STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

State ofConnecticut

and

Algonquin Power Windsor Locks, LLC

)

)

) Trading Agreement and Order No. 8299

WHEREAS, the Commissioner ofEnvironnlental Protection ("Commissioner") and Algonquin Power

Windsor Locks, LLC ("Respondent") agree that the Commissioner may issue a penuit or order to allow

emissions trading in accordance with Section 22a-174-22G) ofthe Regulations ofConnecticut State

Agencies ("Regulations") as a method of compliance with Section 22a-174-22 ofthe Regulations:

A. At the request and with the agreement ofRespondent, the Commissioner finds the following:

1. This Trading Agreement and Order supersedes Trading Agreement and Order 8261 and all

subsequent modifications thereto.

2. Respondent is a corporation that owns and operates a cogeneration plant at 26 Canal Bank

Road, Windsor Locks, Connecticut ("facility").

3. At the facility, Respondent operates the emission unit described in Table 1 below, which is

subject to Section 22a-174-22 ofthe Regulations ofConnecticut State Agencies

("Regulations") pertaining to the control ofNitrogen Oxide (NOx) emissions.

4. For the purposes ofthis Trading Agreement and Order, the following definitions shall apply:

a. Allowable Emission Limit (AEL): the applicable NOx emission limit set forth

in Section 22a-174-22(e) or Section 22a-174-22(f) ofthe Regulations

corresponding to the emission unit described in Table 1 ofthis Trading

Agreement and Order

b. Allowance: CArR NOx Ozone Season allowance originally allocated to a

CArR NOx Ozone Season unit, as defined in Section 22a-174-22c ofthe

Regulations, located in the State ofConnecticut ora NOx allowance

designated specifically for compliance during Ozone Season control periods

and allocated to a CArR NOx Ozone Season unit located in the State of

Connecticut after the date ofissuance ofthis Trading Agreement and Order.

c. CArR NOx Ozone Season unit: shall be as defined in Section 22a-174-22c of

the Regulations

d. CEMS: Continuous Emissions Monitoring System

(Printed on Recycled Paper)

79 Elm Street 0 Hartford, CT 06106-5127

www,ct.gov/dep

An Equal Opportunity Employer
Algonquin Power Windsor Locks, LLC 2 Trading Agreement and Order 8299

e. Discrete Emission Reduction Credit (DERC): a unit that was generated and

approved by the Commissioner in accordance with a Trading Agreement and

Order issued by the Commissioner or generated and approved by the

Commissioner in accordance with a protocol submitted and approved pursuant

to Section 22a-174-38 ofthe Regulations. Such unit is equivalent to 1 ton of

NOx emissions and may be used for emissions trading in accordance with

Section 22a-174-220) ofthe Regulations, subject to the provisions ofPart B of

this Trading Agreement and Order.

f. Non-Attaimnent Area: means the geographic area which has been designated

as nonattaimnent pursuant to 40 CFR 81 in accordance with the provisions of

42 USC 7407 (Section 107 ofthe Act). Pursuant to 40 CFR 81.307, the

designated ozone non-attaimnent areas in the State ofConnecticut are: the

Greater Connecticut, CT area and the New York-Northern New Jersey-Long

Island, NY-NJ-CT area.

g. CAIR NATS: "CArR NO, Ozone Season Allowance Tracking System" as

defined in 40 CFR 96.302.

h. Ozone Season: May 1 through September 30 of each calendar year or such

period as defined by the U.S. Enviromnental Protection Agency, subsequent to

the issuance ofthis Trading Agreement and Order.

1. Non-Ozone Season: the period of consecutive calendar months between two

successive Ozone Seasons

_.

Table 1

CAIR NOx Ozone Season Unit

UNIT- Fuel Heat Input (MMBtu) Allowable Emission Limit

reg. or permit no. (AEL)-LbsIMMBtu

GE PB654I(B) Nat. Gas 555.2 .15

Cogeneration Turbine #2 Fuel 529.5 During the Non-Ozone Season

P-213-0029 "- .-_...,._,""" . -

5. The Respondent agrees that the actual NOx emissions rate from the emission unit

described in Table 1, at times, exceeds the corresponding AEL.

