SIP DESCRIPTION Norwalk Power LLC Tradin2 Agreement and Order No. SIS4A Modification I 

### I. SIP

- DESCRIPTION OF DERC CREATION ANDIOR USE SIP SUMMARYTABLE Tradine: Ae:reement and Order No. 8184A Norwalk PowerLLC Manresa IslandAve SouthNorwalkCT 06854 Identifier 

# I Client 7741 Town # 137 

### Premise #

# 14.1 Sequenc.e # Contact Ms. Cynthia Karlic Tel: (860) 343-6962 Fax (860) 343-6969 Regional Manager Pollutant and Regulatory Standard: NOx 

# I Section 22a-174-22 ofthe Regulations of Connecticut State Agencies. Nonattainment Area Classification Severe Annual DERCs needed Estimated 5 ozone and 1 non-ozone. Compliance Time Period Until Aoril 30. 2007. Max. Emission Rate: full load emissionrate (FLERl Use. (See Table 1 below):

Table 1 NOx Emission Rates and Allowable Limits Unit Fuel Maximum StackTest FLER Allowable Date of Next 

### PIR number Capacity (ppmvd) IbsiMMBtu 

### Rate Stack Stack MMBtulhr IbsfMMBtu 

### Test Test Due Norwalk-l0 #2 oil 256 94.2 0.52 0.29 6122101 6121106

II. SPECIAL REQUIREMENTS

a. This Trading Agreement and Order Modification supersedes Trading Agreement and OrderNo. 8184A issued on Apri122, 2003. b. Calculations ofcredits used shall he as specified in Trading Agreement and Order No. 8184A.

c. Norwalk Power LLC shall acquire and pennanently retire seven ozone season DERCs for every actual ton ofexcess NOx emitted from the peaking unit during the previous ozone season based upon the actual emissions for each day that Connecticut one hour ozone levels were forecasted to be "moderate to unhealthful", "unhealthful", or "very unhealthful".> ....."',: 

# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

STATE OF CONNECTICUT AND NORW

### ALI< POWER LLC TRADING AGREEMENT AND ORDER NO. 8184A MODIFICATION NO.1

TRADING AGREEMENT AND ORDER MODIFICATION In the matter ofaTrading Agreement and Orderbetween the Commissioner ofEnvironmental Protection ("Commissioner") and Norwalk Power

## lie ("NP"). WHEREAS, the Commissioner andNF, having agreed to the terms and conditions setforth in Trading Agreement and Order No. 8184A signed

### by the Commissioner on April 22, 2003, do 

### now, by 

### mutual agreement, modify said Trading Agreement and Order as follows: 1. Delete paragraph A.S. and substitute the following therefor: Reserved. 2. Delete the date May 

### 1, 2005, and substitute therefor May 1, 2007, in paragraphs A.6. and

## c.l. 3. Delete paragraph C.2.a. and substitute the following therefor: Until May 1, 2007, before the first day ofeach month NP shall have in its possession sufficient approvedDERCs for the current day for the peaking unit based on the following calculations; Before the first day ofeach month, NP shall estimate DERCs required for such month for the peaking unit as follows: (i) 

### At all times: Estimated DERCs (in tons) use [«(FLER in lbslMMBtu)

- (0.95 x NOx allowable rate in IbslMMBtu)) x (estimated fuel use in MMBtu)] .;. 2000 pounds/ton

(Printed on Rccyded Paper) 79 Elm Street • Hartford, CT 06106·5127 hllp:/ldep.sute.ct.us An Equal Opportunity Employu 

### ,Norwalk PowerLLC 2 Trading Agreement andOrder No. 8184A Modification No. I No later than the twentieth day ofeach month, NP shall calculate and permanently retire DERCs used in the preceding calendar month. as follows: , Actual OERCs (in tons); [«(FLERin IbslMMBtu)

- (0.95 x NOx allowable rate in IbslMMBtu)) x (actual fuel use in MMBtu)] .,. 2000 pounds/ton Where:

• NOx allowable rate 

### = allowable limit rate in IbslMNlBtu shown in Table 1 of this Trading Agreement and Order.

• FLER

### = full load emission rate in IbslMMBtu as shown in Table 1 ofthis Trading Agreement and Order.

• Discount (0.95) ::; 5% design margin applied to the allowable limitrate. ii) 

