STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

Cynthia L. Karlic, Regional Environmental Manager

NRG Energy, Inc.

P.O.Box 1001

1866 River Road

Middletown, CT 06547

Re: Nitrogen Oxide ("NOx") Trading Agreements and Orders # 8300 and 8306

Dear Ms. Karlic:

Enclosed are copies of Trading Agreements and Orders (TA&Os) #8300 and 8306. The TA&Os

are now enforceable by the State of Connecticut.

Over the next few months the Department will be taking steps to revise the annual reporting

forms that you have become familiar with over the years to facilitate compliant submission ofthe

repOlis required under the TA&Os. When these forms are complete, electronic versions ofthe

forms and instruction will be provided for your use. Until then, NOx Trading Program

participants may generate their own forms for the reports required under the TA&Os.

The terms ofthe new TA&Os need to be incorporated into the Title V Operating Permits for

your facilities, if you have such. To do so, please kindly submit applications for minor permit

modifications to your existing Title V Permits in accordance with Section 22a-174-2a ofthe

Regulations of COlmecticut State Agencies.

If your facilities are likely to violate the TA&Os due to an inability to acquire DERCs or

Allowances, you should submit notice in accordance with the Notice ofNoncompliance

paragraph ofthis TA&Os. In such Notice, you should demonstrate that all reasonable efforts to

procure DERCs and/or Allowances were exhausted prior to submission ofthe Notice.

Should you have any questions regarding this letter or the TA&O, please contact me at (860)

424-3462.

Sincerely,

/lIW~r;~ Michael LaFleur

Air Pollution Control Engineer 3

(Printed on Recycled Paper)

79 Elm Street • Hartford, CT 06106·5127

www.cLgov/dep

An Equal Opportunity Employer
STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

State of Connecticut

and

NRG Energy, Inc.,

Middletown Power LLC,

NRG Middletown Operations Inc.,

Montville Power LLC,

NRG Montville Operations Inc.,

Norwalk Power LLC,

NRG Norwalk .Harbor Operations Inc.

)

)

)

)

)

)

)

)

Trading Agreement

and Order No. 8306

WHEREAS, the Commissioner of Environmental Protection ("Commissioner") and NRG Energy, Inc.,

et al. ("Respondents") agree that the Commissioner may issue a permit or order to allow emissions

trading in accordance with Section 22a-174-22G) ofthe Regulations of Connecticut State Agencies

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

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

1. This Trading Agreement and Order supersedes Trading Agreement and Orders 8213A,

8214A, 8215A, 8216A, 8217A, and 8218A and all subsequent modifications thereto.

2. Respondents own and operate electricity generation facilities in Connecticut ("facilities").

3. At the facilities, Respondents operate the emission units described in Table 1 below, which

are subject to Section 22a-174-22 ofthe Regulations of Connecticut 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

cOlTesponding to each emission unit described in Table 1 ofthis Trading

Agreement and Order

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

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

Regulations, located in the State of Connecticut or a NOx allowance

designated specifically for compliance during Ozone Season control periods

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

Connecticut after the date of issuance ofthis Trading Agreement and Order.

(Printed on Recycled Paper)

79 Elm Street • Hartford. CT 06106~5J27

www.ct.gov/dep

An Equal Opporrunity Employer
NRG Energy, Inc., et al. 2 Trading Agreement and Order No. 8306

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

the Regulations

d. CEMS: Continuous Emissions Monitoring System

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-174-22(j) ofthe Regulations, subject to the provisions of Part B of

this Trading Agreement and Order.

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

as nonattainment 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-attainment 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: "CAIR NOxOzone 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. Environmental Protection Agency, subsequent to

the issuance ofthis Trading Agreement and Order.

