# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of The State ofConnecticut and Norwalk Power LLC ) ) ) ) ) Trading Agreement and Order No. 8184 A

Vlhereas, the Commissioner ofEnvironmental Protection ("Commissioner") and Norwalk Power LLC ("NP") 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 credit ("DERC") 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 efNP, the Commissioner fInds the following:

.' 

### 1. This Trading Agreement and Order 5upercedes Trading Agreement and Order 8184 issued on January 12,2000.



## '- 2. NP is an exempt wholesale electric generating company with its principal place of business in Sewickley, Pennsylvania. NP owns one (1) piece offuel-burning equipment ("peaking unit'') identified in Table 1 ofthis Trading Agreement and Order. This peaking unit is a combustion turbine operated at Manresa Island Avenue, South Norwalk, CT ("facility"). 3. Emission testing perfonned on the dates indicated in Table 1, resulted in a NOx emission rates as follows:


### Table 1 Facility/ Fuel Heat Input Stack Test FLER Allowable Date of Next Peaking Unit 

### MMBtu!hr (ppmvd) lbslMMBtu Rate Stack Stack lbsIMMBtu Test Test Due Norwalk-10 #2 oil 256 94.2 0.52 0.29 6/22/01 

## I 6/21/06

i
(Printed on Recyclcd Papcr) 79 Elm Street • Hanford, CT 06106

- 5127 htiP;lldcp.5:atc.CI.1l5

....n EqUDI 0pporlunity EmployuNorwalk Power LLC 2 Trading Agreement and Order No. 8184 A 4. NP exceeds the NOx allowable emission rate for the peaking unit specified in Section 22a-174-22(e) ofthe Regulations as shown in Table 1 ofthis Trading 

### Agreement and Order. 5. Pursuant to the !?epartment ofEnvironmental Protection's 

### "Credit Trading/or Sources with**Jrr~gular** 

### NOxEmissions" policy, with a revised date ofFebruary 27, 2001, anached'-hereto and incorporated by reference into this Trading Agreement and Order as Exhibit I, the peaking units have peak daily Ox emissions greater than three times the average daily emissions during the ozone season and are lherefore considered sources with irregularNOx emissions. 6. Pursuant to Section 22a-174-22(j) ofthe Regulations, during the non-ozone season, NP intends to acquire approved DERCs until May I, 2005 for the peaking units. Pursuant to Section 22a-174-22G) ofthe Regulations, during the ozone season, NP 

### intends to acquire approved Budget discrete emission reduction credits ("BDERCs") until May I, 2005 for the peaking units. B. The Commissioner, in accordance with the provisions ofthis Trading Agreement and Order, and pursuant to Section 22a-174-22(j) ofthe Regulations, hereby allows NP to comply with Section 22a-174-22 ofthe Regulations through use ofDERC and BDERC trading. 

### C. With the agreement ofNP, the Commissioner, acting under Sections 22a-6, 22a-171, 22a174, 22a-176, and 22a-l77 ofthe Connecticut General Statutes, orders NP as follows:

I. Upon issuance ofthis'Trading Agreement and Order, at the facility, NP shall comply with Section 22a-174-22 ofthe Regulations through DERC trading. Until NP 

### achieves permanent compliance with 

### the emission standard in 

### Section 22a-174-22(e) ofthe regulation or

### byMay I, 2005 whichever occurs earlier:

a. NP shall use approved DERCs as required under this Trading Agreement and Order; b. NP shall have 

### in 

### its possession sufficient approved DERCs to meet applicable NOx emission limits as allowed under this Trading Agreement and Order; and

c. NP shall comply during operation ofthepeaking units with the FLERS shown in Table I ofthis Trading Agreement and Order.Norwalk Power LLC

2. DERC use 

### 3 

### Trading Agreement and OrderNo. 8184 A



### a. Until May I, 2005, before the first day ofeach month, NP shall have in its possession sufficient approved DERCs for the peaking un.its based

### on the following calculations. Before the first day ofeach month, 

### hTP shall estimate DERCs required for such month for the peilk'ing units as follows. 

## , i. At all times (mass calculation):

Estimated DERCs 

### (in tons) = {{estimated fuel use in MMBru) x {(FLER).

- (0.95 x NOx allowable emission limit»}**~2000** pounds/ton


### Where: -Allowable emission limit= 

### in Ibs/MJvffiru as shown in Table 1ofthis Trading Agreement and Order.



### • FLER= full load 

### emission rate in 

### Ibs/lvfM:Bru as shown in 

### Table 1of this

Trading Agreement and Order.

