STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

IN THE MATTER OF

STATE OF CONNECTICUT

AND

JACOBS VEHICLE

SYSTEMS, INC.

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TRADING AGREEMENT

AND ORDER NO. 8230

Whereas, rhe Commissioner of Environmental Protection ("Commissioner") and Jacobs Vehicle Systems,

loc. ("JVS") agree that it is in the public interest that they work cooperatively (Q improve the air quality

within the State of Connecticut and that the use of discrete emission reduction credit CDERC") trading to

reduce nitrogen oxide ("NOx") emissions will achieve this result in a timely and cosc-effective manner:

A. At the request and with the agreement of JVS, the Conunissioner fmds the following:

1. JVS is a corporation which owns and operates a facility located at 22 East Dudley Town

Road, Bloomfield, COIUlecticuI which is engaged in the development and manufacturing of

operating systems, including braking systems and other components, for reciprocating

engines that are used in motor vehicles (the "facility").

2. At the facility, JVS operates two (2) boilers numbered I and 2 (the "Boilers"). The Boilers

are authorized to bum natural gas and residual oil. Boiler #1 is a perrnined source that

operates under permit No. 0030 and Boiler #2 is a registered source (registration no. 0-11-

008). Boiler #1 is a Johnston Boiler Company, PFT-400-4HG-150 with a maximum rated

capacity of 16.74 MMBtu/hr. Boiler #2 is a Combustion Engineering VP9 with a

maximum rated capacity of 32 MMBtu/hr.

3. Although Boiler #1 is authorized under Permit No.OO30 to burn residual oil and natural

gas, it is currently not set up to burn residual oil and NS has represented to the

Commissioner that it has not burned, nor does it intend to burn, residual oil in Boiler #1.

4. At the facility, JVS operates thirteen engine test cells, each consisting of two diesel-fired

reciprocating engines.

5. On December I, 2000, JVS submitted to the Commissioner a Compliance Plan for

Connecticut Regulations for the Control of Oxides of Nitrogen (the "plan"). In an April 20,

2001 lener regarding the plan, DEP informed JVS that the test cells on which JVS'

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1901 2001
Jacobs Vehicle Systems Trading Agreement and Order No. 8230

products are tested are stationary sources. Therefore, DEP determined that the facility is

considered a major source of NO% and is SUbject to Section 22a-174·22 of the Re!!ula!ions.

6. Based on the above, the Boilers are subject to the emission limitations in Section 22a-174-

22(e) of the Regulations. Section 22a·174·22(e) of the RegUlations requires that the Boilers

emit NO% at a ra,fe1ho greater than 0.25 pounds per million British thermal units

("lbs/MMBru") of heat input when burning residual oil and 0.20 lbs/MMBru heat input

when burning natural gas.

7. Stack testing of Boiler #1 burning natural gas and Boiler #2 burning natural gas and

residual oil was conducted by TRC Environmental Corporation ("YRC") on February 19

and 20, 2002. TRC conducted triplicate 60-minute tests on each boiler. TRC submitted a

NOx Emissions Testing report to the DEP in March 2002. The DEP reviewed the report

and informed TRC that the DEP considered the emission values reported to be

representarive nf acmal emissions (April II, 2002 letter from Dennis Demchak of the DEP

tn Scott Paterson of TRC).

8. The average NOx emission rate for Boiler #1 was 0.138 lb/MMBru when burning natural

gas. Boiler #1 operated at an a minimum of71.4% of its maximum rated capacity while

fIring narural gas.

9. The average NO% emission rate for Boiler #2 was 0.072 Ib/MMBru while firing natural gas.

The average NOx emission rate for Boiler #2 was 0.349 lb/MJ"fBru while burning residual

oiL Boiler #2 operated at a minimum of 37.3 % of its maximum rated capacity while firing

natural gas and 40.9% of its maximum rated capacity while firing residual oil.

10. The average NOx emission rates measured for Boiler #1 an~ #2 while fIring natural gas

were in compliance with the allowable NOx emission rate of 0.20 Ib/MMBru when burning

natura} gas.

11. The average NOx emission rate of Boiler #2 burning residual oil exceeds the allowable NOx

emission rate limit for burning of residual oil as defined in Section 22a-174-22 of the

Regulations.

12. Pursuant ro Section 213-174-22(j) of the Regulations, NS will acquire approved DERCs to

offset excess NOx emissions from the Boilers. NS proposes using the FLER identified in

paragraph C.S for the purpose of calculating DERCs required. NS intends to continue

acquiring approved DERCs as needed.

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Jacobs Vehicle Systems Trading Agreement and Order No. 8230

13. Approved DERCs are defined for purposes of this order as those for which the

Commissioner has provided written authorization for use in compliance with Section 22a174-22 of the Regulations.