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

successive Ozone Seasons

j. ppmvd: parts per million, by volume, dry basis

Table 1

CAIR NOx Ozone Season UnitsAllowable Limits (IbslMMBtu, unless otherwise noted)

UNlT- Fuel Heat Allowable Emissiou Limit

reg. or permit no. Input (AEL)

(MMBtnl

Middletown Unit 2 No.6 1,295 0.25 I

R104-0098 No.2 0.20 I

NatOas 0.15 non-ozone season average, regardless offuels burned
NRG Energy, Inc" et al. 3 Trading Agreement and Order No. 8306

Table I

CAIR NOx Ozone Season Units- I

Allowable Limits (IbslMMBtu unless otherwise noted) I

Middletown Unit 3 No,6 2,370 0.43

R104-0100 No,2 0.43

Nat Gas 0,15 non-ozone season average, regardless offuels burned

Middletown Unit 4 No.6 4,684 0.25

P104-0003 No.2 0.15 non-ozone season average, regardless offuels burned

Montville Unit 5 No.6 995 0,25

RI07-0017 Nat Gas 0.20

0.15 non-ozone season average, regardless offuels burned I

Montville Unit 6 No,6 4,658 0.25

RI07-0020 No.2 0.15 non~ozone season average, regardless offuels burned

Norwalk Unit 1& 2 No,6 1,776 each 0,25

R137-0028 No,2 0,20

R137-0030 0.15 non-ozone season average, regardless offuels burned

5. The Respondents agree that the actual NOx emissions rate from the emission units

described in Table I, at times, exceed the corresponding AELs.

6. The Respondents and the Commissioner agree that the actual 24-hour, block average NOx

emission rate from the emissions units described in Table I, at times, may be less than the

corresponding AELs. At such times, the Respondents propose to generate DERCs.

7. Pursuant to Section 22a-174-22(j) ofthe Regulations, Respondents propose to comply

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

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

this Trading Agreement and Order.

8, The Respondents propose to use the actual 24-hour !\verage emissions rate measured by

CEMS for the purposes of calculating Actual DERCs generated andlor Actual

DERCslAllowances Required for the emissions units described in Table 1.

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

Respondents to comply with Section 22a-174-22 ofthe Regulations at the facilities through the

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

B. With the agreement ofRespondents, the Commissioner, acting under Sections 22a-6, 22a-174, 22a176, and 22a-l77 ofthe Connecticut General Statutes, hereby orders Respondents as follows:

1. The Respondents may use emissions trading, subject to the provisions ofthis Trading

Agreement and Order until the earlier of:

a. May 31, 2014;

b. The Commissioner issues written notice to the Respondents stating that the

Respondents are no longer allowed to use emissions trading due to the

Respondents' violation of any provision ofthis Trading Agreement and Order;
NRG Energy, Inc., et al.

or

4 Trading Agreement and Order No. 8306

c. The Commissioner issues written notice to the Respondents notifying the

Respondents 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. Control Technology Evaluation: Not more than 12 months from the date ofissuance ofthis

Trading Agreement and Order, the Respondents shall submit a control technology evaluation

to reduce emissions of NOx from the emissions units described in Table 1 to, at a bare

minimum, a rate or concentration that complies with the applicable limits of Section 22a-174-

22 ofthe Regulations as may be amended, without using, tendering, or otherwise acquiring

Allowances or DERCs. Such evaluation shall include but not be limited to the following:

a. A detailed description of all subject emissions units, currently installed

emissions controls equipment and methods, all currently installed emissions

monitoring systems;

b. A detailed description of any and all additional or alternative emissions

control equipment and methods or, combinations thereof, that are capable of

reducing NOx emissions from subject emissions units to, at a bare minimum,

a rate or concentration that complies with the applicable limits of Section 22a174-22 ofthe Regulations as may be amended, without using, tendering, or

otherwise acquiring Allowances or DERCs;

c. An evaluation of capital costs, annual operating costs, and total annualized

$/ton costs associated with the installation and operation of any and all

additional or alternative emissions control equipment and methods, or

combinations thereof, that are capable ofreducing NOx emission from the

subject units to, at a bare minimum, a rate or concentration that complies with

the applicable limits of Section 22a-174-22 ofthe Regulations as may be

amended, without using, tendering, or otherwise acquiring Allowances or

DERCs;

d. An estimated schedule for the design, procurement, installation and operation

of any additional or alternative emissions control equipment and methods, or

combinations thereof, that are capable ofreducing NOx emission from the

subject units to, at a bare minimum, a rate or concentration that complies with

the applicable limits of Section 22a-174-22 ofthe Regulations as may be

amended, without using, tendering, or otherwise acquiring Allowances or

DERCs;

e. A detailed description of any adjustments and/or modifications that must be

made to the emissions monitoring systems for the subject emission units in

order to demonstrate compliance with, at least, Section 22a-174-22 ofthe
NRG Energy, Inc., et al. 5 Trading Agreement and Order No. 8306