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



### ii. During the ozone season only (peak day 

### calculation): the maximum actual excess NOx emissions (in 

### lbs) on any ofthe 

### days projected by 

### the Conunissionerto be "moderateto unhealthful," "unhealthful," or "veryunhealthful," divided by 3 and then divided by 13 

### (with the result in 

### tons): Estimated DERCs 

### (in tons) = [(Maximum estimated excess NOx 

### in Ibs) 3J**~[13** Ibs/day/ton]

b. No later than October 30 of2003, and 2004 calculate and permanentlyretire 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:

### NOf\'ialk Power LLC 4 

### TradingAgreement and OrderNo. 8184 A

. 

# ...

# , c. DERCs (in tons) {(acrual fuel use in MMBru) x «FLER)

- (0.95 x NOx allowable emission limit))}+ 2000pounds/ton OR 

### ii. the maxilflum actual excess NOx emissions (in lbs) on any ofthe 

### days project.ed!by the Commissionerto be "moderate to unhealthful", ''unhealthful'', or "veryunhealthful", divided by 3 and then divided by 13 

### (with the result in tons): Acrual DERCs (tons) used = [(Acrual excess NOx in Ibs) +3] + [13 Ibs/day/ton] As 

### described in 

### Exhibit I ofthis 

### TradingAgreement and Order. to the extent thatDERCs used to offset on peak daybasis exceed the total mass excess emissions. remaining DERCs maybe used in the non-ozone season 

### in the same or subsequent years through May 1, 2005. 

### During the non-ozone season starting on October I, 2003: In 

### addition to meeting the 24-houremission limit in Table 22-1 ofSection 22a174-22 ofthe 

### Regulations, meetanon-Olone season emission limit of0.15 IblMMBru. Prior to October I, 2003 and October 1, 2004, NP shall estimate 

### and acquire sufficientDERCs andlor allowances needed to comply with Section 22a-174-22(e)(3) ofthe Regulations as follows: Estimated DERCs (tons) = [Estimated fuel use 

### in MMBru from October I 

### through April 30 x (Estimated maximum emission rate 

### in IblMMBru during October I through April 30

- (0.95 x 0.15IblMMBru))] + 2000 pounds/ton. 

### d. No later than May31 of2004. calculate and permanentlyretire DERCs used in 

### the precedingnon-Olone season as follows: Acrual DERCs (tons) [Actual fuel use 

### in MMBru from October 1 through April 30 x (average emission rate 

### in IblMMBru during October I through April 30

- (0.95 x 0.15 IblMMBru))] + 2000 pounds/ton.Norwalk Power LLC 

### 5 Trading Agreement and Order. 0.8184 A 3. BDERCs shall only be used by otherNOx budget program sources located in Connecticut. 

### BDERCs shall onlybe used to offset ozone season excess emissions, and shall not be used for compliance during the 

### non-Olone season. BDERCs generated during a given year shall 

### onlybe used through the following ozone season. BDERCs are subject to all DERC requirements set [OM 

### in this Trading Agreement and Order except for those requirements pertaining solely to non-Olone season DERCS and as otherwise maybe provided.