14. JVS performed the stack testing during the winter months, so that the boilers could be

operated at the maximum load possible during the testing. Although JVS operated the

boilers at the highest load possible for this facility, the boilers did nOt reach 90% of the

maximum rated capacity. The emission values that were measured during the stack testing

are representative of actual emissions at JVS when the boilers are operating at their

maximum loads. Therefore, these emission test results are considered adequate to show

compliance with Section 22a-I74-22 of the Regulations and to set full load emission rates,

as long as JVS agrees to derate its boilers.

15. On June 28, 2002, JVS submitted to the DEP a request for a minor modification of Permit

No. 0030. JVS requested that DE?: a) place a restriction on the maximum firing rate of

Boiler #1, b) eliminate the option of burning residual oil in Boiler #1, and c) correct the

allowable emissions for Boiler #1 when fuing natural gas.

16. DEP informed JVS that a permit was Dot required for Boiler #1 tinder Section 22a-174-3a

of the Regulations. Therefore, with the consent ofJVS, DE? will revoke Permit No. 0030

in accordance with Section 22a-174-2a(h) of the Regulatinns.

17. JVS agrees to restrict the capacity of Boiler #1 and Boiler #2 so that the rate at which each

was tested is considered 90% of the maximum rated capacity for each boiler.

18. Boiler #1 was stack tested at a minimum of 11.9 MMBruIhr, or 71.4% of its maximum

rated capacity of 16.74 MMBruIhr. Therefore, NS will agree not to operate Boiler #1

above 13.2 MMBtu/hr (13.2 MMBtu/hr = (11.9 MMBtulbr/0.9)).

19. Boiler #2 was stack tested at a minimum of 11.9 MMBtuIhr, or 37.3% of its maximum

rated capacity of 32 MMBtulhr while burning natural gas. Boiler #2 was tested at 13.1

MMBtuIbr or 40.9% of its maximum rated capacity of 32 MMBtu/hr wbile burning

residual oiL Therefore, JVS wiII not operate Boiler #2 at a firing rate above 13.2

MMBtu/hr while firing natural gas (13.2 MMBtuibr = (11.9 MMBtuibr/0.9)) or 14.5

MMBtulbr wbile firing residual oil (14.5 MMBtuibr = (13.1 MMBtuibr/0.9)).

B. The Commissioner, in accordance with the provisions of this Trading Agreement and Order, and

pursuant to Section 22a-174-22(j) of the Regulations hereby allows JVS to comply with Section

22a-174-22 of the Regulations through use of DERC trading referenced in Section A, herein, to

acbieve the NOx emission reduction required by Section 22a-174-22(d)(I) of the Regulations.

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Jacobs Vehicle Systems Trading Agreement and Order No. 8230

C. With the agreement of JVS, the Commissioner, acting under Connecticut General Starutes Sections

22a-6, 22a-171, 22a-174, 22a-176, and 22a-177, orders NS as follows:

1. On and afier April 20, 2001 JVS shall have in its possession approved DERCs for Boiler

#2; shall document and record the amounts of all residual oil and approved DERCs used

by Boiler #2; and shall maintain and provide such records in accordance with the

following and Section 22a-174-4 of the Regulations, until April 30, 2007:

a. Before the first day of each month, JVS shall calculate projected DERCs

required for Boiler #2 for the next calendar month as follows:

DERCs (tons) = (Estimated Residual Oil Use in MMBTU X (FLER(lb/MMBTU)

- [.95 x .25 Ib/MMBTU]))/2000 pounds/ton

Where FLER means full load emission rate referenced in paragraph C.5. of

this Trading Agreement and Order;

b. JVS shall have in its possession sufficient approved DERCs no later than

tbe first of each calendar month to assure comoliance for, at a minimum,

that month. Excess DERCs from previous months can be applied to

subsequent months. Approved DERCs sball be acquired until JVS achieves

permanent compliance with the emission standard in Section 22a-174-22(e)

of the Regulations; .

c. DERCs shall only remain valid for five (5) calendar years from the year of

the generation of such DERCs. DERCs generated more than five (5)

calendar years ago are not valid for use.

d. No later than the tenth day of each month, NS shall calculate approved

DERCs used in the preceding calendar month as follows:

DERCs (tons) = (Actual Residual Oil Use in MMBTU X

(FLER{lbIMMBTU] - [.95 x .25 IbIMMBTU)))/2000

poundslton

e. Document and record monthly residual oil used by Boiler #2 and the

approved DERCs used;

f. DERCs required shall be adjusted upwards by 100% if DERCs are not in

JVS's possession prior to use. However, based on the gravity of the

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Jacobs Vehicle Systems Trading Agreement and Order No. 8230

noncompliance, the Commissioner may require additional upward

adjustment.

