfonned on the dates indicated in Table I resulted in 

### NOx emission rates set forth as follows: 

### TABLE 1



### I.

..**~.** Emission Fuel Heat Input Emission rates (IbsIMMBtu) Date of Next Unit MMBruIhr Test rate FLER Allowable Emission Emission 

### Ra" Test Test Due Auxiliary #6 oil 160 

### .399 0.44 0.25 5112/01 

# I 5112106

Boiler

(PriDlcll on Recyclcll Paper) 79 Elm Slrecl • Hanford, CT 06106·5127 bllp:l/dcp.SlIlc.el.U$ A" Eq"'QI 0ppOrl"'"i:y**£mplo.~u**Middletown Power LLC 2 Trading Agreement and Order 8227A

5. When operating the boiler, 

### :MP exceeds the NOx allowable emission rate specified in Section 22a.174·22(e) ofthe Regulations as shown in Table I of this Trading Agreement a.1d Order.
6. Pursuant to Section 22a-174-22(j) oftbe Regulations, MJ' proposes, when operating the boiler, to acquire and use DERC trading to comply with the applicable emission limitations contained in Section 22a·174-22(e) ofthe Regulations uiItil May 1, 2007 at the facility in accordance with this Trading Agreement and Order.
7. 

### W proposes to use Full Load Emission Rates ("FLERs") identified in Table 1 ofthis Trading Agreement and Order for the purposes ofcalculating the DERCs required.
B. The Commissioner in accordance with the provisions ofthis Trading Agreement and Order, pursuant to Section 22a-174-220) ofthe Regulations hereby allows MP to complywith Section 22a-174-22(d) ofthe Regulations through use of DERC trading to achieve the NOx emission reduction required by Section 22a· 174-22(d)(I) ofthe Regulations.



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# c. With the agreement of:MP, the Commissioner, acting under Sections 22a-6, 22a· 171. 22a·174, 22a-176, and 22a-177 ofthe Connecticut General Statutes, orders 

### ?v!P as follows:
1. Upon issuance ofthis Trading Agreement and Order, at the facility, 

### :MP shall complywith Section 22a-174-22 ofthe Regulations through DERC trading. Until:MP achieves permanent compliance with the emission standard 

### in Section 22a-174-22(e) ofthe regulation orbyApril 30, 2007, whichever occurs earlier:

a. MP shall use approved DERCs as required underthis Trading Agreement and Order;
b. 

### ?v!P shall have in its possession sufficient approved DERCs to meet applicableNOx emission limits as allowed underthis Trading Agreement and Order; and

c. MP shall comply during operation ofthe boiler with the FLERS shown 

### in Table I ofthis Trading Agreement and Order.



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### Middletown Power LLC

2. DERC 

### use 3 

### Trading Agreement 

### and Order 8227A

a. Until April 30, 2007. before the first day ofeach month, 

### M:P shall have in its possession, sufficient approved DERCs for the boilerbased on the following calculations. 

### Before the first day ofeach month, MP shall estimateDERCs required for such month for the boileras follows. 

# ,
EstimatedDERCs (in 

### taos) = «estimated fuel use in MMBtu)J x «FLER) (0.95 xNOx allowable emission limit») +2000 pounds/ton
Where: 

### -Allowable emission limit= 

### in Ibs/Jv11vfBtu as shown 

### in Table

1

### ofthis Trading Agreement and Order.



### • FLER= full load emission rate in 

### IbsIMMBtu as shown in Table I of

this Trading Agreement and Order.



### • Discount (.95)= %5 design margin applied to the allowable limit.

b. 

### No later than the twentieth dayofeach month, calculate DERCs used 

### in the preceding calendarmonth forthe boileras follows:



### DERCs (in 

### toos) = «(actual fuel use in 

### MMBtu) x «(FLER)

. (0.95 xNOx allowable emission Iimit»)}+ 2000 pounds/ton

3. MP 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 number 

### ifassigned) each month in 

### accordance with the appropriate emission rates and 

### limits in this Trading Agreement and Order; the nwnber of DERCs used during the ozone season and non-ozone season (the remainder of the year); during the ozone season, the ozone classification as forecasted by the Commissioneron the previous day; as well as documentation anesting to the fact that approved DERCs used during the ozone season were generated during the ozone season. Generator certification oithis fact shall be sufficient. 

