SIP DESCRIPTION - Middletown Power LLC Trading Agreement and Order

No. 8215A Modification 1

I. SIP - DESCRIPTION OF DERC CREATION AND/OR USE

SIP SUMMARY TABLE

TradinQ' AQreement and Order No. 821SA

Middletown Power LLC 1866 River Road Middletown cr 06457

Identifier IClient 7741 Town # 104 Premise # 241 Sequence #

Contact Ms. Cynthia Karlic Tel: (860) 343-6962 Fax (860) 343-6969

RC2ionaiManager

Pollutant and Regulatory Standard: NOx I Section 22a-174-22 of the Regulations of

Connecticut State Agencies.

Nonauainment Area Classification Severe

Annual DERCs needed Estimated to non..<Jzone

Annual DERCs l!cnerated Estimated 50 ozone (BDERCs)

ComDliance Time Period Until Aotil 30 2007.

Max. Emission Rate: CEM and full load emission rate (FLER) for Generation and

Usc. (Sec Table I below):

Table 1

NOx Emission Rates and Allowable Limits

Unit Fuel Maximum Stack Test FLER Allowable Date of Next

PlRnumber Capacity (ppmvd) IbsIMMBtu Rate Stack Stack

MMBtulhr IbsIMMBtu Test Test Due

Boiler 4 #6 oil 4684 CEM CEM 0.25 NA NA

P-I04-0001 #2 oil " " " 0.17 " "

Non-olonec " " " 0.15 " "

II. SPECIAL REQUIREMENTS

a. This Trading Agreement and Order Modification supersedes Trading Agreement and

Order No. 8215A issued on April 30, 2003.

b. Calculations of ~redits used or generated shall be as specified in Trading Agreement and

Order No. 8215A.

c. Starting on October I, 2003 and until April 30, 2007 during the non-ozone season: For

purposes of generating DERCs from the boiler at the facility, Middletown Power LLC

shall usc 0.15 IbsIMMBtu of heat input when operating on No.6 fuel oil, No.2 fuel oil

andlor natural gas as the non-ozone season baseline emission rate for the boiler. Ten

(10) percent of all DERCs (tons) generated by the boiler shall be retired by 'he facility

and permanently removed from all calculations on a non-ozone season basis to assure a

benefit to the environment.
STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

STATE OF CONNECTICUT

AND

MIDDLETOWN POWER LLC

i~~ © 0~][~ ~1 1°1 V! i

Uu su:} 1 ccD4 l'J1RADING AGREEMENT AND

18y --ORDER NO. 8215A

MODIFICATION NO.1

TRADING AGREEMENT AND ORDER MODIFICATION

In the matter of aTrading Agreement and Order between the Commissioner of Environmental

Protection ("Comrrtissioner") and Middletown Power LLC ("MP").

WHEREAS, the Commissioner and tv1P, having agreed to the terms and conditions set forth

in Tra.ding Agreement and Order No. 8215A issued on April 30, 2003. do now, by mutual

agreement, modify said Trading Agreement and Order as follows:

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2. Delete paragraph A.6. and substitute the following therefor:

1. Delete the date September 30, 2004, and substitute therefor May 1, 2007, in

paragraphs A.9., C.I., C2., C3.a., C.3.a. footnote 3, C.3.b., C.3.c., C3.d., C3.e.,

C3.f., and C6.

Pursuant to Section 22a-174-220) of the Regulations, MP intends both to acquire

and generate approved DERCs until May 1, 2007 for boiler 4 at the facility.

Approved DERCs are defined for purposes of this Trading Agreement and Order

as those for which the Commissioner has provided written amhority for use in

compliance with Section 22a-174-22 of the Regulations.

3. Delete paragraph B.1. and substitute the following lherefor:

Comply with Section 22a-174-22(d)(I) of the Regulations through use bf Budge'

Discrete Emission Reduction Credit ("BDERC") and DERC trading.

, .

