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STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

State of Connecticut

and

Sikorsky Aircraft

Corporation ,

)

)

)

)

Trading Agreement

and Order No. 8120 A

WHEREAS, the Commissioner of Environmental Protection ("Commissioner") and the Sikorsky

Aircraft Corporation ("Sikorsk-y") agree that it is in the public interest that they work cooperatively

to improve the air quality within the State of Connecticut and that the use of discrete emission

reduction credit ("DERen) 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 of Sikorsky, the Commissioner finds the following:

2. Sikorsky is a corporation which owns and operates a facility involved in aircraft

manufacturing at 6900 Main Street in Strarford, Connecticut ("faciliry").

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1. This Trading Agreement and Order supercedes Trailing Agreement and Order 8120

issued on AprilS, 2002.

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3. At the faciliry, Sikorsky operates fuel-burning equipment that consists of five (5)

dual-fuel fired steam boilers (''boilers 1,2,3,4, and 5'') capable of burning natural

gas or No.6 fuel oil, which are subject to Section 22a-174-22 ofthe Regulations of

Cormecticut State Agencies ("Regulations") pertaining to the control of NOx

emISSions.

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

testing perfonned on October 3 through 10, 2000 resulted in NOx emission rates as

follows:

Table 1

Sikorsky - ·Ox Emission Rates, FLERs and Allowable Limits (lbsIMMBtu)

U1'<U Fuel But St:lck Test FLER AJlowable D:lfe of D2!e oCNext

Reg. or Input Rate Limit Last St.ack Test

Permit No. (MMB,u) (tO/OO) Ra!e Stack Test

Boiler No. I No.6 oil 48.0

I

0.30 0.39 0.25

I

10110/00 10110/05

R178-0019 Natural Gas 50.4 0.18 N/A 0.20 10/10/00 10/1 0/05

(PriDted OD Rec)'cled Paper)

79 Elm Street • Hanford. CT 06106·5127

tinp .lId 'p.SI.1 C. 'I. liS

.... 11 Equ.ol OpportlJ.lli:y Err.plo.vtr ORIGINAL
Sikorskv A.ircraft Corooration -

? Trad·n. I Agre-ment , - .And 0 rd N er o. 8PO A - Table 1

Sikorsky - NOx Emission Rates, FLERs and Allowable Limits (lbsIMMBtu)

Boiler No.2 NO.6 oil 48.0 0.30 0.34 0.25 I10110/00 I 10/10/05

RI78-00t8 Natural Gas 50.4 0.20 N/A 0.20 tOllOIOO 10/10/05

Boiler No.3 No.6 oil 48.0 0.30 0.35 0.25 10/10/00 10110105

Ri78-0017 Natural Gas 50.4 0.16 N/A 0.20 10/10/00 10/10/05

Boiler No.4 No.6 oil 48.0 0.31 0.33 0.25 t011 0/00 10/10/05

R178·00t6 Natural Gas 50.4 0.19 N/A 0.20 lOll 0/00 10ltOl05

Boiler No. 5 No.6 oil 49.5 0.34 0.35 0.25 10110/00 10110/05

Pi78-D039 Natural Gas ..... 52.5 0.12 N/A 0.20 10/10/00 10110/05

5. When burning No.6 fuel oil in boilers 1, 2, 3, 4 and 5, Sikorsky exceeds the NOx

allowable emission rate limit specified in Section 22a-174-22(e) of the Regulations.

6. Pursuant to Section 22a-174-22(j) of the Regulations Sikorsky proposes to comply

with Section 22a-174-22(e) ofthe Regulations, when burning No.6 fuel oil in boilers

1,2,3,4 and 5, through the use of approved DERCs until April 30, 2007 at the

facility in accordance with this Trading Agreement and Order.

7. Sikorsky proposes to use a full load emission rate ("FLER") identified in Table 1 for

the purposes of calculating DERCs required.