### :MP shall maintain and submit such records to the Commissioner in accordance with Section 22a-174-22 ofthe Regulations.Middletown Power LLC 

# , Trading Agreement and Order 8227A

..



# , '- 4. Record Keeping. MP shall retain records and supporting documentation as described in this Trading Agreement and Order for a minimum offive years, commencing on the date such records were created. 

### JvfP shall provide the records specified above to the Commissioner within thirty (30) days ofreceipt ofa written request from the Commissioner.
5. Annual Emission Statement. No later than March 1 ofevery year after issuance ofthis Trading Agreement and Order, N1P shall include with the Annual Emission Staterpent provided to the Commissioner, arecord ofeach sale or other transfer, and use ofany and all ofthe DERCs approved within and subsequent to issuance ofthis Trading Agreement and Order until all such DERCs have been used or are no longer in M.P's possession. MP shall also include actual NOx emissions from the boiler and the amount ofall DERCs used (including serial numbers (ifassigned) and approved DERCs generated andlor purchased from other facilities), generated andlor approved for the previous calendar year. These reports shall be on a fonn prescribed by the Commissioner and shall be in monthly increments. Should choose to

. discontinue the generation ofDERCs, 

### MJ> will notify the Commissionerupon discontinuance.
6. Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, MP may use NOx allowances, pursuant to Section 22a-174-220) ofthe Regulations to achieve all or a portion ofthe reductions required by Section 22a-174-22 of the Regulations. Any allowance used for compliance with Section 22a-174- 22(e) oftheRegulations shall be subject to all restrictions andlor requirements applicable to DERCs contained in this Trading Agreement and Order. Each allowance used for compliance with Section 22a-174-22 ofthe Regulations shall be equivalent to one discrete emission reduction credit and shall be deducted from MP's NOx BudgetProgram compliance account upon such use. Allowances shall be considered used for compliance with Section 22a-174-22 of the Regulations when they are transferred from the facility's compliance account oroverdraft account to a State ofConnecticut NOx allowance retirement account, account ID CTOOOOO00300 

### in the Ox Allowance Tracking System.
7. DERC Doubling. At a minimum, DERCs required shall be adjusted upwards by 100% ifDERCs are not in :MP's possession for use prior to the fIrst day ofeach month or applicable season. Howeverbased on the gravity ofthe noncompliance, the Commissionermayrequire additional upwards adjustment.
8. Vintaee Restriction. For the purposes ofcompliancewith 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 DERCs/allowances. DERCs/allowances older than five (5) calendar years from their creation/allocation are not valid for use for compliance with Section 22a-174-22

### Middletown Power LLC 5 

### Trading Agreement and Order 8227A



# , ofthe Regulations. Notwithstanding the above, DERCs/allowances generated/allocated priorto calendaryear 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 MP 

### to make restitution bymatching the quantity ofemissions ("true up") caused by the exceedancepIlUS a 100% premiwn. The true up in tons ofDERCs shall be equal to the FLER exceedance in IbsIMMBtu, multiplied by the total heat input during the period ofnoncompliance divided by 2000 Ibslton. Ifthe period of 

### noncompliance is not known, the time period from the completion ofthe 

### last/previous Department witnessed emission test through the date the FLER compliance is achieved as approved bythe Commissionershall be used. However, nothing 

### in this TradingAgreement and Ordershall affect the Commissioner's authority to institute anyproceedingortake anyotheraction to require additional upward adjustment, based on the gravity ofany alleged noncompliance or violation oflaw.
10. FLER Modification. FLERs set forth in Table I ofthis Trading A!'7eement and 

### Ordermaybe modified only afterthe consentofthe Commissionerby wrinen modification ofthis Trading A!'7eement and Order. 

