Exhibil3 

## STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of ) ) The State ofConnecticut and ) ) Middletown Power LLC ) Consent Order No. 8227

A. With the agreement of Middletown Power LLC ("Respondent"), the Commissioner of Environmental Protection ("Commissioner") finds the



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1, Respondent is an exempt wholesale electric generating company with its principal place of business in Sewickley, Pennsylvania. On December 15, 1999 Respondent purchased from The Connecticut Light and Power Company andnow owns one fossil fuel-fired electric generating station, Middletown Station, at 1866 River Road in Middletown, Connecticut ("facility")

. 2. At the facility, NRG Middletown Operations Inc'. operates an auxiliary boiler,**Co~~ecticut** Permit Number 104-0002, a 160 million British thermal units perhour ("MMBtu/hr") auxiliary steamboiler ("auxiliary boiler')'. The auxiliary boiler operates on residual fuel oil. An emission test measures nitrogen oxide ("NOx")emissions from the auxiliary boiler.

3. On and afterMay 31, 1995, the Regulations of Connecticut StateAgencies ("Regulations") require that the auxiliary boiler emit NOx at a rate no greater than 0.25 pounds per millionBritish thermal units ("lbs/MMBtu") of heat input when operating on residual fuel oil.

4. On October 10, 1995 the Commissioner issued Trading**Agreem~nt** and Order #8106 to The Connecticut Light and Power Company, whichpreviously owned the facility, to offset the excess NOx emissions from the auxiliary boileruntil May 31, 1996.

Initials: 1 (Printed on Recycled Paper) 79 Elm Street • Hartford, CT 06106

-.5127 btlp:/Idep.Slate.ct.us ArtEqual OpportulIiry Employu Date:Middletown Power LLC Consent OrderNo.8227

5. OnJune 14, 1996, The Connecticut Light and Power Companyperformeda NOx emissions stack test on the auxiliary boilerandbasedupon Department of Environmental Protection ("Department") approved stack test data, the NOx emission rate for the auxiliary boilerwas 0.25 Ibs/MMBtu of heat input when operating
on residual fuel oil.

6. On June 12, 2001, Respondent performed a NOx stack test andbasedupon Department approved stack test data, the NOx emission rate for the auxiliary boilerwas 0.399 Ibs/MMBtu of heatinput when operating on residual fuel oil. Respondent notified the Department of the stack test results and requested a trading orderon or about July 17, 2001.
7. By virtue of the above, Respondent violated Section 22a-174-22(e) of the Regulations.
8. The Department ofEnvironmental Protection issued notice ofviolation #14726 dated July 20, 2001 to Respondent alleging the violation described in paragraphs A.6 andA.7"of this Consent Order.

9. Respondent proposes to use approved discrete emission reduction credits ("DERCs") to offset excess NOx emissions from the auxiliary boiler, until Respondent complies with the emission limitation in Section 22a174-22{e) of the Regulations.

10. Pursuant to Section 22a-174-22(j) of the Regulations, Respondent intends to acquire approved DERCs until May 1, 2003 at the facility. Approved DERCs are defined for purposes of this Consent Order as those forwhich the Commissionerhas providedwritten authorization for
use in compliance with Section 22a-174-22 ofthe Regulations. Respondent will 

### acquire approvedDERCs monthlyon an as-needed basis, as determinedby actual NOx emissions in the event that the 24-hour average of actual NOx emissions exceeds**th~** NOx emission limitations of Section 22a-174-22(e) of the Regulations.

Initials: 2Middletown Power LLC Consent OrderNo.8227

11. 

### By agreeing to issuance of this Consent Order, Respondent makes no admission offact or law with respect to matters addressedherein other than the facts asserted in paragraphs A.l., A.2. andA.6. of this Consent Order.

B. The Commissioner, in accordance with the provisions ofthis Consent.order, pursuant to Section 22a-l74-22(d) (3) ofthe Regulations, hereby allows Respondent to comply with Section 22a174-22(d) (1) of the Regulations through use ofDERC trading.
C. With the agreement**o~** Respondent, the Commissioner, acting under Sections 22a-6, 22a-171, 22a-174, 22a-176, 22a-177 and 22a-178 of the Connecticut General Statutes, orders Respondent as follows:
1. On orbefore thirty (30) days after issuance ofthis Consent Order, Respondent shall permanently retire 48 tons of approved NOx DERCs (15 tons ofozone seasonNOx DERCS and 33 tons ofnon-ozone seasonNOx DERCs) to offset excess NOx emissions from the auxiliary boiler from the period of December 16, 1999 through November 3D, 2001.
2. DERC Use. Approved DERCs shall be acquired for compliance with the emission standards in Section 22a-174-22 of the Regulations for the period beginning December 1, 2001, and continuing until Respondent achieves permanent compliance for the auxiliary boilerwith the emission standards in Section 22a-174-22(e} ofthe Regulations or until May 1, 2003, whichever occurs first. Respondent shall acquire approvedDERCs, and document and record the amounts ofNOx emissions and DERCs usedby serial number (if assigned) by the auxiliary boilereachday, and shall maintain and provide such records in accordance wich the following and Section 22a-174-4 ofthe Regulations, until May 1, 2003:

a. Before the first day ofeachmonth, beginning the first full month afterthe issuance of this Consent Order, Respondent shall calculate projected worst case DERCs required for .that calendar month as follows:

DERCS (tons)estimated

## ={[Full Load Emission Rate ("FLER") in lbs/MMBtu

- ((0.95) x (the limit in Section 22a-174-22(e) ofche Regulations orproportioned

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emission rate calculatedpursuant to Section 22a174-22(f) (2) (A) of the Regulations in lbs/MMBtu) I)
x (estimated fuel use inMMBtu)} + 2000 pounds.
b. Respondent shall acquire sufficient approved DERCs
no later,than the first day ofeachmonth to assure compliance with the emission standards in Section 22a-174-22 ofthe Regulations for, at a minimum, that calendarmonth. Excess DERCs fromprevious months canbe applied to subsequent months. At a minimum, DERCs required shall be adjusted upwards by 100% ifDERCs are not in Respondent's possession prior to the first day ofeachmonth.

c. No later than the twentieth day ofeachmonth, beginning the first full month after the issuance of this Consent Order Respondent shall calculate DERCs used inthe preceding calendarmonth, as follows:

DERCs (tons) actual = {[(?LER in lbs/MMBtu)

- ((0.95) x (limit in Section 22a-174-22(e) of the Regulations orproportioned emission rate calculated pursuant to Section 22a-174- 22(f) (2) (A) .of the Regulations in lbs/MMBtu» J
x (actual fuel use in MMBtu)} + 2000 pounds.
d. Respondent shall maintain documentation to attest to the fact that DERCs used during the ozone season were generatedduring the ozone season. Generator certificationof this fact shall be sufficient.

e. After full programreview, and ifthe Commissioner deems it appropriate, the Commissionermay allow the survival anduse of approvedDERCs beyondApril 30, 2003.
f. On orbefore the twentieth day of the month following the first full month after the issuance of this Consent Order, Respondent shall permanently retire approved NOx DERCs, calculated in accordance with the formula inparagraph C.2.c. of this Consent Order, to offset the excess NOx emissions from the auxiliary boiler from the period beginning

Initials: 4 Date:Middletown Power LLC Consent Order No. 8227

December 1, 2001 through the first full month after issuance of this Consent Order.

g. Respondent shall comply during the operation of the auxiliary boiler with a FLER of .44 lbs/MMBtu heat input·, averaged on a 24-h6ur basis, until Respondent achieves permanent compliance for the auxiliary boiler with the emission standards in Section 22a-174-22(e) of the Regulations or until May 1, 2003, whichever occurs first.

3. In accordance with the provisions of Section 22a-174-22(k) of the Regulations, Respondent shall conduct a NOx emission test of the auxiliary boiler no later than June 30th of each calendar year, following the issuance of this Consent Order, and continuing until the Commissioner's administrative enforcement representative approves results of three'consecutive annual NOx emission tests for the auxiliary boiler, each of which demonstrate compliance with the allowable emission rate in Section 22a-174-22(e) of the Regulations.

4. Subsequent to Department approval of three consecutive annual NOx emission tests for the auxiliary boiler demonstrating compliance with the allowable emission rate in Section 22a-174- 22(e) of the Regulations, the Respondent shall conduct, in accordance with the provisions of Section 22a-174-22(k) of the Regulations, NOx emission tests of.the auxiliary boiler at least
once every five years commencing from the date of the last NOx emission test of the three consecutive annual NOx emission tests that demonstrated compliance with the allowable emission rate in Section 22a-174-22(e) of the Regulations.