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f.J 8. The Commissioner, in accordance with the provisions of Trading Agreement and

Order No. 8120, pursuant to Section 22a-174-22 of the Regulations, approved the

NOx DERCs referenced in Table 2 below of this Trading Agreement and Order, or

they were purchased by Sikorsky. DERC creation serial numbers assigned by the

Department to these previously approved DERCs are identified in Table 2 ofthis

Trading Agreement and Order. DERCs are subject to the vintage restrictions ofthis

Trading Agreement and Order. Dates after which the unused DERCs will no longer

be eligible for use as a result ofthe vintage restricti0t:s are provided in Table 2 of this

Trading Agreement and Order in the expiration date column.

Table 1

SIl<ORSKY

Previously ADDroved DERCs

y", Ozone Season NOx DERC serial Ozone Non-ozone season NOx DERC serial Non-ozone Expiralion

of numbers Season numbers season Dale

Gen. DERCs DERes

Pre-I 999 SIN nol assiv:ned 2 SIN nOI assilr;ned '4 I213 IIQA

2000 I 12131105

2001 SIN nOI assi2Tted ,. I SIN no! assi£Tted 4. 12131106

2002 I 12131107

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A. The Commissioner, in accordance with the provisions ofthis Trading Agreement and Order,

pursuant to Section 22a-174-22(j) ofthe Regulations, hereby allows Sikorsky to comply with

Section 22a-174-22 ofthe Regulations at the facility through use of emissions DERC

trading.

ORIGINAL
Sikorskv Aircraft Corporation 3 Trading Agreement And Order No. 8120 A

B. With the agreement of Sikorsky, the Commissioner, acting under Sections 22a~6, 22a-174,

22a-174, 22a-176, and 22a-177 ofthe Connecticut General Statues, hereby orders Sikorsky

follows: .

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

comply with Section 22a-174-22 of the Regulations through emission reduction

trading until Sikorsky achieves permanent compliance with the emission standards in

Section 22a-174-?-2 (ej ofthe Regulation or by April 30, 2007, whichever is earlier

as follows: '"

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

and Order;

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

applicable NOx emission limits as allowed under this Trading Agreement and

Order; and

c. Sikorsky shall comply during the operation of the boilers with the full load

emissions rate (FLERs) shown in Table 1 above oftrus Trading Agreement and

Order.

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.:::.., .. 2. DERC Use. Until April 30, 2007, before the first day of each month Sikorsky shall

have in its possession sufficient approved DERCs for such month based on the

following calculation:

a. Before the first day of each month, Sikorsky shall estimate DERCs required for

such calendar month boilers when burning No.6 fuel oil and using the FLER from

Table 1 as follows:.

Estimated DERCs (tons) use {(Estimated fuel use in MMBtu) x ((FLER) - (0.95

x NOx allowable emission limit))}.;.2000 lbs/ton.

Where:

• Allowable limit = allowable limit rate in lbsl1v1MBtu shown in Table

1 ofthis Trading Agreement and Order.

• FLER = full load emission rate in IbsfMMBtu as shown in Table 1 of

this Trading Agreement and Order.

• Discount (0.95) = 5% design margin applied to the allowable limit

rate.

• Fuel heating value = 150,000 BTU per gallon

ORIGINAL
Sikorsky Aircraft Cornoration 4 Tradine. Agreement And Order No. 8120 A

b. 0 later than the twentieth day of each month, calculate actual DERCs used in the

preceding calendar month for boiler 1,2,3,4 and 5 when burning No.6 fuel oil

using the FLER from Table I above and as follows:

Actual DERCs (tons) used {(Actual fuel use in MMBtu) x «HER) - (0.95 x

NOx allowable limit)))~2000 Ibs/ton.

3. Sikorsky shall make and keep records of: daily fuel use and fuel type; excess NOx

emissions; the number ofDERCs in its possession, created, purchased and used (by

serial number if assigo,ed) each month in accordance with the appropriate emission

rates and limits in this Trading Agreement and Order; the number ofDERCs used

during the ozone season and non-ozone season (the remainder ofthe year) as well as

documentation attesting to the fact that approved DERCs used during the ozone

season were generated during the ozone season. Generator certification ofttis fact

shall be sufficient. Sikorsky shall maintain and submit such records to the

Commissioner in accordance with Section 22a-174-22 of the Regulations.