6. Pursuant to Section 22a-174-22(j) ofthe Regulations, Respondent proposes to comply

with Section 22a-174-22(e) ofthe Regulations, when operating the emission unit

described in Table 1 by means of emissions trading in accordance with the provisions of

this Trading Agreement and Order.

7. The Respondent proposes to use the actual non-ozone season average emission rate

measured by CEMS for the purposes of calculating Actual DERCslAllowances Required

for the emission unit described in Table 1.
Algonquin Power Windsor Locks, LLC 3 Trading Agreement and Order 8299

The Commissioner, in accordance with Section 22a-174-22(j) ofthe Regulations hereby allows

Respondent to comply with Section 22a-174-22 ofthe Regulations at the facility through the use of

emissions trading, subject to the provisions ofthis Trading Agreement and Order.

B. With the agreement ofRespondent, the Commissioner, acting under Sections 22a-6, 22a-174, 22a·

176, and 22a-177 ofthe Connecticut General Statutes, hereby orders Respondent as follows:

1. Expiration ofthis Trading Agreement and Order: The Respondent may only use emissions

trading, subject to the provisions ofthis Trading Agreement and Order, until the date of

expiration ofthis Trading Agreement and Order. The date of expiration ofthis Trading

Agreement and Order shall be the earlier of:

a. January 1,2013;

b. The date upon which the Respondent demonstrates to the Commissioner's

satisfaction that actual NOx emissions from the emission unit, at all times,

does not exceed the corresponding AEL(s);

c. The date specified in any written notice from the Commissioner stating that the

Respondent is no longer allowed to use emissions trading due to the

Respondent's violation of any provision ofthis Trading Agreement and Order;

or

d. The date specified in any written notice from the Commissioner, notifying the

Respondent that the Commissioner has determined the use of emissions trading

as a compliance option has been further restricted, modified or nullified by:

(i) the promulgation of an Act, Statute, or Regulations; or

(ii) the issuance of a judgment or court order.

2. Respondent shall obtain and use sufficient DERCs andlor Allowances in such a manner as to

comply with Paragraph B.7 ofthis Trading Agreement and Order. All Allowances used must

come from an emission unit that is within the same ozone nonattainment area as the

Respondent. Any Allowances used to comply with this Trading Agreement and Order must

be allocated for the control period that occurs during the same year those allowances are used

for compliance with this Trading Agreement and Order.

3. Prior to using Allowances in accordance with Paragraph 8.7 ofthis Trading Agreement and

Order the Respondent shall obtain a General Account or Compliance Account in the CA1R

NATS.

4. Vintage Restriction. For the purposes of compliance with Section 22a-174-22 ofthe

Regulations and the provisions ofthis Trading Agreement and Order, DERCs shall only

remain valid for five (5) calendar years from the year ofthe generation ofsuch DERCs.

DERCs older than five (5) calendar years from their creation are not valid for use for

compliance with Section 22a-174-22 ofthe Regulations and the provisions ofthis Trading

Agreement and Order
Algonquin Power Windsor Locks, LLC 4 Trading Agreement and Order 8299

5. Ozone Season Fuel Use Restriction: Notwithstanding the provisions ofParagraphB.2 ofthis

Trading Agreement and Order, when operating the emission unit described in Table I during

the Ozone Season, the Respondent shall operate those units while firing or co-firing the lowest

NOx emitting fuel type or combination offuel types that the unit is authorized to bum in

accordance with Departmental permit, registration, or applicable regulation.

