STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the maner of

The State of Connecticut and

Bristol-Myers Squibb CompanY'

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Trading Agreement

and Order No. 8220 A

Whereas, the Commissioner ofEnvirorunental Protection ("Commissioner") and Bristol-Myers

Squibb Company ("BMS") 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 (UDERC") 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 ofBMS, the Commissioner finds the following:

1. This Trading Agreement and Order 5upercedes Trading Agreement and Order 8220

issued on September 23, 2001.

2. BMS is a Pbannaceutical Research and Development Company with its principal place

ofbusiness at 345 Park Ave., New York, NY. BMS operates fuel burning equipment

consisting oftwo (2) Diesel Generators identified in Table 1 of this Trading Agreement

and Order ("peaking units") at 5 Research Parkway, Wallingford, CT ("facility").

3. On June 16, 1998 the peaking units were operated for non-emergency use ("peak

shaving"). The NOx emissions were 358.4lbs. Pursuant to Section 22a-174-22(b) of

the Regulations of Connecticut State Agencies ("Regulations"), the peaking units are

subject to Section 22a-174-22(d) through (1<) ofthe Regulations, pertaining [0 the control

of NOx emissions.

4. Official U.S. Environmental Protection Agency ("EPA") Reference Method 7E stack

testing perfonned on November 10, 1999 resulted in NOx emission rates set forth in

Table 1 of this Trading Agreement and Order.

5. BMS exceeds the NOx allowable emission rate limit specified in Section 22a-174-22(e),

ofthe Regulations as shown in Table 10fthis Trading Agreement and Order.

6. Pursuant to Section 22a-174-220) ofthe Regulations, BMS proposes that for the peaking

units, BMS shall use DERC trading to comply with the applicable emission limitations

contained in Section 22a-174-22(e) ofthe Regulations until May 2007 at the facility in

accordance with this Trading Agreement and Order.

(Printed on ReCYcled Paper)

79 Elm SlrHl • Hartford. CT Q61()5.S127

An Equal Opporrunity Employer. MP:lldep.slatfHt us

Celebrating a Century of Forest Conservation Leadership

1901 2001
Bristol-Meyers Squibb Company 2 Trading Agreement

and Order 8220 A

C) .. . ..

Table 1

BMS-NOx EMISSION RATES AND ALLOWABLE LIMITS

Peaking Units Fuel Stack Emission Rates (lbs/M!\rffiru)

Test Stack IFLER I Allowable I Test I

Next Stack

(ppmv) Test I Rate Date Test Due

940 KVA Other oil 1640.7 3.27 3.60 2.56 11110/99 11110/04

Waukesha Diesel

Generator:: 1 ,

, 940 KVA Other oil' 14990 2.84 3.12 2.56 11110/99 11110/04

Waukesha Diesel

Generator #2.

7. BMS proposes ro use full Load Emission Rates CUFLERs") identified in Table I of this

Trading Agreement and Order for the purposes of calculating the DERCs required.

8. Pursuant to the Department of Environmental Protection'S "Credit Trading for Sources

with Irregular NOx Emissions" policy, with a revised date of February 27,2001 attached

hereto and incorporated by reference into this Trading Agreement and Order as Exhibit

1, these peaking units have peak daily NOx emissions greater than three times the

average daily emissions during the ozone season and are therefore considered sources

with irregular NOx emissions.

9. On April 24, 2000, pursuant to Section 22a-174-22m of the Regulations, BMS acquired

from United muminating twenty-five (25) tons of approved ozone DERCs in order to

meet the requirements of Section 22a-174-22(d) of the Regulations and the requirements

of this Trading Agreement and Order. BMS intends to acquire approved DERCs as

needed.

10. By agreeing to the issuance of this Trading Agreement and Order, BMS makes no

admission of fact or law with respect to the matters addressed herein.