5. Annual Emission Statement. No later than March I, of every year after issuance ofthis

Trading Agreement and Order, Sikorsky 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 ofthis Trading Agreement and

Order until all such DERCs have been used. Sikorsky shall also include NOx emissions from

each boiler using or generating DERCs, and the amoUDt of all DERCs used including serial

number (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 Sikorsky

choose to discontinue the generation ofDERCs, Sikorsky will notify the Commissioner

upon discontinuance.

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4. Record Keeping. Sikorsky 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. Sikorsky 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 of

the Regulations.

6. Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, Sikors!,y may use

NOx allowances, through April 30, 2007, pursuant to Section 22a o I74-22G) ofthe

Regulations to achieve all or a portion ofthe reductions required by Section 22a-174-22 of

the Regulations. Any allowance used for compliance with Section 22a-174-22(e) ofthe

Regulations shall be subject to all restrictions and/or requirements applicable to DERCs

contained in this Trading Agreement and Order;

a. In order for Sikorsky to use NOx allowances, Sikorsky shall create a general

account in EPA's NOx Allowance Tracking System ("NATS''); and

b. Each allowance used for comoliance with Section 22a-174-22 ofthe

Regulations shall be equivalent to one discrete emission reduction credit.

Allowances shall be considered used for compliance with Section 22a-174-22

ORIGINAL
Sikorsky Aircraft Corporation 5 Tradin2 Agreement And Order No. 8110 A

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

account in the NAIS to the CT Stale NOx Retirement Account (Account ID

CTOOOOO00300 in the NATS).

7. DERC Doubling. At a minimum, DERCs required shall be adjusted upwards by 100% if

DERCs are not in Sikorsky's possession prior to the first day of each month of use and

staning on October I, 2003, prior to each non-Olone season. However, based on the gravity

of noncompliance, the Commissioner may require additional upward adjustment.

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

Regulations, DERCsiallowances shall only remain valid for five (5) calendar years from the

year ofthe generationlallocation ofsuch DERCsiallowances. DERCsiallowances older than

five (5) calendar years from their creation/allocation are not valid for use for compliance

with Section 22a-174-22 ofthe Regulations. Notwithstanding the above, DERCsiallowances

generated/allocated prior to calendar year 2000 are valid for use for compliance with Section

22a-174-22 ofthe Regulations up to and inclnding De<:ember 3J, 2004.

9. FLER Exceedance. Noncompliance with an established FLER shall subje<:t Sikorsky to

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

plus a 100% premium. The oue up in tons ofDERCs shall be equal to the FLER

exceedance in IbslM:N!Btu, 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 emission test

tlu"ough 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 proceeding or take any other action to require

additional upward adjusonent, based on the gravity of any alleged noncompliance or

violation oflaw.

10. FLER Modification. FLERs set forth in Table 2 ofthis Trading Agreement and Order may

be modified 'only after the consent ofthe Commissioner by wrinen modification oftrus

Trading Agreement and Order.

II. Emissions Testing. Pursuant to Section 22a-174-22(k) ofthe Regulations, Sikorsky shall

conduct NOx emission tests of boilers 1,2,3,4 and 5 at least once every five years

commencing from the dates of the applicable year 2000 emissions tests for boilers 1,2,3,4

and 5.

12. Prol1Taro Review. After April 30, 2007 for the boilers, Sikorsky shall comply with the

requirements ofSection 22a-174-22 of the Regulations. However, after full program review

ofthis and other Trading Agreements and Orders and if detennined to be appropriate, the

Commissioner may grant wrinen extension ofthis Trading Agreement and Order. After full

program review, and if the Commissioner deems it appropriate, the Commissioner may

allow the survival and use ofthese DERCs, subject to the vintage restriction, beyond April

30,2007.

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13. Future Compliance Report. On or before September I, 2006, Sikorsky shall submit a report

indicating how the facility will comply with Section 22a-174-22 of the Regulations after

April 30, 2007.

ORIGINAL
Sikorsky Aircraft Corooration 6 Trading: AQTeernent And Order No. 8]20 A

14. Full compliance. Sikorsky 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. Sikorsky shall use best efforts to submit to the Commissioner all documents

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

Commissioner notifies Sikorsky that any docwnent or other action is deficient, and does not

approve it with conditions or modifications, it is deemed disapproved, and Sikorsky shall

correct the deficiencie~ 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 submined 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.