g. JVS shall notify the Commissioner io writing, within thirty (30) days from

the date of discovery of any deficit io DERCs, and shall submit copies of

supporfing calculations for review and approval by the Commissioner;

h. No later than March 1 of each year this Trading Agreement and Order is in

effect, JVS shall include with its annual emissions report to the

Commissioner, the residual oil consum~d and approved DERCs used

monthly for the previous calendar year;

I. JVS shall keep records and supporting documentation as described in this

section for a minimum of five years, commencing on the date such records

are created.;

J. JYS shall keep documenlation to demonstrate that DERCs used during the

ozone season were generated during the ozone season. The ozone season is

from May 1 through September 30 in any calendar year. Generator

certification of this fact shall be sufficient; and

k. NS shall submit the records specified above to the Commissioner within

thirty (30) days of receipt of a written request from the Commissioner.

I. Pursuant to Section 22a-174-22(d)(3) of the Regularions, JVS may use NOx

allowances, through April 30, 2007, pursuant to Subsection (j) of Section

22a-174-22 of the Regulations to achieve all or a porrioD of me reductions

required by Section 22a-174-22 of the Regulations. Any allowances used

for compliance with Section 22a-174-22(e) of the RegUlations shall be

subject to all restrictions andlor requirements applicable to DERCs

contained in this Trading Agreement and Order.

m. . In order for NS to use NOx allowances, JVS shall create a general account

in EPA's NOx Allowance Tracking System ("NATS"); and

D. 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 Secrion 22a-174-

22 of the Regulations when they are transferred from the facility's NOx

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Jacobs Vehicle Systems Trading Agreement and Order No. 8230

general account in the NATS to the CT State NOx Retirement Account

(Account ID CTOOO0000300 in the NATS).

2. ]VS shall nO[ burn residual oil in Boiler #1 without modification of this Trading

Agreement and Order.

3. NS shall not"operate Boiler #1 at a firing rate above 13.2 MMBru/hr while

burning natural gas. NS shall not operate Boiler #2 at a firing rate above 13.2

MMBtu/hr while burning natural gas or 14.5 MMBtu/hr while burning residual

fuel oil.

4. JVS shall, on a daily basis, document and record fuel consumption, heat input, and

hours of operation for each boiler as necessary to demonstrate compliance with

paragraph C3.

5. On and after the effective date of this Trading Agreement and Order, until April

30,2007, during operation of Boilers #1 and #2, NS shall not exceed the

following FLERs: The FLER for Boiler #2 when burning residual oil is 0.45

Ib/MMBtu. Boilers #1 and #2 shaJJ comply with the NO, rate of 0.20 Ib/MMBtu

when burning natural gas.

6. No later than April 30, 2007, JVS shall comply with the requirements of Section

22a-174-22(e)(I) of the Regulations. However, after fuJi program review of this

and oilier Trading Agreements and Orders and, if determined to be appropriate,

the Commissioner may grant a wrinen extension of this Trading Agreement and

Order.

7. The FLERs may be modified only after the consent of the Commissioner by

wrinen modification of this Trading Agreement and Order.

8. Exceedance of an established FLER shall subject JVS to make restitution by

matching the quantity of emissions ("true up") caused by the exceedance plus a

100% premium penalty. The true up in tons of DERCs shall be equal to the FLER

exceedance in Ibs/MMBtu, multiplied by the total heat input during the period of

non-compliance divided by 2000 lbs/ton. If the period of non-compliance is nor

known, the time period from the completion of the last/previous Department

witnessed. stack test through the dare 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

ta.lee any other action to require additional upward adjustment, based on the gravity of

any alleged noncompliance or violation of law.

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Jacobs Vehicle Systems Trading Agreement and Order. o. 8230

9. JVS shall conduct NOx emission tests of the Boilers at least once every five years

commencing from the dates of the applicable emission test for the boilers in

accordance with the methodology in Section 22a·174·22(k) of the Regulations.

10. Approvals. JVS ~hall use best efforts to submit to the Commissioner all documents

required by this Trading Agreement and Order in a complete and approvable form.

If me Commissioner nOtifies JVS that any document or other action is deficient,

and does not approve it with conditions or modifications, it is deemed disapproved,

and JVS 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

action under this Trading Agreement and Order, the Commissioner may approve

the document or oilier action as submitted or performed or with such conditions or

modifications as the Commissioner deems necessary to carry Out the purposes of

this Trading Agreement and Order. Nothing in this paragraph shall excuse

noncompliance or delay.

11. Definitions. As used in this Trading Agreement and Order, "Commissioner"

means the Commissioner or a representative of the Commissioner; "Ozone

season" means the period from May 1 through September 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.

12. Dates. The date ofsubmission to the Commissioner 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 performed by a

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

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

Connecticut or federal holiday.