Regulations as may be amended, without using, tendering, or otherwise

acquiring Allowances or DERCs; and

f. A detailed description of any collateral environmental impacts that will result

as a direct consequence ofthe Respondents' use of additional/alternative

emissions control equipment and methods to reduce NOx emissions to, at a

bare minimum, a rate or concentration that complies with the applicable limits

of Section 22a-174-22 ofthe Regulations as may be amended, without using,

tendering, or otherwise acquiring Allowances or DERCs;

3. While using emissions trading in accordance with this Trading Agreement and Order, the

Respondents shall obtain and use sufficient DERCs and/or Allowances in such a manner as to

comply with Paragraphs B.8 and B.I 0 ofthis Trading Agreement and Order. All Allowances

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

emission unit seeking to use the Allowances for compliance with this Trading Agreement and

Order. 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. All DERCs used during the Ozone

Season for the emissions units described in Table 1, shall have been generated during an

Ozone Season.

4. Prior to using Allowances to comply with this Trading Agreement and Order the Respondents

shall obtain a General and/or Compliance Account in the CAIR NATS.

5. 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

6. Ozone Season Fuel Use Restriction: Notwithstanding the provisions of Paragraph B.3 ofthis

Trading Agreement and Order, when operating the emission units described in Table Iduring

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

lowest NOx emitting fuel type or combination offuel types that the units are physically able to

burn to achieve the units' rated electricity output, according to the Independent System

Operator- New England (ISO NE), and that the Respondents are authorized to burn in

accordance with Departmental permit, registration, or applicable regulation.

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

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

in higher emissions of NOx, if either:

a. the availability offuel oil that complies with Paragraph B.6 is inadequate to meet

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

inadequate supply constitutes an emergency; or
NRG Energy, Inc., et al. 6 Trading Agreement and Order No. 8306

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

Respondents and the gaseous fuel supplier, or

c. the unit is operating in order to conduct testing required by any governmental

agency or auditing/testing required to demonstrate the ability to satisfy

commitments made to ISO NE in the Forward Capacity and/or Locational Forward

Reserve Markets.

8. DERC/Allowance Use. On the first day of each calendar month, the Respondents shall possess

a quantity ofDERCs and/or Allowances that equals or exceeds the quantity ofActual DERCs

Required and/or Actual Allowances Required in that month. Compliance with Paragraph B.8

ofthis Trading Agreement and Order shall be determined as follows:

a. Before the first day of each month, Respondents shall estimate DERCs and/or

Allowances required for such calendar month for each emission unit identified in

Table 1 as follows:

Estimated DERCs/Allowances Required =

{(Estimated fuel use in MMBtu) x ((estimated 24-hr average NOx emission rate

lb/mmbtu) - (0.95 x AEL))} +2000 lbs/ton

b. No later than the twentieth day of each month, Respondents shall calculate actual

DERCs and/or Allowances used in the preceding calendar month for each emission

unit described in Table 1 as follows:

Actual DERCs/Allowances Required =

:E{(Daily fuel use MMBtu) x ((actual 24-hr average emission rate lb/mmbtu) - (0.95 x AEL))} + 2000

lbs/ton

For all days in the month where actual 24-hr average emissions rate> AEL

9. DERC Generation. No later than the twentieth day of each month, Respondents shall calculate

actual DERCs generated in the preceding calendar month for each emission unit described in

Table 1 as follows:

Actual DERCs Generated (during ozone season only)} =

:E{(Daily fuel use MMBtu) x ((AEL) - actual 24-hr average NOx emission rate lb/mmbtu))} + 2000 lbs/ton

For all days in the month where actual 24-hr average NOx emissions rate < AEL

For any day in the month where the actual 24-hr average NOx emissions rate is

attributed to burning solely No.2 fuel oil, AEL shall be 0.17 lb/mmbtu.