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

No. 8092, pursuant to Section 22a-174-22 of the Regulations, approved the NOx DERCs

referenced in Table 2 of this Trading Agreement and Order. DERC creation serial

numbers assigned by the Depanment to these previously approved reductions of NOx

emissions are provided in Table 2 of this Trading Agreement and Order. DERCs are

subject to the vintage restrictions of this Trading Agreement and Order. Dates after

which the DERCs will no longer be eligible for use as a result of the vintage restrictions

are provided in Table 2 of this Trading Agreement and Order in the expiration date

column.
Bristol-Meyers Squibb Company J Trading Agreement

and Order 8220 A

Table?- Year or Ozone season NOx DERC Number or Expiration

Generation serial numbers Ozone Date

Season

DERCs

Pre-1999 CT98/8092NOxoz( 1-25) ?--, 12/31/04

, B. The Commissioner in ~d:ordance with the provisions of this Trading Agreement and Order,

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

Section 22a-174-22(d) of the Regulations through use of DERC trading to achieve the NOx

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

C. With the agreement of BMS, the Commissioner, acting under Connecticut General Statues

Sections 22a-6, 22a-174, 22a-174, 22a-176, and 22a-177, orders BMS as follows:

1. Upon issuance of this Trading Agreement and Order, at the facility, BMS shall

comply with Section 22a-174-22 of the Regulations through DERC trading. Until

BMS achieves pennanent compliance with the emission standard in Section 22aJ74-22(e) of the regulation or by April 3D, 2007 whichever occurs earlier:

a. BMS shall use approved DERCs as required under this Trading Agreement and

Order;

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

NOx emission limits as allowed under this Trading Agreement and Order; and

c. BMS shall comply during operation of the generators with the FLERS shown in

Table 1 of this Trarling Agreement and Order.

2. DERC use.

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

possession sufficient approved DERCs for the peaking units· based on the following

calculations.

Before the first day of each month, BMS shall estimate DERCs required for such

month for the peaking units as follows.

(i) At all times (mass calculation):

Estimated DERCs (tons) ={(estimated fuel use in MMBtu)) x «FLER) - (0.95 x NOx

allowable emission limit»} +2000 pounds/ron
Bristol-Meyers Squibb Company 4 Trading Agreement

llnd Order 8220 A

,

'-

b.

\\'here:

• Allowable limit in Ibs/MMBtu as shown in tllbJe I of this Trading

Agreement and Order.

• FLER= full load emission rate in IbsIMMBtu as shown in lable I of Ihis

Trading Agreement and Order.

• Discounl"(.95);; %5 design margin applied 10 the allowable limit.

During the ozone season only (peak day calculation):

the maximum estimated excess NOx emissions (in lbs) on any of the days

projected by the Commissioner to be "moderate to unhealthful," "unhealthful,"

or "very unhealthful," divided by 3 and then divided by 13 (with the result in

Ions):

Estimated DERCs (tons); (Maximum estimated excess NOx in Ibs)'" 3 ... 13

(Ibslday/ton)

o later than October 30 of 2003, 2004. 2005, and 2006 calculate the DERCs used in

the preceding ozone season as the greater of:

I. the actual total excess emissions for the ozone season in tons, as

follows:

DERCs (in tons); {(actual fuel use in MMBtu) x «FLER) - (0.95 x NOx

allowable emission Jimit»)}+ 2000 pounds/ton

OR

II. the maximum actual excess NOx emissions (in Ibs) on any of the days

projected by the Commissioner to be "moderate to unhealthful",

"unhealthful", or "very unhealthful", divided by 3 and then divided by

13 (with the result in t,ons):

Actual DERCs (tons) used; (Actual excess NOx in Ibs) ...3 ... 13

(Ibslday/ton)
Brlstol·Meyers Squibb Company 5 Trading Agreement

and Order 8.2.20 A

AS described in Exhibit 1 of this Trading Agreement and Order, 10 the extent

that DERCs used to offset on peak day basis exceed the total mass excess

emissions, remaining DERCs may be used in the non-ozone season in the

same or subsequent years through April 30, 2007.

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, 3. No laler than April 30, 2007, BMS shall comply with the requirements of

Subdivision (1) of Subsection (b) of Section 22a-174-22 of the Regulations.

However, after full program review of this and other Trading Agreements and Orders

and, if determined to be appropriate, the Commissioner may grant a wrinen

extension of this Trading Agreement and Order.