6. Notwithstanding Paragraph B.5 ofthis Trading Agreement and Order, during the Ozone

Season, the Respondent may operate the emission units described above on fuels that result in

higher emissions ofNOx, if either:

a. the availability offuel oil that complies with Paragraph B.5 is inadequate to meet

the needs ofresidential, commercial and industrial users in this state and that such

inadequate supply constitutes an emergency; or

b. the supply of gaseous fuels to the emission units is interrupted due to inadequate

supply or in accordance with an interruptible supply agreement between the

Respondent and the gaseous fuel supplier.

c. the purchase ofthe lowest NOx emitting fuel type will prevent the unit from

responding to an ISO-New England dispatch directive on a timely basis under an

emergency power shortage event in Connecticut or the rsO-NE region.

7. Non-Ozone Season DERC/Allowance Use. The Respondent shall possess a quantity of

DERCs and/or Allowances that equals or exceeds the quantity ofNon-Ozone Season Actual

DERCs/Allowances Required for that Non-Ozone Season. Compliance with Paragraph B.7 of

this Trading Agreement and Order shall be determined as follows:

a. Before the first day of each Non-Ozone Season, Respondent shall estimate DERCs

and/or Allowances required for that Non- Ozone Season for the emission unit

described in Table I based on the average actual NOx emission rate from the

emission unit and an emission limit of 0.15 Ib/mmbtu as follows:

Estimated Non-Ozone Season DERCs/Allowances Required =

{(Estimated Non-Ozone Season fuel use in MMBtu) x «estimated average NOx Emission

Rate Ib/mmbtu) - (0.95 x 0.15Ib/mmbtu»} + 2000 Ibs/ton

b. No later than thirty (30) days after the end of each Non-Ozone Season, the

Respondent shall calculate Actual Non-Ozone Season DERCs and/or Allowances

used during that Non-Ozone Season for each emission unit as follows:

Actual Non-Ozone Season DERCs/Allowances Required =

{(Actual Non-Ozone Season fuel use in MMBtu) x «Non-Ozone Season Average Actual NOx

Emission Rate Ib/mmbtu) - (0.95 x 0.15 Ib/mmbtu»}+2000 Ibs/ton

8. Not more than thirty (30) days after the completion ofthe Non-Ozone Season, the Respondent

shall deduct a quantity ofDERCS from the current balance ofDERCs possessed by the
Algonquin Power Windsor Locks, LLC 5 Trading Agreement and Order 8299

Respondent and/or transfer a quantity of Allowances from the Respondent's NOx General

Account or Compliance Account to the CT State NOx Retirement Account (Account ID

CT0000000300 in the CAIR NATS) such that the total is equal to Actual Non-Ozone Season

DERCs/Allowances Required for the most recently completed Non-Ozone Season.

9. Doubling:

Ifthe Actual DERCs/Allowances Required for any Non-Ozone Season, determined in

accordance with Paragraph B.7, exceeds the quantity ofDERCs and/or Allowances in the

Respondent's possession on the first day ofthat Non-Ozone Season, then in addition to the

deduction or transfer specified in Paragraphs B.8, the Respondent shall also deduct a quantity

ofDERCs from the current balance ofDERCs possessed by the Respondent and/or transfer a

quantity of Allowances from the Respondent's NOx General Account or Compliance Account

to the CT State NOx Retirement Account (Account ID CT0000000300 in the CAIR NATS)

such that the total is equal to Actual Non-Ozone Season DERCs/Allowances Required for the

most recently completed Non-Ozone Season. Such additional DERC deduction or Allowance

transfer shall be performed at the same time as any DERC deduction or Allowance transfer

specified in Paragraph B.8 ofthis Trading Agreement and Order.

Notwithstanding the provisions of Paragraph B.9 ofthis Trading Agreement and Order, any

violation of Paragraphs B.7 ofthis Trading Agreement and Order may be subjectto additional

enforcement action as may be deemed appropriate by the Commissioner in accordance with

the Department's enforcement response policy.

10. Not more than thirty (30) days after the completion of each Non-Ozone Season, the

Respondent shall demonstrate that any Allowances used for compliance with this Trading

Agreement and Order during the each non-ozone season are surplus, quantifiable, enforceable

and permanent. This shall be determined by demonstrating that the actual NOx emissions

during the ozone season, as reported to the United States Enviromnental Protection Agency,

from the emission unit to which the Allowances were originally allocated were equal to or less

than the amount of Allowances allocated to such unit by the State ofConnecticut minus the

Allowances used for compliance with this Trading Agreement and Order.

