STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of

. , The State ofConnectlcul,and ,

Dominion Nuclear Connecticut, Inc.

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Trading Agreement

and Order No. 8222A

Whereas, the Commissioner ofEnvironmental Protection ("Commissioner") and

Dominion Nuclear Connecticut, Inc. ("DNC") 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 (UDERC") trading to reduce nitrogen

oxide ('~Ox·') emissions will achieve this result in a timely and cost-effective marmeT.

A. At the request and with the agreement ofDNC, the Commissioner finds the

following:

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'iJ I. This Trading Agreement and Order supercedes Trading Agreement and

Order 8222 issued on March 29, 2001.

2. On or about March 31, 2001, DNC acquired from Northeast Nuclear

Energy Company (''NNECO'') and now owns and operates the Millstone

Power Station at Rope Ferry Road, Waterford, Connecticut ("facility").

3. At the facility, DNC operates fuel burning equipment consisting oftwo

oil·fired Babcock and Wilcox boilers 1 and 2 ("boilers") which are subject

to Section 22a-174-22 of the Regulations of Connecticut State Agencies

(''Regulations'') pertaining to the control of NOx emissions.

4. Emission testing perfonned on the dates indicated in Table 1, resulted in a

NOx emission rates as follows:

Table 1

DNC - FLER and NOx Allowable Emission Limits (IbslMMBtu)

Emission Fuel Type Hut Emission FLER Allowable Last N,n

Units input T,,' Rate T,,' Emission

Date Test Due

B&WI No.4 fuel oil 69.6 0.26 0.29 .25 4112100 4112105

B&W2 No.4 fuel oil 169.6 0.32 0.35 .25 4112100 4112105

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No. 8222A

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When operating the boilers, DNC exceeds the NOx allowable emission

rate specified in Section 22a-174-22(e) of the Regulations as sho\\'Il in

Table 1 oflhis Trading Agreement and Order.

Pursuant to Section 22a-174-22(j) of the Regulations, DNC proposes,

when operating the boilers, to acquire and use DERC trading to comply

with the applicable emission limitations contained in Section 22a-174-

22(e) oflbe Regulations until May I, 2007 allbe facilily in accordance

with this Trading Agreement and Order.

," DNC proposes 10 use Full Load Emission Rales ("FLERs") identified in

Table I of!his Trading Agreemenl and Order for lbe purposes of

calculating Ihe DERCs required.

The Commissioner, in accordance with the provisions of Section 22a-174-

22(j) ofthe Regulations, allows the use ofpreviously approved unused

NOx DERCs referenced in Table 2 of!his Trading Agreemenl and Order.

These DERCs are subject to the vintage restrictions ofthis Trading

Agreement and Order. Dates after which the unused. DERCs will no

longer be eligible for use as a result ofthe vintage restrictions are provided.

in Table 2 ofthis Trading Agreement and Order in the expiration date

column.

Table 2

PreviousIv Annroved DERCS (to the extent Dot already used)

Year or Ozone season NO.1 DERC Ozone Non-ozone season NO.1 Non- E.Ipiration

Generation serial number I~cason DERC serial number ozone Dale

• Ox season

DERCs NOx

DERC

Pre-2000 I N/A 3 N/A 2 12131/04

B. The Commissioner in accordance with the provisions ofthis Trading Agreement

and Order, pursuanllo Seclion 22a-174-22(j) oflbe Regulations hereby allows

DNC to comply wilb Section 22a-174-22(d) of lbe Regulations through use of

DERC trading to achieve the NOx emission reduction required by Section 22aI74-22(d)(1 ) oflbe Regulations.

C. With the agreement ofDNC, the Commissioner. acting under Connecticut

General Statues Seclions 22a-6, 22a-174, 22a-174, 22a-176, and 22a-I77, orders

DNC as follows:

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I. Upon issuance of this Trading Agreement and Order, at the facility, DNC

shall comply wilb Section 22a-174-22 oflbe Regulations through DERC

trading. Until DNC achieves permanent compliance with the emission

standard in Section 22a-174-22(e) oflbe regulation or by April 30, 2007,

whichever occurs earlier:

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Dominion Nuclear Connecticut, Inc. Trading Agreement and Order

No. 8222A

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a. DNC shall use approved DERCs as required under this Tfading

Agreement and Order;

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

applicable NOx emission limits as allowed under this Trading

Agreement and Order; and

c. DNC shall comply during operation of the boilers with the FLERS

showriin Table 1 afthis Trading Agreement and Order.

2. DERC use.

a. Until April 30, 2007. before the first day of each month, DNC shall have

in its possession sufficient approved DERCs for the boilers based on the

following calculations.

Before the first day of each month, DNC shall estimate DERCs required

for such month for the boilers as follows:

Estimated DERCs (tons) = «(estimated fuel use in MMBru) x «FLER)-

0.95 x NOx Allowable linUt»)) .;. 2000

pounds/ton;

Where:

• Allowable limit = in IbsfM]vffitu as shown in table 1 of

this Trading Agreement and Order.