4. BMS shall make and keep records of: daily fuel use and fuel type; excess NOx

emissions; the number of DERCs 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 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 Commissioner on the

previous day; as well as documentation attesting to the fact that approved DERCs

used during the ozone season were generated during the ozone season. Generator

certification of this fact shall be sufficient. EMS shall maintain and submit such

records to the Commissioner in accordance with Section 22a-174-22 of the

Regulations

5. Record Keeping. BMS shall retain records and supporting documentation as

described in this Trading Agreement and Order for a minimum of five years,

commencing on the date such records were created. BMS shall provide the records

specified above to the Commissioner within thirty (30) days of receipt of a written

request from the Commissioner

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6. Annual Emission Statement. No later than March 1 of every year after issuance of

this Trading Agreement and Order, EMS 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 of the DERCs approved within and subsequent to issuance of this

Trading Agreement and Order until all such DERCs have been used or are no longer

in BMS's possession. BMS shall also include actual NOx emissions from the

generators 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 reports shall be on a form

prescribed by the Commissioner and shall be in monthly increments. Should BMS
Bristol-Meyers Squibb Company 6 Trading Agreement

and Order 8220 A

choose to discontinue the generation of DERCs. EMS will notify the Commissioner

upon discontinuance.

6. Allowance Use. Pursuant to Section 22a-174-22(d)(3) of the Regulations, EMS may

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

J2a-174·22 of the Regulations to achieve all or a porrion of the reductions required

by Section 22a-174-22 of the Regulations. Any allowance used for compliance with

Section 22a-1'Z.4~22(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 BMS to use NOx allowances, EMS 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

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

account in the NATS to the CT State NOx Retirement Account (Account ID_

CTOOOOOOO300 in the NATS).

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

100% if DERCs are not in EMS's possession prior to the first day of each month.

However based on the gravity of the noncompliance, the Commissioner may require

additional upwardS adjustment.

8. Vintage Restriction. For the purposes of compliance with Section 22a· 174-22 of the

Regulations, DERCs/~lowances shall only remain valid for five (5) calendar years

from the year of the generation/allocation of such DERCs/allowances.

DERCs/alJowances older than five (5) calendar years from their creation/allocation

are not valid for use for compliance with Section 22a-174-22 of the Regulations.

Notwithstanding the above, DERCs/allowances generated/allocated prior to calendar

year 2000 are valid for use for compliance with Section 22a-174-22 of the

Regulations up to and including December 31, 2004. .

9. FLER Exceedance. Noncompliance with an established FLER shall subject EMS to

make restitution by matching the quantity of emissions C'true up") caused by the

exceedance plus a 100% premium. The true up in tons of DERCs shall be equal to

the FLER exceedance in IbsflvfMBtu, mUltiplied by the total heat input during [he

period of noncompliance divided by 2000 Ibs/ton. If the period of noncompliance is

not known, the time period from the completion of the last/previous Deparrment

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
BrislOl-Meyers Squibb Company 7 Trading Agreement

and Order 8220 A

proceeding or take any other action 10 require additional upward adjustment. based

on [he gravity of any alleged noncompliance or violation of law.

10. FLER Modification. FLERs set forth in Table I of this Trading Agreement and

Order may be modified only after the consent of the Commissioner by wrinen

modification of this Trading Agreement and Order.

II. Emissions Testing. Pursuarlt to Section 22a·174-22(k) of the Regulations. BMS

shall conduct ~dx emission teSts of the generators at least once every five years

commencing from the dates of the NOx emission tests for the generators as provided

in Table I of this Trading Agreement and Order.

12. Extension. 0 later than April 30, 2007. with respect to the generators,BMS shall

comply with the requirements of Section 22a·174-22(d)( 1) of the Regulations.

However, after full program review of this and other Trading Agreements and Orders

and, if determined 10 be appropriate, the Commissioner may grant a written

extension of !.his Trading Agreement and Order.

13. Future Compliance Report. On or before September 1,2006, BMS shall submit a

report indicating how the facility shall comply with section 22a-I74-22 of the

Regulations with respect to the Generators on and after May 1, 2007.

14. Full compliance. BMS 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 Commissioner's satisfaction.

15. Approvals. BMS shall use best efforts to submit to the Commissioner all documents

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

If the Commissioner notifies BMS that any document or other action is deficient, and

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

BMS 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 other 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.

16. Definitions. As used in this Trading Agreement and Order, "Approved DERCs" are

those for which the Commissioner has provided written authorization for use in

compliance with Section 22a-I74-22 of the Regulations; "Commissioner" means the

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

period from May I through September 30 in any given calendar year. The date of
BrislOl-Meyers Squibb Company 8 Trading Agreement

and Order 8220 A

··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.

17. Dates. The date of submission 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 Trading

Agreement and Order, including but not limited to notice of approval or disapproval

of any documen~'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 nor a Saturday, Sunday or

Connecticut or federal holiday.