11. Maintenance and Tune-up. Not more than 1 year from the date ofissuance ofthis Trading

Agreement and Order, the Respondent shall perform maintenance and inspection ofthe

emission unit listed in Table I. Such maintenance and inspection shall include, but not be

limited to, the following:

a. Inspect the combustion system, and clean or replace any components ofthe

combustion system as necessary, in accordance with manufacturer's specification

or current good engineering practice;

b. Inspect the system controlling the air-to-fuel ratio, and ensure that it is calibrated

and functioning in accordance with the manufacturer's specifications or current

good engineering practice;

c. Measure the operating parameters ofthe emission unit used to determine that the

emission unit is operating in accordance with manufacturer's specification or
Algonquin Power Windsor Locks, LLC 6 Trading Agreement and Order 8299

current good engineering practice prior to and after any adjustments are made

during maintenance, tune-up, or inspection activity;

d. Make and keep records including, but not limited to, the following:

I. Demonstration that any maintenance, tune-up, and/or inspection

activity performed on the emission unit described in Table 1 in

accordance with Paragraph B.ll ofthis Trading Agreement and Order

has been performed in accordance with the manufacturer's

specifications or current good engineering practice,

11. The date and a description of any maintenance, tune-up, and/or

inspection activity performed on the emission unit described in Table 1

in accordance with Paragraph B.ll ofthis Trading Agreement and

Order,

iii. The name, title and affiliation ofthe person conducting any

maintenance, tune-up, and/or inspection activity performed on the

emission unit described in Table 1 in accordance with Paragraph B.ll

ofthis Trading Agreement and Order,

IV. The operating parameters ofthe emission unit used to determine that

the emission unit is operating in accordance with manufacturer's

specification or current good engineering practice prior to and after any

adjustments are made during maintenance, tune-up, or inspection

activity perfonned in accordance with Paragraph B.ll ofthis Trading

Agreement and Order.

12. Record Keeping;

a. Not more than thirty (30) days after the completion of each Non-Ozone

Season, the Respondent shall record the Non-Ozone Season average NOx

emission rate for the emission unit described in Table 1, the quantity of

DERCs and/or allowances possessed on the first day ofthe Non-Ozone

Season, and the quantity of DERCs deducted and/or Allowances transferred

in accordance with Paragraphs B.8 and B.9 ofthis Trading Agreement and

Order.

b. On each day, during the Ozone Season, that the Respondent operates in

accordance with Paragraph B.6 ofthis Trading Agreement and Order, the

Respondent shall make and keep records of all emissions unit operations in

accordance with Paragraph B.6, including copies of all written

correspondence demonstrating that operations are due to one or more ofthe

factors described in Paragraph B.6.a through Paragraph B.6.c

13. Respondent shall retain records and supporting documentation required by this Trading

Agreement and Order for a minimum offive years, commencing on the date such records were

created. Respondent shall provide the records specified above to the Commissioner within

thirty (30) days ofreceipt of a written request from the Commissioner. All records shall be

maintained in accordance with Sections 22a-174-4 and 22a-174-22 ofthe Regulations.
Algonquin Power Windsor Locks, LLC 7 Trading Agreement and Order 8299

14. Reporting: Not later than July 30 of each calendar year, the Respondent shall submit a written

report containing copies of all records required pursuant to Paragraph 8.12 ofthis Trading

Agreement and Order. The Commissioner may prescribe the forms to be used for the

submission ofthese reports. The Respondent shall submit these reports on such forms, if

prescribed by the Commissioner.

15. Full compliance. Respondent 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.

16. Approvals. Respondent shall use best efforts to submit to the Commissioner all documents

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

Commissioner notifies Respondent that any document or other action is deficient, and does

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

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

perfonned 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.

17. Definitions. As used in this Trading Agreement and Order "Commissioner" means the

Commissioner or a representative ofthe Commissioner; 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.