### 11. Emissions Testing. Pursuant to Section 22a-174-22(k) ofthe 

### Regulations, MP shall conduct NOx emission tests ofthe boiler at least once every five years commencingfrom the dates ofthe

### NOx emission tests for the boiler as provided in 

### Table 1ofthis 

### TradingAgreement and Order.
12. Extension. No later than April 30, 2007, with respect to the boiler, MP shall comply with the requirements ofSection 22a-174-22(d)(I) ofthe Regulations. 

### However, after full program review ofthis 

### and other TradingAgreements and Orders and, ifdetennined to be appropriate, the Commissionermay grant a wrinen extension ofthis TradingAgreementand Order.
13. Future Compliance Report. On orbefore September I, 2006, MP shall submit a repon indicatinghow the facility shall complywith section 22a-174-22 ofthe 

### Regulations with respect to the Boileron and afterMay I, 2007. 14. Full compliance. MP shall notbe considered in 

### full compliance with this TradingAgreement and Order until all actions required by this Trading Agreement and Orderhave been completed as approved and to the Commissioner's satisfaction. 15. Approvals. MP shall use best efforts to submitto the Commissioner all documents required by this TradingAgreement and Order in acomplete and approvable form. Ifthe Commissioner notifies }..1P 

### that any document or other

/MiddlelOwn Power LLC 6 Trading Agreement and Order 8227A

\'. action is deficient, and does not approve it with conditions or modifications, it is deemed disapproved, and 

### rvfP shall correct the deficiencies and resubmit it within the time specified by the Commissioner or, ifno time is specifiedby 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 or other action as submitted orperfonned orwith such conditions or modifications as the CommissionerdeFms necessary to carry out the pwposes ofthis Trading Agreement and-0rder. Nothing in this paragraph shall excuse noncompliance or delay.
16. Definitions. As used in this Trading Agreement and Order, "Commissioner" means the Commissioner ofEnvironmental Protection or an agent ofthe Commissioner. "Ozone season" means the period from May 1 through September 30 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.
17. Dates. The date ofsubmission to the Commissioner ofany document required by this Trading Agreement and Order shall be the date such document is received by the Commissioqer. The date ofanynotice by the Commissioner under this Trading Agreement and Order, including but not limited to notice of approval or disapproval ofany document or other action, shall be the date such notice is deposited 

### in the U.S. mail or is personally delivered, whicheveris earlier. Except as otherwise specified in this TradingAgreement and Order, the word "day" as used 

### in this Trading Agreement and Ordermeans calendarday. Anydocument or action which is required bythis Trading Agreement and Order to be submitted orperfonned by adate 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 or federal holiday.
18. Certification ofdocuments. Any document, includingbut not limited to any notice, which is required to be submined to the Commissionerunder this Trading Agreement and Order shall be signedbyMP or, ifMP is not an individual, by an individual who is an authorized representative ofthe MP, in accordance with Section 22a-174-2a(a) ofthe Regulations ofConnecticut State Agencies, and by the individua1(s) responsible for actuallypreparing such document, and each such individual shall certify in writing as foUows:

"I have personally examined and am familiar

### with the information submitted 

### in this document and all anachments thereto, and Icenify, based on reasonable investigation, including my inquiry ofthose individuals responsible for obtaining the information, that the submitted information is true, accurate and complete to the best ofmy knowledge and belief. I understand that any false statementmade in the submitted information is punishable as acriminal

/Middletown PowerLLC 7 Trading Agreement and Order 8227A offense under Section 53a-157b ofthe Connecticut General Statutes and any other applicable law."
19. oncomDliance. This Trading Agreement and Orderis a final order ofthe Commissioner with respect to the matters addressed herein, and is nonappealable and immediately enforceable. Failure to complywith this Trading Agreement and Order may subject 

### !viP to an injunction and penalties.
20. False statements. 

### 'Any false statement 

### in any infonnation submitted pursuant to this Trading Agreement and Order is punishable as a criminal offense under Section 53a-157b ofthe Connecticut General Statutes and any other applicable law.
21. Notice oftransfer; liability ofMl' and others. Until Ml' has fully complied with this Trading**Agreemen~** and Order. MY shall notify the Commissioner 