5. The FLER as set forth in paragraph C.2.g.of this Consent Order may be modified only after the consent of the Commissioner by written modification of 

### this Consent Order.

6. Noncompliance with an established FLER shall subject Respondent to make restitution 

### by matching the quantity of emissions**(~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**Lbs/MMB~u,** multiplied by the total heat input during the 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 Department witnessed stack test through the date the FLER compliance is achieved as approved by the

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# In<:.Middletown PowerLLC Consent Order No_ 8227
Commissioner shall be used. However, nothing in this Consent Order shall affect the Commissioner's authority to institute any proceeding or take any other action to require additional upward adjustment, basedon the gravity of any alleged noncompliance or violation of law.

7. Upon issuance ofthis Consent OrderRespondent shall 

### maintain records for the auxiliaryboiler showing daily NOx mass emissions,' and actual NOxemissionrates (24-hour average).
8. No later thanMarch 1 of every year after issuance ofthis Consent Order, Respondent shall include with the Annual Emission Statement provided to the Commissioner, actual NOx emissions from the auxiliary boiler, and the amount of all DERCs used (including serial numbers (if assigned) and approvedDERCs purchased fromother facilities) for the previous calendaryear.

These reports shall be ona formprescribed by the Commissioner. This reporting shall be consistent with the records produced in accordance withparagraphC.2. of this Consent Order. This reporting may cease ifa central registry is approvedby the Commissioner.
9. Respondent shall retainrecords and supporting documentation
as described in this Consent Order for a minimumof five 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.
10. Full compliance. Respondent shall not be considered in full compliance with this consent orderuntil all actions required by this consent orderhave been completed as approved and to the Commissioner's satisfaction.
11. Civil penalty. On or before fourteen (14) days after issuance of this Consent Order, Respondent shall pay a penalty of $12,480 as the total civil penalty to be sought by the Commissioner for those, and only those, violation(s) described in paragraphs A.6 andA.7. of this Consent Order.
12. Payment ofpenalties. Payment ofpenalties under this Consent Order shall be mailed orpersonally delivered to Dennise Goulbourne, BureauofAirManagement, Department of Environmental Protection, 79 ElmStreet, Hartford, CT 06106- 5127, and shall be by certified orbank checkpayable to the
Initials:" 6 Date:Middletown PowerLLC Consent Order No. 8227
Connecticut Department ofEnvironmental Protection. The check shall state on its face, aBureau ofAirManagement, civil penalty, Consent Order #8227."

. 13. Approvals. Respondent shall use best efforts to submit to the Commissioner all documents requiredby this Consent Order in
a complete and approvable form. Ifthe Commissionernotifies Respondent that any document or other action is deficient, and does not approve it with conditions ormodifications, it is deemeddisapproved, andRespondent shall correct the deficiencies and resubmit it within the time specified by the Commissioneror, ifno time is specifiedby the Commissioner, within 30 days of the Commissioner's notice ofdeficiencies. In approving any document orother action under this Consent Order, the Commissionermay approve the document or other action as submittedorperformed orwith such conditions ormodifications
as the Commissionerdeems necessary to carry out the purposes of this Consent Order. Nothing in this paragraph shall excuse noncompliance or delay.
14. Definitions. As used inthis Consent Order,"Approved DERCs"
are those for which the Commissionerhas providedwritten authorization for use in compliance with Section 22a-174-22 of the Regulations;"Comrhissioner" means the Commissionerora representative of the Commissioner; "Ozone seasonII means the period fromMay 1 through September 30 in any given calendar year. The date of "issuance" ofthis Consent Order is the date the Consent Order is deposited in the U.S. mail or personally delivered, whichever is earlier.
15. Dates. The date of submission to the Commissioner of any document requiredby this Consent Order shall be the date such document is received by the Commissioner. The date of any noticeby the Commissionerunder this Consent Order, including but not limited to notice of approval or disapproval of any document orother 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 Consent Order, the word "day" as used in this Consent Ordermeans calendarday. Any documentor action which is required by this Consent Order to be submittedorperformed by a date which falls
on a Saturday, Sunday or a Connecticut or federal holiday shall be submitted orperformed by the next day which is not a Saturday, Sunday or Connecticut or federal 