" 

## '

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

### the numberofDERCs in its possession. created, purchased and used (by 

### serial numberif assigned) each month 

### in accordance with 

### the appropriate emission rates and limits in this Trading Agreement and Order; the numberofDERCs used during the ozone season and non-ozone season (theremainder ofthe year); during the ozone season, the ozone classification as forecasted by the Commissioneronthe previous day; as well as documentation attesting to the fact that approvedDERCs used during the ozone season were generated during the ozone season. Generatorcertification ofthis fact shall be
. sufficient. NP shall maintain and submit such records to the Commissionerin accordance with Section 22a-174-22 ofthe Regulations.**,~)** 

### 5. Record Keeping. NP shall retainrecords and supporting documentation as described in

....... . this Trading Agreement and Orderfor aminimum offive years, commencing on the date such records were created. NP shallprovide the records specified above to the Commissionerwithin thirty 

### (30) days ofreceipt ofawrittenrequest from the Commissioner. 6. Annual Emission Statement. No laterthan March I ofevery year afterissuance ofthis Trading Agreement and Order, NP shall include with 

### the Annual Emission Statement provided to the Commissioner, arecord ofeach sale orothertransfer, and use ofany and all ofthe DERCs approved within and subsequent to issuance oftbis Trading Agreement and Orderuntil all suchDERCs have been used orare no longer in NP's possession. NP shall also include actual NOx emissions from thepeaking units and the amount ofall DERCs used (including serial numbers (ifassigned) and approved DERCs generated 

### and/orpurchased from otherfacilities), generated and/or approved for theprevious calendaryear. Thesereports shall be on aform prescribedby the Commissionerand shall be in 

### monthly increments. ShouldNP chooseto discontinue the generation ofDERCs, NP will notifythe Commissionerupon discontinuance.

I**.~.** 7. Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, NP may use 

### NOx allowances, pursuant to Section 22a-174-220) ofthe Regulations to achieve all ora portion ofthe reductions required by Section 22a·174-22 oftbe Regulations. Any allowance used for compliance with Section 22a-174-22(e) ofthe Regulations shall be 

### subject to all restrictions and/orrequirements applicable to DERCs contained in this Trading Agreement and Order. Each allowance used for compliance with Section 22a-

### Norwalk Power LLC 6 

### TradingAgreement and Order No. 8184 A 

### 174-22 ofthe 

### Regulations shall be equivalent to one discrete emission reduction credit and shall be deducted from l\TP's NOx Budget Program compliance account upon such use. Allowances shall be considered used forcompliance with Section 22a-174-22 ofthe Regulations when they are transferred from the facility's compliance account oroverdraft accowlt to aState ofConnecticut 

### NOx allowance retirement account, account ID CT0000000300 in the NOx Allowance Tracking System. I 8. DERC Doubling. At a minimum, DERCs required shall be adjusted upwards by 100% if 

### DERCs are not in NP's possession for use priorto the fIrst day ofeach month or applicable season. Howeverbased on the gravityofthe 

### noncompliance, the Commissionermay require additional upwards adjustment. 9. VintalZe Restriction. For the purposes ofcompliance with Section 22a-174-22 ofthe 

### Regulations, DERCs/aIJowances shall onlyremain valid for five (5) calendar years from the year ofthe generation/allocation ofsuch DERCs/allowances. DERCs/allowances 

### olderthan fIve (5) calendaryears from their creation/allocation are notvalid for use for compliance with Section 22a-174-22 ofthe Regulations. Notwithstanding the above, DERCs/allowances generated/allocated prior to calendaryear2000 are valid for use for 

### compliance with Section 22a-174-22 ofthe 

### Regulations up to and including December31, 2004. 10. FLER Exceedance. Noncompliance with an established FLER shall subject NP to make 

### restitution bymatching the quantity ofemissions (''true up") caused by the exceedance plus a 100% premium. The true up in tons ofDERCs shall be equal to the FLER exceedance in IbsIMMBtu, multiplied by the total heat input during the period of 

### noncompliance divided by 2000 Ibs/ton. lfthe period ofnoncompliance 

### is notknown, the time period from the completion ofthe 

### last/previous Departmentwitnessed emission test through the date the FLERcompliance 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 or take any otheraction to require additional upward adjustment, based on the gravity ofany alleged noncompliance or violation oflaw. II. FLERModification. FLERs set forth in Table I ofthis Trading Agreement and Order 