18. 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 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 perfonned by a date which

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

perfonned by the next day which is not a Saturday, Sunday or Connecticut or federal holiday.

19. 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 Respondent or, ifRespondent is not an individual, by an individual,

employed by the Respondent, who satisfies the criteria set forth in Section 22a-174-2a(a)(I) of

the Regulations ofConnecticut State Agencies and by the individua1(s) responsible for

actually preparing such document. Each individual who signs documents in accordance with

this Paragraph 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,
Algonquin Power Windsor Locks, LLC 8 Trading Agreement and Order 8299

including my inquiry ofthose individuals responsible for obtaining the infonuation, 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 may be

punishable as a criminal offense under Section 53a-157b ofthe Connecticut General

Statutes and any other applicable law."

20. 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 Respondent to an

injunction and penalties.

21. False statements. Any false statement in any infonuation submitted pursuant to this Trading

Agreement and Order may be punishable as a criminal offense under Section 53a-157b ofthe

Connecticut General Statutes and any other applicable law.

22. Notice oftransfer; liability ofRespondent. Until Respondent has fully complied with this

Trading Agreement and Order, Respondent 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. Respondent's obligations under this Trading Agreement and

Order shall not be affected by the passage oftitle to any property to any other person or

municipality.

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 natural resource

damages, and to impose penalties for past, present, or future violations of law. If at any time

the Commissioner detenuines that the actions taken by Respondent 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 Respondent to undertake further

investigation or further action to prevent or abate violations or pollution.

24. Respondent's obligations under law. Nothing in this Trading Agreement and Order shall

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

25. No assurance by Commissioner. No provision ofthis 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 Respondent pursuant to this Trading Agreement and

Order will result in compliance or prevent or abate pollution.

26. Access to premises. Any representative ofthe 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.
Algonquin Power Windsor Locks, LLC 9 Trading Agreement and Order 8299

27. No effect on rights of 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.

28. No Creation of Property Rights. This Consent Order does not create any property rights with

respect to these DERCs or Allowances.

29. Notice to Commissioner of changes. Within 15 days ofthe date Respondent 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 that any relevant

infonnation was omitted, Respondent shall submit the correct or omitted information to the

Commissioner.

30. Notification of noncompliance. In the event that Respondent becomes aware that it did not or

may not comply, or did not or may not comply on time, with any requirement ofthis Trading

Agreement and Order or of any document required hereunder, Respondent 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,ifl1l1avoidable, is minimized to

the greatest extent possible. Within five (5) days ofthe initial notice, Respondent 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 written approval ofthe

Commissioner, dates by which compliance will be achieved, and Respondent shall comply

with any dates which may be approved in writing by the Commissioner. Notification by

Respondent 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.

31. 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 writing by the Commissioner, be directed to:

Supervisor

Administrative Enforcement Group

Engineering and Enforcement Division

Bureau of Air Management

Department of Environmental Protection

79 Elm Street, 5th Floor

Hartford, Comlecticut 06106

(860) 424-3702
Algonquin Power Windsor Locks, LLC 10 Trading Agreement and Order 8299

Respondent consents to the issuance ofthis 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 Respondent to the terms and conditions ofthe Trading Agreement and Order.

\, . l 0'""""""

Signature:__-flpl;<~~!kV,-_.::- _

Type Name: ~.IL<a...mu.,e"'s"----Ac.....,....JIJ(W-ub..... i J.t""e'-- _

Type Title:_~P'-l"'a"-n"'-"t-'.!M"'a2Jn"'alllg,se'-'r~ _

Date: -'-A"'p'-"r'-"i'-"1'--"1~3'__l,'_____"2<_'O'_"'1<_'O'___ _

Issued as a final consent order ofthe Commissioner ofthe Department of Environmental Protection.

G 0 e, Director

Engmeering & Enforcement Division

Bureau ofAir Management

CITY OF WINDSOR LOCKS LAND RECORDS

MAILED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

Certified Document

04- .20 - .:J...or 0

Date