• FLER = full load emission rate in IbslM}.ffiru 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 day of each month, calculate and pennanently

retire DERCs used in the preceding calendar month for the boilers as

follows:

Acrual DERCs (tons) = «acrual fuel use in MMBru) x «FLER) - (0.95 x

NOx Allowable linUt ))) .;. 2000 pounds/ton.

3. DNC shall make and keep records of: monthly fuel use and fuel type;

excess NOx emissions; the number ofDERCs in its possession, created,

purchased and used (by serial number if assigned) each month in

accordance with the appropriate emission rates and limits in this Trading

Agreement and Order; the number ofDERCs used during the ozone

season and non-ozone season (the remainder ofthe year); as well as

documentation attesting to tile fact that approved DERCs used during the

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Dominion Nuclear Connecticut, Inc. Trading Agreement and Order

No. 8222A

ozone season were generated during the ozone season. Generator

certification ofthis fact shall be sufficient. DNC shall maintain and

submit such records to the Commissioner in accordance with Section 22a174-22 of the Regulations

4. Record Keepimz. DNC shall retain records and supporting docwnentation

as described in this Trading Agreement and Order for a minimwn of five

years, commencing on the date such records were created. DNC shall

provide the records specified above 10 the Commissioner within thirty (30)

days of re~eipt ofa wrinen request from the Commissioner

5. Annual Emission Statement. No later than March I of every year after

issuance ofthis Trading Agreement and Order, D 'C shall include with the

Annual Emission Statement provided to the Commissioner, a record of

each sale or other transfer, and use of any and all oftbe DERCs approved

within and subsequent to issuance ofthis Trading Agreement and Order

until all such DERCs have been used or are no longer in DNC's

possession. DNC shall also include actual NOx emissions from the boilers

and the amount of all DERCs used (including serial numbers (if assigned)

and approved DERCs generated and/or purchased from other facilities),

generated and/or approved for the previous calendar year. These repons

shall be on a form prescribed by the Commissioner and shall be in

monthly increments. Should DNC choose to discontinue the generation of

DERCs, DNe will notify the Commissioner upon discontinuance.

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

DNC may use NOx allowances, througb April 30, 2007, pursuant to

Section 22a-174-22(j) ofthe Regulations to achieve all or a portion of the

reductions required by Section 22a-174-22 ofthe Regulations. Any

allowance used for compliance with Section 22a-174-22(e) of the

Regulations shall be subject to all restrictions and/or requirements

applicable to DERCs contained in this Trading Agreement and Order;

a. In order for DNC to use NOx allowances, DNC 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 of

the Regulations shall be equivalent to one discrete emission

reduction credit. Allowances shall be considered used for

compliance with Section 22a-174-22 ofthe Regulations when they

are transferred from the facility's NOx general account in the

NATS to the CT State NOx Retirement Account (Account ill

CT0000000300 in the NATS).

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Dominion Nuclear Connecticut, Inc. Trading Agieemenr and Order

No. 8222A

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

upwards by 100% ifDERCs are not in DNC's possession prior to the first

day of each month. However based on the graviry ofthe noncompliance,

the Commissioner may require additional upwards adjustment.

8. Vintage Restriction. For the purposes of compliance with Section 22a174-22 of the Regulations, DERCs/allowances shall only remain valid for

five (5) calendar ye.ars from the year ofthe generation/allocation ofsuch

DERCs/allowances. DERCs/allowances older than five (5) calendar years

from their1=reation/allocation are not valid for use for compliance with

Section 22a-174-22 ofthe Regulations. Notwithstanding the above,

DERCsiallowances 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. Nonc;ompliance with an establisbed FLER sball

subject DNC to make restitution by marching the quantity of emissions

("true up") caused by the exceedance plus a 100% premium. The true up

in tons ofDERCs shall be equal to the FLER exceedance in lbs/}..1}..ffitu,

multiplied by the total heat input during the period of noncompliance

divided by 2000 lbslton. lfthe period ofnODcompliance is Dot known, the

time period 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 any proceeding or take any other action to require additional

upward adjustment, based on the gravity of any alleged noncompliance or

violation oflaw.

10. FLER Modification. FLERs set forth in Table 1 of this Trading

Agreement and Order may be modified only after the consent of the

Commissioner by wrinen modification ofthis Trading Agreement and

Order.

. 11. Emissions Testing. Pursuant to Section 22a~ 174-22(k:) of the Regulations,

DNC shall conduct NOx emission tests ofthe boilers at least once every

five years, no later than from the dates ofthe last. Ox emission tests for

tbe boilers as provided in Table I ofthis Trading Agreement and Order.

12. Extension. No later than April 30, 2007, with respect to the boilers DNC

sball comply with the requirements ofSection 22a-174-22(d)(I) ofthe

Regulations. However, after full program review ofthis and other Trading

Agreements and Orders and, if detennined to be appropriate, the

Commissioner may grant a wrinen extension ofthis Trading Agreement

and Order.

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Dominion Nuclear Connecticut, Inc. Trading Agreement and Order

No. 8222A

13. Future Compliance Report. On or before September 1,2006, DNC shall

submit a report indicating how the facility shall comply with section 22a174-22 of the Regulations with respect to the boilers on and after May 1,

2007.