### in writing no later than fifteen (15) days after transferring all or anyportion ofany ofthe facilities, the operations, the sites or thebusinesses which are the subject ofthis Trading Agreement and Order or after obtaining a new mailing or location addresses.**~'s** obligations under this Trading Agreement and Order shall not be affected by the passage oftitle to anyproperty to any otherperson or municipality.
22. Commissioner's powers. Nothing in this Trading Agreement and Order shall affect the Commissioner's authorityto 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 

### MJ>**p~uant** to this TradingAgreement and Orderhave successfully corrected all violations, fully characterized the extent or degree of anypollution, or successfully abated orprevented pollution, the Commissioner may institute anyproceeding to require to undertake further investigation or further action to prevent or abate violations orpollution. 

### 23. MP's obli2ations under law. Nothing 

### in this Trading Agreement and Order shall relieve Ml' ofother obligations under applicable federal, state and local law.
24. No assurance bv Commissioner. No provision ofchis 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 

### :rvfP pursuant to this Trading Agreement and Order will result in compliance or prevent or abate pollution.
25. Access to facility. My representative ofthe Department ofEnvironmental Protection may enter any ofthese facilities without prior notice for the purposesMiddletown Power LLC 8 Trading Agreement and Order 8227..0. ofmonitoring and enforcing the actions required or allowed by this Trading Agreement and Order.
26. No effect on rights ofotherpersons. This Trading Agreement and Orderneither creates nor affects any rights ofpersons ormunicipalities that are not panics to this Trading Agreement and Order.
27. No Creation ofPropertvRights. This Trading Agreement and Order does not create any propertyrights with respect to these DERCs.
28. alice to Commissioner ofchanges. Within fifteen (15) days afthe date MP becomes aware ofa change 

### in any information submitted to the Commissioner under this Trading Agreement and Order, or that any such information was inaccurate or misleading or that any relevant information was omitted, 

### M:P shall submit the correct or omitted information to the Commissioner.
29. Notification ofnoncomnliance. 

### In the event that:MY becomes aware that it did not ormay not comply, or did not or may not comply on time, with any requirement ofthis Trading Agreement and Order or ofany document required hereunder, 

### !vIP shall immediately notifyby telephone the individual identified in the next paragraph and shall take all reasonable steps to ensure that any noncompliance or delay is avoided or, iflUlavoidable, is minimized to the greatest extent possible. Within five (5) days ofthe initial notice, 

### MJ> 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 ofthe Commissioner, dates by which compliance will be achieved, and 

### !vIP shall complywith any dates which maybe approved in writingby the Commissioner. Notification by

### MJ> shall not excuse noncompliance or delay, and the Commissioner's approval ofany compliance dates proposed shall not excuse noncompliance or delay lUlless specifically so stated by the Commissioner in writing.
30. Submission ofdocuments. Any docwnent required to be submitted to the Commissioner lUlder this Trading Agreement and Order shall, unless otherwise specified 

### in this Trading Agreement and Order or 

### in writing

### by the Commissioner, be directed to: 

### Mr. Michael LafleUr Deparnnent ofEnvironmental Protection Bureau of

### Air Management Compliance and Field Operations Division Emissions and Credit Trading Section 79 Elm Street Hartford, CT 06I06

### Middletown Power LLC 9 

### TradingAgreement and Order 8227A 

### MP consents to the issuance ofthis 

### Trading Agreement and Order without further notice. The undersigned ceI1ifies that he/she is 

### fully authorized to enterinto this Trading Agreement and Order and to legally bind MP to the tenns and conditions ofthe Trading Agreement and Order.

Middletown PowerLLC 

# e 1/_ A,,' 

### Signature: 

# a.

Name

# '~L- K!uliC

Title 

# R!§ ID

# ncJ fY\tultlj""'er'---

__ Date: 

# 4-01 1-0:::>

Issued as a**fina~der** 

### ofthe Commissionerofthe Department ofEnvironmental Protection on 

# '1;# .2003

ur

### J. Rocque, Jr. 

### ommlSSloner

CITY OF MIDDLETOWN LAND RECORDS
MAILED CERTIFIED 

### MAlL, RETURN RECEIPT REQUESTED
Certified DocumentNo.