### may be modified only after the consent ofthe 

### Commissionerbywrinen modification of this TradingAgreement and Order. 12. Emissions Testing. Pursuant to Section 22a-174-22(1<) ofthe Regulations, NP shali 

### conductNOx emission tests ofthe peaking units at least once every five years commencingfrom the dates ofthe NOx emission tests for the peakingunits as provided in i 

### Table 1ofthis TradingAgreementand Order.Norwalk Power LLC 7 Tfading Agreement and OrderNo. 8184 A

... 

### , 

## , , '*

..." 13. Extension. No later than May 1,2005, with respect to the peaking units, 

### 'NP shall comply with the requirements ofSection 22a-174-22(d)(l) ofthe Regulations. However, after full program review afthis and other Trading Agreements and Orders and, 

### ifdetermined to be appropriate, the Commissioner may grant a written extension ofthis Trading Agreement and Order. I' 14. Future Compliance Report. On or before September 1, 2004, NP shall submit areport indicating how the facility shall comply with section 22a-174-22 ofthe Regulations with respect to the Peaking units on and afterMay 1, 2007. 

### 15. Full compliance. NP shall not be considered in full compliance with 

### this Trading Agreement and Order until all actions required by this Trading Agreement and Orderhave been completed as approved and to the Commissioner's satisfaction. 

### 16. Approvals. NP shall use best efforts to submit to the Commissioner all documents required by this Trading Agreement and Orderin acomplete and approvable fonn. Ifthe Commissionernotifies NP that anydocument orother action is deficient, and does not approve it with conditions ormodifications, itis deemed disapproved, and NP shall correct the deficiencies and resubmit it within the time specified by the Commissioneror, ifno time is specifiedby 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 Commissionermay approve the document or other action as submitted or perfonned or with such conditions ormodifications as the Commissioner deems necessary to carry out the purposes ofthis Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance or delay. 17. Definitions. As used in this Trading Agreement and Order, "Conunissioner" means the CommissionerofEnvironmental 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. 18. Dates. The date ofsubmission to the Commissionerofany documentrequired by this Trading Agreement and Order shall be the date such document is received by the Commissioner. The date ofanynotice bythe Commissionerunder this Trading Agreement and Order, including butnot limited to notice ofapproval 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 Ordermeans 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 aNorwalk Power LLC 6 Trading Agreement and Order No. 8184 A

• Connecticut or federal holiday shall be submitted orperformed by the next day which is not a Sarurday, Sunday or Connecticut or federal holiday 19. Certification ofdocuments. Any document, including but not limited to any notice, wruch is required to be submined to the Commissionerunder this Trading Agreement and Order shall be signed byNP pr, ifNP is not an individual, byNP's chiefexecutive officer or a duly authorized representative ofsuch officer, as those terms are defined in Section 22a430-3(b)(2) ofthe Regulations, and by the individual(s) responsible for actually preparing such document, and N"P or NP's chiefexecutive officer and each such individual shall

, certify in writing as follows: "1 have personally examined and am familiar with the information submined in this document and all anachments thereto, and I certify, based on reasonable investigation, including my inquiry ofthose individuals responsible for obtaining the information, that the submined information is true, accurate and complete to thebest ofmyknowledge and belief Iunderstand that any false statement made in the submitted information is punishable as a criminal offense under Section 53a-157b ofthe Connecticut General Statutes and any other applicable law." 20. Noncompliance. 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 Ordermay subject NP to an injunction and penalties. 21. False statements. Any false statement in any information submitted pursuant to this Trading Agreement and Orderis punishable as a criminal offense under Section 53a-157b ofthe Connecticut General Statutes and any other applicable law. 22. Notice oftransfer; liability ofNP and others. Until NP has fully complied with this TradingAgreement and Order, NP shall notify the Commissionerin writing no later than fifteen (15) days after transferring all or anyportion ofany ofthe facilities, the operations, the sites or the businesses which are the subject ofthis Trading Agreement and Order or after obtaining a new mailing or location addresses. NP's obligations under this Trading Agreement and Ordershall not be affected by the passage oftitle to any property to any otherperson ormunicipality. 23. 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 narural resource damages, and to impose penalties for past, present, or future violations oflaw. Ifat any time the Commissioner determines that the actions taken byNP pursuant to this Trading Agreement and Orderhave successfully corrected all violations, fully characterized theNorwalk Power LLC 