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16. Definiti'ons. 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-174-22 ofthe Regulations; "Commissioner" means the Commissioner or a

representative ofthe Commissioner; "Ozone season" means the period from May 1 through

September 30 in any given calendar year. 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.

17. 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 limit~d 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

submined or performed by a date which falls on a Saturday, Sunday or a Connecticut or

federal holiday shall be submined or performed by the next day which is not a Saturday,

Sunday or Connecticut or federal holiday.

18. Certification of documents. .t\ny 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 Sikorsky or, if Sikorsky is not an individual, by Sikorsky's chief executive

officer or a duly authorized representative ofsuch officer, as those terms are defined in

Section 22a-430·3(b)(2) ofthe Regulations of Connecticut State Agencies, and by the

individual(s) responsible for actually preparing such document, and Sikorsky or Sikorsk-y's

chief executive officer and each such individual shall cenify in writing as follows:

"I have personally examined and am familiar with the information submitted in this

ORIGINAL
Sikorsky Aircraft Corporation 7 Trading Agreement And Order No, 8120 A

document and all anaclunents thereto, and I certify, based on reasonable

investigation, including my inquiry of those individuals responsible for obtaining the

infonnation, 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 infonnation is punishable as a criminal offense under Section 53a-157b of

the Connecticut General Statutes and any other applicable law."

19. Noncompliance. lbis Trading Agreement and Order is a final order afme 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

Sikorsky to an injunction and penalties.

20. False statements. Any false statement in any infonnation submitted pursuant to Lllls Trading

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

Connecticut General Statutes and any other applicable law.

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Notice of transfer; liabilirv of Sikorsky. Until Sikorsky has fully complied with this Trading

Agreement and Order, Sikorsky shall notify the Commissioner in writing no later than 15

days after transfening 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. Sikorsky'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.

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 determines that the actions taken by Sikorsky 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 Sikorsky to undertake further

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

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

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

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 taken by Sikorsky pursuant to this Trading Agreement and

Order will result in compliance or prevent or abate pollution.

Access to premises. Any representative of the Department of Environmental Protection may

enter the without prior notice for the purposes ofmonitoring and enforcing the actions

required or allowed by this Trading Agreement and Order.

ORIGINAL
SikorskY Aircraft Corporation 8 Tradim~ A!ZTeement And Order No. 8120 A

26. No effect on ril2:hts 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.

27. No Creation of PropertY Rights. This Consent Order does not create any property rights with

respect to these DERCs.

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

a change in any information submined to the Commissioner under this Trading Agreement

and Order, or that anyfu'ch information was inaccurate or misleading or that any relevant

information was omined, Sikorsky shall submit the correct or omined information to the

Commissioner.

29. Notification of noncompliance. In the event that Sikorsky 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, Sikorsky 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, if unavoidable, is

minimized to the greatest extent possible. Within five (5) days ofme initial notice, Sikorsky

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 Sikorsky shall comply with

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

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.

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30. 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:

Mr. Roland L. Severance Jr., P.E.

Emissions and Credit Trading Section

Compliance and Field Operations Division

5th Floor

Bureau of Air Management

Department of Environmental Protection

79 Elm Street

Hartford, Connecticut 06106

ORIGINAL
Sikorsky Aircraft Corporation 9 Trading Agreement And Order No. 8120 A

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Sikorsky consents to the issuance ofthis Trading Agreement and Order without further notice. The

undersigned ceI1ifies that he/she is fully authorized to enter into this Trading Agreement and Order

and to legally bind Sikorsky to the terms and conditions ofthe Trading Agreement and Order.

Sikorsky p,ir..craft Corporation

Type Name: "William D. Lut

Type Title: Director; Environment. Health and Safety

Date: d'3 Itt /a.!3

7 J

Issued as a Pnal ;onsent order ofthe Commissioner ofthe Depamnen:(ofEn.¥fr

on ~~ ~1 ,2003. / /.

,I { t" t;./ " [/-

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------Arthur J R~~ue, Jr

COmmiSSiOn\)

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TOWN OF STRATFORD

MAILED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

CeI1ified Document

G:\.TIV.DING-RI..S\.TIV.DINGORDERs\sikOtSky\8120Sil"Ord(02-13.o3).doc:

ORIGINAL