Where daily fuel use and actual 24-hr average emission rate determinations shall
NRG Energy, Inc., et al. 7 Trading Agreement and Order No. 8306

exclude data substituted in accordance with any missing data substitution procedures,

including those allowed under Section 22a-174-22c ofthe Regulations and 40 CFR

Part 75. Notwithstanding Paragraph B.5, all DERCs generated by Table I emission

units in accordance with this paragraph shall expire I calendar year after the date of

generation and may only be used by CAIR NOx Ozone Season units.

10. Non-Ozone Season DERCIAllowance Use. In addition to the requirements of Paragraph B.9

ofthis Trading Agreement and Order, on the first day of each Non-Ozone Season, the

Respondents shall possess a quantity of DERCs and/or Allowances that equals or exceeds the

quantity ofNon- Ozone Season Actual DERCslAllowances Required for that Non-Ozone

Season. Compliance with Paragraph B.IO ofthis Trading Agreement and Order shall be

determined as follows:

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

DERCs and/or Allowances required for that Non- Ozone Season for each emission

unit described in Table I based an emission limit of 0.15 lb/mmbtu as follows:

Estimated Non-Ozone Season DERCs/Allowances Required =

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

lb/mmbtu) - (0.95 x 0.15 lb/mmbtu))} + 2000 lbs/ton

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

Respondents 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 lb/mmbtu) - (0.95 x 0.15Ib/mmbtu))} +2000 lbs/ton -:E( DERCS and/or

Allowances Required for all months ofthe Non-Ozone Season calculated pursuant to Paragraph

B.8)

II. Non-Ozone Season DERC Generation. No later than thirty (30) days after the end ofthe NonOzone Season, Respondents shall calculate actual DERCs generated during the Non-Ozone

Season from each emission unit described in Table I as follows:

Actual Non Ozone Season DERCs Generated =

{Non-Ozone Season fuel use (MMBtu) x [(0.15Ib/mmbtu) - Non-Ozone Season average

emission rate (lb/mmbtu)]} + 2000 lbs/ton

Where:

Non-Ozone Season Average Emission Rate < 0.15 lb/mmbtu; and

Where Non-Ozone Season fuel use and Non-Ozone Season Average Emission rate

shall exclude missing data substituted in accordance with any missing data substitution
NRG Energy, Inc., et al. 8 Trading Agreement and Order No. 8306

procedures, including those allowed under Section 22a-174-22c ofthe Regulations and

40 CFR Part 75.

12. The Respondents shall retire ten (10) percent of all DERCs (tons) generated by the emission

units identified in Table 1, prior to use, and shall deduct them from any calculations of

DERCs available and possessed by the Respondents to assure a benefit to the environment.

13. On or before January 31 of each calendar year, the Respondents shall deduct a quantity of

DERCs from the current balance of DERCs possessed by the Respondents and/or transfer a

quantity ofAllowances from the Respondents' NOx General and/or Compliance Account to

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

that the total is equal to the sum of(Actual DERCs/Allowances Required determined pursuant

to Paragraph B. 8 for the preceding calendar year) - 0.9*(Actual DERCs Generated

detennined pursuant to Paragraph B.9 in the preceding calendar year) for all emissions units.

14. Not more than ninety (90) days after the completion ofthe Non-Ozone Season, the

Respondents shall deduct a quantity ofDERCs from the current balance ofDERCs possessed

by the Respondents and/or transfer a quantity of Allowances from the Respondents' NOx

General and/or Compliance Account to the CT State NOx Retirement Account (Account ID

CT0000000300 in the CAIR NATS) such that the total is equal to 0 or the total of (Actual

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

Season) - 0.9*(Actual Non-Ozone Season DERCs Generated in the most recently completed

Non-Ozone Season) for all emissions units described in Table I, whichever is greater.