14. Full compliance. DNC 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 Commis'sioner's satisfaction.

" 15. Approvals. DNC shall use best efforts to submit to the Commissioner all

docwnents required by this Trading Agreement and Order in a complete

and approvable form. Ifthe Commissioner notifies DNC that any

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

conditions or modifications, it is deemed disapproved, and DNC 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 ofthe Commissioner's notice of deficiencies. In approving any

document or other action under this Trading Agreement 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 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 a representative of the

Commissioner; and "Ozone season" means the period from May 1 through

September 30 in any given calendar year. The date of "issuance" ofthis

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. Approved DERCs are defined for purposes ofthis Trading

Agreement and Order as those for which the Commissioner has provided

written authorization for use in compliance with Section 22a-174-22 ofthe

Regulations.

17. Dates. The date ofsubmission 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 the date such notice is deposited in the U.S. mail or is

personally delivered, whichever is earlier. Except as otherwise 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 perfonmed by a date which falls on a Saturday, Sunday or a

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Dominion Nuclear Connecticut, Inc. Trading Agreement and Order

No. 8222A

Connecticut or federal holiday shall be submitted or performed by the next

day which is not a Saturday, Sunday or Connecticut or federal holiday.

18. Certification of documents..Any document, including but not limited to

any notice, which is required to be submitted to the Commissioner under

this Trading Agreement and Order shall be signed by DNC or, ifDNC is

not an individual, by an individual who is an authorized representative of

DNC, in accordance with Section 22a-174~2a(a) ofthe Regulations of

Connecticut%State Agencies, and by the individual(s) responsible for

actually p?eparing such document, and each such individual shall certify in

wTiting as follows:

"I have 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 of my knowledge

and belief. I understand that any false statement m~de in the submitted

information is punishable as a criminal offense under §53a-157b of the

Connecticut General Statutes and any other applicable law."

19. Noncompliance. This Trading Agreement and Order is a final order ofthe

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 DNC to an injunction and

penalties.

20. False statements. Any false statement in any information 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 ofDNe. Until DNC has fully complied with

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

writing no later than 15 days ·after transferring all or any portion ofthe

facility, the operations, the site or the business which is. the subject ofthis

Trading Agreement and Order or after obtaining a new mailing or location

address. DNe'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.

22. 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 ofJaw. If at any time the

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Dominion Nuclear Connecticut, rnc. Trading Agreement and Order

No. 8222A

Commissioner determines that the actions taken by DNC 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 DNC to undenake funher investigation

or further action to prevent or abate violations or pollution.

ONe's obligations under law. Nothing in this Trading Agreement and

Order sha~ relieve DNC of other obligations under applicable federal,

state and local law.

24.

25.

26.

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 DNC pursuant to this Trading Agreement and Order will result in

compliance or prevent or abate pollution.

Access to facility. Any representative ofthe Department of

Environmental Protection may enter the facility without prior notice for

the purposes ofmonitoring and enforcing the actions required or allowed

by this Trading Agreement and Order.

No effect on rights of other persons. This Trading Agreement and Order

neither creates nor affects any rights ofpersons or municipalities that are

not panies to this Trading Agreement and Order.

27. No Creation ofPropertv Rights. This Trading Agreement and Order does

not create any property rigbts with respect to these DERCs.

28. Notice to Commissioner of chanoes. Within 15 days ofthe date DNC

becomes aware of a 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 omined, DNC shall submit the correct or omined infonnation to the

Commissioner.

29. Notification of noncompliance. In the event that DNC 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, DNC 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 ofthe initial notice, DNC 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 wrinen approval of the

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Dominion. uclear Connecticut, Inc. Trading Agreement and Order

No. 8222A

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Commissioner, dates by which compliance will be achieved, and DNC

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

Commissioner. Notification by D. TC shall not excuse noncompliance or

delay, and the Commissioner's approval of any compliance dates proposed

shall not excuse noncompliance or delay unless specifically so stated by

the Commissioner in writing.

Submission of documents. Any docwnent required to be submined to the

Cornmissi.qnter 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:

Mrs. Elizabeth McAuliffe

Department ofEnvironrnentaJ Protection

Bureau of Air Management

Emissions and Credit Trading Section

79 Elm Street

Hartford, Connecticut 06106-5127

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Dominion Nuclear Connecticut, Inc. Trading Agreement and Order

No, 8222A

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DNC consents to the issuance of this Trading Agreement and Order without further

notice. The undersigned cenifies that he/she is fully authorized to enter into this Trading

Agreement and Order and to legally bind DNC to the terms and conditions of the Trading

Agreement and Order.

Signature:

Name:

Title:

Date:

Dominion Nuclear Connecticut, Inc.

5£:s ,i ?<t.e..?

s--- I ,lC'\c<S· Ij- - fu -D<f'l ~,-\ -

Issued as a final order ofthe Commissioner ofEnvirorunental Protection

on~U ,2003,

CITY OF WATERFORD LAND RECORDS

MAILED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

Certified Document No.

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