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# 2.)20[0<Middletown Power LLC Consent OrderNo. 8227
16. Certificationofdocuments. Any document, including but not limited to any notice, which is required to be submitted to the Commissionerunderthis Consent Order shall be signedby Respondent or, if Respondent is not an individual, by Respondent's chiefexecutive officer or a duly authorized representative of suchofficer, as those terms are defined in §22a-430-3(b)(2) ofthe Regulations ofConnecticut State Agencies, andby the indiyidual(s) responsible for actually preparing such document, and Respondent or Respondent's chief executive officer and each such individual shall certify in writing as follows: III have personally examined and am familiar with the information submitted in this document and all attachments thereto, and I certify, based onreasonable investigation, inclUding my inquiryof those**~ndividuals** 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 §53a-157bofthe Connecticut General Statutes and any other applicable law. II
17. Noncompliance. This Consent Order is a final orderofthe Commissionerwith respect to the matters addressedherein, and is nonappealable and immediately enforceabie. Failure to comply with this Consent Order may subject Respondent to an injunction andpenalties.
18. False statements: Any false statement in any information submitted pursuant to this Consent Order is punishable as a criminal offense under §53a-157b ofthe Connecticut General Statutes and any other applicable law.
19. Notice of transfer; liabilityofRespondent. Until Respondent has fully compliedwith this Consent 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 of this Consent Order or after obtaining a new mailing or location**add~ess.** Respondent's obligations under this Consent Order shall not be affected by the passage of title to any property to any otherperson ormunicipality.
20. Commissioner's powers. Nothing in this Consent Order shall affect the Commissioner'S authority to institute any proceeding or take any other action to prevent or abate
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### I<>"/.Middletown Power LLC Consent Order No. 8227
violations of law, prevent or abate pollution, recover costs and natural resource damages,**a~d** to impose penalties for past,**pres~nt,** or future violations of law. If at any time the Commissioner determines that the actions takenby Respondent pursuant to this Consent Order have not successfully corrected all violations, fully**characterize~** the extent ordegree ofanypollution, or successfully abated
orpreventedpollution, the Commissionermay institute any proceeding to require Respondent to undertake further investigationor further action to prevent or abate violations orpollution.
21. Respondent's obligations under law. Nothing in this Consent Order shall relieve Respondent ofother obligations under applicable federal, state and local law.
22. No assurance by Commissioner. No provision of this Consent Order and no action or inaction by the COmmissioner shall be construed to constitute an assurance by the Commissioner that the actions takenby Respondent pursuant to this Consent Orderwill result incompliance or prevent or abate pollution.
23. Access to facility. Anyrepresentative ofthe Department of Environmental Protectionmay enter the facility without prior notice for the purposes ofmonitoring and enforcing the actions required or allowedby this Consent Order.

24. No effect on rights of otherpersons. neither creates nor affects any rights municipalities that are not parties to This Consent Order ofpersons or this Consent Order.

25. No Creation of PropertyRights. create any propertyrights with This Consent Orderdoes respect to these DERCs. 

### not

26. Notice to Commissioner of changes. Within 15 days of the date Respondent becomes aware of a change in any information submitted to the Commissionerunder this Consent Order, or that any such informationwas inaccurate ormisleading or that any relevant informationwas omitted, Respondent shall submit the correct or omitted information to the Commissioner.
27. Notification ofnoncompliance. In the event that Respondent becomes aware that it did not ormay not comply, ordid not
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# €e. 9 Date:Middletown PowerLLC Consent Order No. 8227

ormay not comply on time, with any requirement of this Consent Orderorof anydocument requiredhereunder,**Responde~t** 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, ifunavoidable, is minimized to the greatest extent possible. Within five (5) days of the initial notice, Respondent shall submit in writing the date, time, and duration ofthe noncompliance and the reasons for the noncompliance ordelay andpropose, for the review and written approval of the Commissioner, dates by which compliance will be"achieved, and Respondent shall complywith any dates whicn may be approved in writing by the Commissioner. Notification by Respondent shall not eXCUSe noncompliance or delay, and the Commissionerrs approval of any**complianc~** dates proposed shall not excuse noncompliance
ordelayunless specifically so statedby the Commissioner in writing.
28. Submission of documents. Any document required to be submitted to the Commissioner under this Consent Order shall, unless otherwise specified in this Consent Order or in writing by the Commissioner, be directed to:
ElizabethMcAuliffe Department ofEnvironmental ?rotection Bureauo£AirManagement Compliance andFieldOperations Division 79 Elm Street Hartford, Connecticut 06106-5127

Initials: 10 Date:Middletown Power LLC Consent OrderNo. 8227 Respondent consents to the issuance of this Consent Orderwithout further notice. The undersigned certifies**~hat** he/she is fully authorized to enter into this Consent Order and to legallybind Respondent to the terms and conditions of the Consent Order.

Signature: Type Name: Type Title: Middletown Power LLC

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Date:
Issued as a final order of the
Environmental Protection on

Town ofMiddletown 

### LANDRECORDS MAILED CERTIFIED MAIL, RETURNRECEIPTREQUESTED Certified Document No.

11 e, Jr.

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