Notwithstanding the control period limitations of Paragraph B.3 ofthis Trading Agreement

and Order, Allowances used to comply with this Paragraph for a Non-Ozone Season must

have been originally allocated for the control periods that correspond to the same calendar

years within that Non-Ozone Season.

15. Doubling: Ifthe Actual DERCs/Allowances Required for any month, detennined in

accordance with Paragraph B.8, exceeds the quantity ofDERCs and/or Allowances in the

Respondents' possession on the first day ofthat month, then in addition to the deduction or

transfer specified in Paragraphs B.I3, the Respondents shall also deduct a quantity ofDERCs

from the current balance of DERCs possessed by the Respondents and/or transfer a quantity of

Allowances from the Respondents' NOx General and/or Compliance Account to the CT State

NOx Retirement Account (Account ID CT0000000300 in the CAIR NATS) such that the total

is equal to 0 or the total of(Actual DERCs/Allowances Required for that month) -

0.9*(Actual DERCs Generated in that month) for all emission units, whichever is greater.

Such additional DERC deduction or Allowance transfer shall be perfonned at the same time

as any DERC deduction or Allowance transfer specified in Paragraph B.l3 ofthis Trading

Agreement and Order.

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

detennined in accordance with Paragraph B. I0, exceeds the quantity of DERCs and/or

Allowances in the Respondents' possession on the first day ofthe Non-Ozone Season, then in

addition to the deduction or transfer specified in Paragraphs B.14, the Respondents shall also

deduct a quantity ofDERCs from the current balance ofDERCs possessed by the

Respondents and/or transfer a quantity ofAllowances from the Respondents' NOx General

and/or Compliance Account to the CT State NOx Retirement Account (Account ID
NRG Energy, Inc., et al. 9 Trading Agreement and Order No. 8306

CT0000000300 in the CAIR NATS) such that the total is equal to 0 or the total of(Actual

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

Season) - 0.9*(Actual Non- Ozone Season DERCs Generated in the most recently completed

Non-Ozone Season) for Table I emissions units, whichever is greater. Such additional DERC

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

or Allowance transfer specified in Paragraph RI4 ofthis Trading Agreement and Order.

Notwithstanding the provisions of Paragraph B.l5 ofthis Trading Agreement and Order, any

violation ofParagraphs 8.8 and RIO ofthis Trading Agreement and Order may be subject to

additional enforcement action as may be deemed appropriate by the Commissioner in

accordance with the Department's enforcement response policy.

16. At the end of each calendar year, the Respondent shall demonstrate that any Allowances used

for compliance with this Trading Agreement and Order during the year satisfy the

requirements of Paragraph B.3 and are surplus, quantifiable, enforceable and permanent. This

shall be determined for the emissions units in each Non-Attainment Area by demonstrating

that the actual, aggregate NOx emissions during the most recent control period, as reported to

the United States Environmental Protection Agency, from the emission unites) to which the

Allowances were originally allocated were equal to or less than the aggregate amount of

Allowances allocated to such unites) by the State ofConnecticut minus the aggregate amount

ofAllowances transferred or used for compliance with this and any other Trading Agreement

and Order.

The Respondents shall also demonstrate that any DERCs generated and/or used in accordance

with this Trading Agreement and Order are:

Real because they will result in a reduction ofilctual emissions released into the air, net of

any consequential increase in actual emissions resulting from shifting demand. The emission

reductions will be properly measured, recorded and reported.

Surplus because they are not required by any Connecticut statute or regulation mandated by a

current State Implementation Plan ("SIP"), and are not currently relied upon in any applicable

attainment plan, any reasonable further progress plan or milestone demonstration.

Permanent because NOx controls are in place and operating, and an appropriate tracking

system is in place to monitor all data required to verify and quantify the creation of DERCs.