3 ..

18 Certification of documents. Any document, including but not limited 10 any notice,

which is required to be submitted to the Commissioner under this Trading

Agreement and Order shall be signed by BMS or, if BMS is not an individual, by _

BMS's chief executive officer or a duly authorized representative of such officer, as

those terms are defined in Section 22a-43Q-3(b)(2) of the Regulations of Connecticut

State Agencies, and by the individual(s) responsible for actually preparing such

document, and BMS or EMS's chief executive officer and each such individual 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, includi9g my inquiry of those individuals responsible for obtaining the

information, that the submitted information is true, accurate and complete to the best

of my knowledge and belief. I understand that any false statement made in the

submitted information is punishable as a criminal offense under Section 53a·157b of

the Connecticut General Statutes and any other applicable law."

19. Noncompliance. This Trading Agreement and Order is a final 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 BMS 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 53a157b of the Connecticut General Statutes and any other applicable law.

21. Notice of transfer: liability of EMS. Until BMS has fully complied with this Trading

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

l5 days after transferring all or any portion of the facility, the operations, the site or
BnslOl.Meyers Squibb Company 9 Trading Agreement

and Order 8220 A

the business which is the subject of this Trading Agreement and Order or after

obtaining a new mailing or location address. BMS'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.

.,., 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 riolations of law, prevent or abate pollution, recover costs and

natural resource damages, and to impose penalties for past, present, or future

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

by BMS 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 EMS to undertake further investigation or further action to

prevent or abate violations or pollution.

23. EMS's obli2ations under law. Nothing in this Trading Agreement and Order shall

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

24. 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 tak~n by BMS pursuant to this

Trading Agreement and Order will result in compliance or prevent or abate pollution.

25. Access to facility. Any representative of the Department of Environmental

Protection may enter the without prior notice for the purposes of monitoring and

enforcing the actions required or allowed by this Trading Agreement and Order.

26. No effect on ri!!hts o(other persons. This Trading Agreement and Order neither

creates nor affects any rights of persons or municipalities that are not parties to this

Trading Agreement and Order.

27. No CreatIon of Prooerty Ru!hts. This Trading Agreement and Order does not create

any property rights with respect to these DERCs.

28. Notice to Commissioner of changes. Within 15 days of the date BMS becomes

aware of a change in any information submitted to the Commissioner under this

Trading Agreement and Order, or that any such infonnation was inaccurate or

misleading or chat any releyant infonnation wa,s omitted, BMS shall submit the

correct or omitted information to the Commissioner.

....- 29. Notification of noncompliance. In the event that BMS 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, BMS

shall immediately notify by telephone the individual identified in the next paragraph
Bristol·Meyers Squibb Company 10 Trading Agreemem

and Order 8220 A

.j

30.

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 of the initial notice. BMS 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 Commissioner, dates by which compliance

will be achieved, and EMS shall comply with any dates which may be approved in

writing by the Commissioner. Notification by BMS 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

CommissioneT'"in writing.

Submission of documents. Any document required to be submitted to the

Commissioner under this Trading Agreemem and Order shall. unless otherwise

specified in this Trading Agreement and Order or in writing by the Commissioner,

be directed to:

~r. ~ichael ~eur

Emissions Trading Unit

Compliance and Field Operations Oi vision

5th Floor

Bureau of .-\.ir Management

Department of Environmental Protection

79 Elm Street

Hartford, Connecticut 06106
·. Bristol·Meyers Squibb Company " Trading Agreement

and Order 8220 A

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

undersigned certifies that he/she/is fully authorized to enter into this Trading Agreement and Order

and to legally bind BMS to th~ tenns and conditions of the Trading Agreement and Order.

Brisol-Mey rs Squibb Company

Signature:_-,=

Type Name: 1--,tJ.~""'."'-""-~ll.Jr.u"-':>'~l=~ _

Type Title: 5'""",';~ h·",~-\..r F~,. 1..\,,;

Date: .7-,0-03

Issued as a final order of the CQTl)ffiis;io!l.er of the Departmen If

:Environmental Protection on ""'1.;1.4 17, 2003.

~'((4~'" I

Arthur J. Rotque, J,r. ,

commiSSiofei '. ')

CITY OF WALLINGFORD LAND RECORDS U

MAILED CERTJFIED MAIL.

RETURN RECEIPT REQUESTED

Certified Document No.