13. 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 the responsible corporate officer of NS or

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Jacobs Vehicle Systems Trading Agreement and Order No. 8230

a duly authorized representative ofsuch officer, as those terms are defined in Section

22a-430-3(b)(2) of the Regulations, and by the individual or individuals responsible

for actually preparing such document, each ofwhom shall examine and be familiar

with the information submined in the document and all attachments thereto, and shall

make inquiry of those individuals responsible for obtaining the infonnation to

determine that the information is true, accurate, and complete, and each ofwhom

shall certify in: writing 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 of those 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 statement made in the

submitted information is punishable as a criminal offense under Section 22a-l is of

the Connecticut General Statutes or, in accordance with Section 22a~6 of the

Connecticut General Statutes, under Section 53a-157b of the Connecticut General

Statutes, and in accordance with any other applicable statute."

14. Noncompliance. This Trading Agreement and Order is a fmal order of the

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 JVS to an injunction and penalties.

15. False statements. Any false statement in any information submined pursuant to this

Trading Agreement and Order is punishable as a criminal offense under Section

53a-157b ofthe Connecticuf General Statutes and any other applicable law.

16. Notice of transfer; liability ofJVS. Until JVS has fully complied with this Trading

Agreement and Order, JVS shall notify the Commissioner in writing no later than

fifteen (15) days after transferring all or any portion 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. JVS's obligations under this

consent order shall not be affected by the passage of title to any property to any other

person or municipality.

17. Commissio"ner's powers. Nothing in this Trading Agreement and Order shall affect

the Commissioner's authority to institute any proceeding or take any other action

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Jacobs Vehicle Systems Trading Agreement and Order No. 8230

to prevent or abate violations of law, prevent or abate pollution, recover costs and

natural resource damages, and to impose penaltiesJar past, present, or future

violations of law. If at any time the Commissioner detennines that the actions

taken by NS 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 NS to undertake further investigation or further action to

prevent or abate violations or pollution.

18. JVS's obli!!ations under law. Nothing in this Trading Agreement and Order shall

relieve NS of other obligations under applicable federal, state and local law.

19. No assurance bv Conunissioner. No provision afthis 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 JVS

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

or abate pollution.

20. Access to records and facility. Any representative of the Department of

Environmental Protection may enter and inspect the facility and inspect and copy

records within normal business hours without prior notice for the purposes of

monitoring and enforcing the actions required or allowed by this Trading Agreement

and Order.

21. No effect on ri2hts of other persons. This Trading Agreement and Order neither

creates nor affects any rights of persons who or municipalities which are not

parties to this Trading Agreement and Order.

22. No Creation of Property Ri2:hts. This Trading Agreement and Order does not

create·any property rights with respect to these DERCs.

23. Notice to Corrunissioner of changes. Within fifteen (15) days of the date NS

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 omitted, JVS shall

submit the correct or omitted infOrmation to the Commissioner.

24. Notification of noncompliance. In the event that JVS become.s aware that it did not

or may not comply, or did not or may not comply on time, with any requiremenr

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Jacobs Vehicle Systems Trading Agreement and Order No. 8230

of this Trading Agreement and Order or of any document required hereunder, NS

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.

NS shall also notify the Commissioner in writing within ten days of becoming

aware ofthe noncompliance or potential noncompliance stating the date, time, and

duration of the noncompliance, the reasons for the noncompliance or delay and all

activities which JVS and its agents, employees and representatives took to avoid or

repair the results of the noncompliance and prevent the noncompliance, and propose,

for the review and written approval of the Commissioner, dates by which compliance

will be achieved. NS shall comply with any dates, which may be approved in

writing by the Commissioner. Notification by NS shall not excuse noncompliance

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

Dol excuse noncompliance or delay unless specifically so stated by the Commissioner

in writing.

25. 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 writirlg by the Commissioner,

be directed to:

Mr. Michael LaFleur

Department ofEnvironmental Protection

Bureau ofAir Management

Compliance and Field Operations

Emission and Credit Trading Section

79 Elm Street

Hartford, Coonecticu! 06106

JVS consents to the issuance of this Trading Agreement and Order without further notice.

The uII:dersigned certifies that helshe is fully authorized to enter into this Trading Agreement

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Jacobs Vehicle Systems Trading Agreement and Order No. 8230

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

Order.

Signarure: ~h~

Type Name: Anthony Guerrero

Type Title: Compliance Engineer

Arthur J. cqQe, J)./

COmrrllS( ner k'

LAND RECORDS U

!

Issued as a final order of the Commissioner otiE viro

2002.

Date:

TOWN OF BLOOMFIELD

MAJLED CERTIFIED MAJL,

RETURN RECEIPT REQUESTED

Certified Document

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