Enforceable because the DERCs were generated in accordance with the provisions ofthis or

a prior Trading Agreement and Order issued by the Commissioner

17. Maintenance and Tune-up. Not more than 2 years from the date ofissuance ofthis Trading

Agreement and Order, the Respondents shall perform maintenance and inspection of each

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;
NRG Energy, Inc., et al. 10 Trading Agreement and Order No. 8306

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

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

during maintenance, tune-up, or inspection activity; and

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 units described in Table I in

accordance with Paragraph B. I 7 ofthis Trading Agreement and Order

has been performed in accordance with the manufacturer's

specifications or current good engineering practice,

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

inspection activity performed on the emission units described in Table

I in accordance with Paragraph B.I 7 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 units described in Table I in accordance with Paragraph B.17

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 performed in accordance with Paragraph B.I 7 ofthis Trading

Agreement and Order.

18. Record Keeping:

a. By the close of each calendar day, the Respondents shall record the actual

24-hour average NOx emission rate for any emission unit equipped with an

approved CEMS, the actual fuel type and the actual quantity of each type of

fuel in units of volume per day or MMbtu per day for each fuel used on the

preceding day in an emission unit described in this Trading Agreement and

Order,

b. On or before the first day of each calendar month, the Respondents shall

record the number of DERCs and corresponding serial numbers and

vintages for all DERCs in its possession on the first calendar day ofthat

calendar month,
NRG Energy, Inc., et al. II Trading Agreement and Order No. 8306

c. On or before the first day of each calendar month, the Respondents shall

record the number ofAllowances and corresponding identification numbers

and allocation control periods for all Allowances in its possession on the

first calendar day ofthat calendar month,

d. On or before the first day of each calendar month, the Respondents shall

record the number ofDERCs and corresponding serial numbers, vintages,

purchase/sales dates, and seller/buyer for all DERCs purchased or sold

during the preceding calendar month,

e. On or before the first day of each calendar month, the Respondents shall

record the number ofAllowances and corresponding identification

numbers, purchase/sales dates, allocation years, and seller/buyer for all

Allowances purchased or sold during the preceding calendar month

(Transaction reports generated from the CAlR NATs shall suffice for the

purposes ofthis subparagraph),

f. On or before the first day of each calendar month, the Respondents shall

record the Estimated DERCs/Allowances Required for that calendar month

determined in accordance with Paragraph B.8 ofthis Trading Agreement

and Order,

g. On or before the twentieth calendar day of each calendar month, the

Respondents shall record the Actual DERCs/Allowances Required for the

preceding calendar month determined in accordance with Paragraph B.8 of

this Trading Agreement and Order,

h. On or before the twentieth calendar day of each calendar month, the

Respondents shall record the Actual DERCs Generated for the preceding

calendar month determined in accordance with Paragraph B.9 ofthis

Trading Agreement and Order and DERCs retired for environmental benefit

in accordance with Paragraph B.12 ofthis Trading Agreement and Order,

i. On or before January 31 of each calendar year, the Respondents shall record

the quantity of DERCs deducted in accordance with Paragraphs B.13 and

B.IS ofthis Trading Agreement and Order for the preceding month. Such

records shall include the serial number and vintage of each DERC deducted

from the Respondents' current balance pursuant to Paragraphs B.13 and

B.IS ofthis Trading Agreement and Order,

j. On or before January 31 of each calendar year, the Respondents shall record

the quantity ofAllowances transferred in accordance with Paragraphs B.13

and B.IS ofthis Trading Agreement and Order. Such records shall include

the identification number and allocation control period of each Allowance

transferred pursuant to Paragraphs B.13 and B.IS ofthis Trading

Agreement and Order,

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

Season, the Respondents shall record the Non-Ozone Season Average NOx

emission rate for all emissions units described in Table I, the quantity of

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

Season, the quantity of DERCs deducted and/or Allowances transferred in
NRG Energy, Inc., et al. 12 Trading Agreement and Order No. 8306