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4. Delete paragraph C.6.b. and substitute the following therefor:

During the non-ozone season:

During the period from October 1 through April 30, inclusive, each year until May

1, 2007, the boiler shall, in addition to meeting the 24-hour emission limit in

Table 22-1 of Section 22a-174-22 of the Regulations, meet a non-alone season

emission limit of 0.15 IblMMBtu. Prior to October 1,2003, October 1,2004,

October 1,2005, and October 1,2006, MP shall estimate and acquire the amount

of non-Olone season DERCs or allowances needed to comply with Section 22a-

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Middletown Power LLC 2 Trading Agreement and Order

No. 8215A Modification No. I

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6.

174-22(e)(3) of the Regulations as follows:

Estimated DERCs (tons) = [Estimated fuel use in MMBtu from October I through

April 30 x (lower of the estimated seasonal average NOx emission rate or the

proportioned 24-hour allowable emission limit in !b/M]yffiru during October 1

through April 30 - (0.95 x 0.15 IblMMBtu))J + 2000 pounds/ton.

No later than May 31 of 2004, 2005, 2006, and 2007, in addition to the DERCs

retired pursuant to paragraph C.6.a. of this Trading Agreement and Order. MP

shall calculate and pennanenlly relire DERCs used in the preceding non-ozone

season as follows:

Actual DERCs (tons) = [Actual fuel use in MMBtu from October I through April

30 x (lower of the actual seasonal average NOx emission rate or the proportioned

24-hour allowable emission limit in IblMMBtu during October I through April 30

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

Delete paragraph C.lO, and subslitute the following therefor:

Annual Emission Statement and Non-Ozone Season Emission Statement. No later.

than March I for the previous calendar year and July 30 (for the October through

April time period only starting in 2003) of every year after issuance of this

Trading Agreement and Order, MP shall provide to the Commissioner, a record of

each sale or orner 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 MP's possession. MP shall also

include actual NOx emissions from the boiler 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 and October through April time period. These reports shall·be on a

fonn prescribed by the Commissioner and shall be in monthly increments, and by

ozone and non-ozone seasons.

Delete paragraph C.12. and substitute the following therefor:

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

100% if DERCs are not in MP's possession for use prior to the first day of each

month or applicable season. 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 of law. MP shall pennanently retire the

quantity of emissions caused by the exceedance plus a 100% premium within

sixty (60) days of MP's discovery of the DERC shortfall. MP shall certify and
Middletown Power liC 3 Trading Agreement and Order

No. 8215A Modification No. I

report any such DERC retirement [0 the Commissioner in accordance with

paragraph C.31 of this Trading Agreement and Order.

7. Delete paragraph C.14. and substitute the following therefor:

Extension. No later than May 1,2007, with respect to the boiler, MP shall comply

with the requirements of Sections 22a-174-22(d)(I) and 22a-174-22(d)(2)(A) of

the Regulations. There is no assurance that after full program review of this and

other Trading Agreements and Orders that the Commissioner will grant a written

extension of this Trading Agreement and Order.

8. Delete paragraph C.15. and substitute the following therefor:

Future Compliance Report. On or before September I, 2006, MP shall submit a

repon in writing to the Commissioner, as directed in paragraph C.32. of this

Trading Agreement and Order, indicating how the facility shall comply with

section 22a-174-22 of the Regulations with respect to the boiler on and after May

1,2007.

"') "All other terms and conditions of Trading Agreement and Order no. 8215A issued by the

Commissioner acting under Chapter 446c, Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a177 of the Connecticut General Statutes shall remain in effect.

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Middletown Power LLC 4 Trading Agreement and Order

No. 82lSA Modification No.1

MP hereby consents to the entry of this modification to the Trading Agreement and Order

without further notice.

Middletown Power LLC

Signature:

Type Name:

Type Title:

Date:

::::/t:::

~t&DrnL f:-nv;ronrnet\({)! (YBn~er

9-/5-01./

Entered as a modification of an Order of the Commissioner of Environmental Protection

numbered 821SA this _..:~-,,-~__dayof ""'!~%~~'l}f)4

MAJLED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

Certified Document No.