### 9 Trading Agreement and Order No. 8184 A
extent or degree of

### any pollution, or successfully abated or prevented pollution, the Commissioner may institute any proceeding to require iP to undenake funher investigation or further action to prevent or abate violations or pollution. 24. J\TJ>'s obligations under law. Nothing in this Trading Agreement and Order shall relieve 

### iF ofother**obligatio~** under applicable federal, state and local law. 

# " 25. No assurance by Co'mmissioner. No provision ofthis Trading Agreement and Order and no action or inaction bythe Commissioner shall be construed to constitute an assurance by the Commissioner that the actions taken byNP pursuant to this Trading Agreement and Order will result in compliance or prevent or abate pollution. 26. Access to facility. Any representative ofthe Department ofEnvironmental Protection may enter any ofthese facilities without prior notice for the purposes ofmonitoring and enforcing the actions required or allowed by this Trading Agreement and Order. 27. No effect on rights ofother persons. This Trading Agreement and Orderneither creates nor affects anyrights ofpersons or municipalities that are not parties to this Trading Agreement and Order. 28. TO Creation ofProperrvRights. This Trading Agreement and 'Order does not create any propertyrights with respect to these DERCs. 29. Notice to Commissioner ofchanges. Within fifteen (15) days ofthe date NP becomes aware ofa change in any information submined to the Commissioner under this Trading Agreement and Order, or tb;at any such information was inaccurate ormisleading or that any relevant information was omitted, NP shall submit the correct or omitted information to the Commissioner. 30. Notification ofnoncompliance. 

### In the event that NP 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, NP shall immediatelynotify 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, ifunavoidable, is minimized to the greatest extent possible. Within five (5) days oftbe initial notice, l\tp shall submit in writing the date, time, and duration ofthe noncompliance and the reasons for the noncompliance or delay and propose, for the review and wrinen approval ofthe Commissioner, dates by which compliance will be achieved, and NP shall comply with any dates which maybe approved in writing bythe Commissioner. Notification by NP shall Dot 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.NOIWalk Power LLC 10 

### Trading Agreement and Order No. 8184 A

" I**,~** 

### 31. Submission ofdocuments. Any 

### document required to be submitted to the Commissioner under this Trading Agreement and Order shall, unless othenvise specified in this Trading Agreement and Order or in writing 

### by the Commissioner, be directed to; 

### Mr. Michael LaFreur
. 

### Department of£nvlTonrnental 

### ProtectIon 

### Bureau ofAir Management Compliance and Field Operations Division Emissions and Credit Trading Section 79 Elm Street Hartford, CT 06106

### Norwalk Power LLC 11 

### Trading Agreement and Order No. 8184 A



# ()

. I ''-'' 

### NP 

### consents 10 

### the issuance ofthis 

### Trading Agreement and Order without funher notice. The 

### undersigned certifies that he/she is fully 

### authorized to enter into this Trading Agreement and Order and to legally bind NP to the tenns and conditions 

### ofthe Trading Agreement and Order. Norwalk Power 

### LLC Signature: NIDne:

# C~',~flC Title

# 'R~IDQI2-I**~'-<JC,-** __ Date: 

# L.f

# --q-D?>

Issued as afinal orderofthe CorrunissionerofEnvirorunent

# ~4~~""~;.L/-,,3,-,,2,---_. 2003.



### CITY OFNORWALK LAND RECORDS MAILED CERTIFIED MAlL,
.. RETURN RECEIPT REQUESTED Certified DocumentNo.