accordance with Paragraph B.14 ofthis Trading Agreement and Order, the

quantity ofDERCs generated during the Non-Ozone Season in accordance

with Paragraph B.II ofthis Trading Agreement and Order, and the quantity

ofNon-Ozone Season DERCs generated during the Non-Ozone Season and

retired. for environmental benefit in accordance with Paragraph B.l2 ofthis

Trading Agreement and Order,

l. For each month ofthe Ozone season, the Respondents shall maintain

records attesting to the fact that any DERCs deducted from its balance in

accordance with Paragraphs B.13 and B.IS ofthis Trading Agreement and

Order satisfy the requirements of Paragraph B.3. Generator certification of

this fact shall be sufficient, and

m. On each day during the ozone season that the Respondents operate in

accordance with Paragraph R 7 ofthis Trading Agreement and Order, the

Respondents shall make and keep Records of all emission unit operation in

accordance with Paragraph B.7 ofthis Trading Agreement and Order,

including copies of any written correspondence from the Respondents' fuel

supplier detailing the duration and circumstances ofthe inadequate fuel oil

supply or interruption of gaseous fuel supply to the emission units.

19. Respondents.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. Respondents 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.

20. Reporting: No later than March 1 of every year after issuance ofthis Trading Agreement and

Order, the Respondents shall submit to the Commissioner a written report containing copies of

all ofthe records required pursuant to Paragraphs B.l8.a. - RI8.j, R18.! and B.l8.m ofthis

Trading Agreement and Order. Not later than July 30 of each calendar year, the Respondents

shall submit a written report containing copies of all records required pursuant to Paragraph

B.l8.k ofthis Trading Agreement and Order. The Commissioner may prescribe the forms to

be used for the submission ofthese reports. The Respondents shall submit these reports on

such forms, if prescribed by the Commissioner.

21. Full compliance. Respondents 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.

22. Approvals. Respondents shall use best efforts to submit to the Commissioner all documents

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

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

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

shall correct the deficiencies and resubmit it within the time specified by the Commissioner or,

ifno 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 performed

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.
NRG Energy, Inc., et al. 13 Trading Agreement and Order No. 8306

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

Commissioner or a representative of the 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.

24. 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 performed by a date which

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

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

25. 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 an individual, employed by the Respondents, who satisfies the criteria set forth in

Section 22a-174-2a(a)(I) ofthe Regulations ofConnecticut State Agencies and by the

individual(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,

including my inquiry ofthose individuals responsible for obtaining the information, 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."

26. 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 Respondents to an

injunction and penalties.

27. False statements. Any false statement in any information 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.

28. Notice oftransfer; liability of Respondents. Until Respondents have fully complied with this

Trading Agreement and Order, Respondents 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. Respondents' obligations under this Trading Agreement and Order

shall not be affected by the passage oftitle to any property to any other person or municipality.
NRG Energy, Inc., et aJ. 14 Trading Agreement and Order No. 8306

29. 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 Respondents 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 Respondents to undertake further

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

30. Respondents' obligations under law. Nothing in this Trading Agreement and Order shall

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

31. 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 Respondents pursuant to this Trading Agreement and

Order will result in compliance or prevent or abate pollution.

32. Access to premises. Any representative ofthe Department ofEnvironmental 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.

33. 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.

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

respect to these DERCs or Allowances.

35. Notice to Commissioner of changes. Within 15 days ofthe date Respondents become aware of

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

Order, or that any such information was inaccurate or misleading or that any relevant

information was omitted, Respondents shall submit the correct or omitted information to the

Commissioner.

36. Notification of noncompliance. In the event that Respondents become aware that they 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, Respondents shall immediately

notify by telephone the section 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 ofthe initial notice, Respondents 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 Respondents shall comply with any dates

which may be approved in writing by the Commissioner. Notification by Respondents 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.
NRG Energy, Inc., et al. 15 Trading Agreement and Order No. 8306

37. 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 ofAir Management

Department ofEnvironmental Protection

79 Elm Street, 5th Floor

Hartford, Connecticut 06106

(860) 424-3702

Respondents consent 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 Respondents to the terms and conditions ofthe Trading Agreement and Order.

Issued as a final consent order ofthe Commissioner ofthe Department ofEnvironmental Protection.

~!b,=~o..... Arney Marrella ()

Commissioner

TOWN OF~===== MAILED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

Certified Document

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