### During the ozone season onlv: No later than December 31 steach year, NP shall acquire and permanentlyretire seven ozone season DERCs for every actual ton ofexcess NOx emitted from the peaking unit during the previous ozone season based upon the actual emissions for each day that Connecticut one hour ozone levels were forecasted to be "moderate to unhealthful", "unhealthful", or "very unhealthful", until such time that the EPA revokes the I-hour standard. Upon such revocation, NP shall calculate and permanently retire seven ozone season DERCs for every actual ton ofexcess NOx emitted from the peaking unit during such ozone season based upon the actual emissions for each day that Connecticut eight hour ozone levels were forecasted to be "unheo.lthy for sensitive groups", "unhealthy", or "very unhealthy". Where: Actual ton ofexcess NOx emitted; [«(FLER in IbslMMBtu)

- (0.95 x NOx allowable rate in IbslMMBtu)) x (actual fuel use in MMBtu)] .,. 2000 poundsltQn The total actual tons ofexcess NOx emitted from the peaking unit during forecasted ozone exceedance days shall be multiplied by seven and then rounded to the next greater whole ton, to determine the numberofDERCs to be permanently retired. This requirement is in addition to the NP's requirement to estimate excess emissions and subsequentpermanent retirement ofa sufficient number ofapproved DERCs in accordance with paragraph C.2.a.(i) ofthis Trading Agreement and Order. 4. Delete paragraph C.2.b. and substitute the following therefor:

### Norwalk PowerliC

Reserved. 

### 3 

### TradingAgreement and Order No. 8184A Modification No. I

5. Delete paragraph C.2.c. and substitute the following therefor: 

### During the non-Olone season: Until May I, 2007, from October 1through April 30, inclusive, 

### each year, the peaking unit shall, in addition to meeting the 24-houremission 

### limit in Table 22-1 ofSection 22a-174-22 ofthe Regulations, meet anon-ozone season emission limitof0.15 IblMMBtu. Priorto October 1, 2004, October I, 2005 and October I, 2006, NP shall estimate and acquire the 

### amount ofDERCs orallowances required for such non-ozone season needed to comply with Section 22a-174-22(e)(3) ofthe Regulations as follows: 

### Estimated DERCs (tons) use = 

### [Estimated fuel use in M11Btu from October 1 through April 30 x (allowable emissionrate in IbsIMMBtu

- (0.95 x 0.15 IblMMBtu))J 2000 Ibslton 6. Delete paragraph C.2.d. and substitute the following therefor: 

### No laterlhan May 31 of2005,2006 and 2007, in addition to theDERCs retired pursuant to paragraph C.2.a. ofthis Trading Agreement and Order, NP shall 

### calculate and pennanently retire DERCs used in the preceding non-ozone season as follows: 

### Actual DERCs (tons) used = 

### [Actual fuel use in**~tu** 

### from October 1through April 30 x (allowable emission rate in Ibstrv1l\1Btu

- (0.95 x 0.15IblMMBtu))J + 

### 2000 Ibs!ton 7. 

### Delete paragraph C.6. and substitute the following therefor: Ca) Annual DERC RepoIt. No laterthan March I ofevery year after 

### issuance ofthis TradingAgreement and Order, NPshall submitin writing to the Commissioner, arecord ofeach sale orothertransfer ofDERCs forthe previous calendaryear. NP shall also include actual NOx emissions from the peakingunit and the amountofall DERCs used (including serial numbers (if assigned) and DERCs purchased from otherfacilities). These reports shall be 

### on fonns prescribedbythe Commissionerand shall be 

### in monthly increments, and by ozoneand non ozone seasons. (b) 

### Starting on October 1, 2004: No later than July 30 ofevery yearafterissuance ofthis Trading Agreement and Order, NP shall submit in writing to the Commissionerthe non-ozone season fuel consumption and amountofallNorwalk PowerLLC 

### 4 

### Trading Agreement and Order No. 8184A Modification No.1 DERCs used (including serial numbers 

### (ifassigned) and approvedDERCs purchased from otherfacilities) for the peaking unit during the Octoberthrough 

### April time period in the 

### previous calendaryear. These reports shall be on a fonn prescribed by the Commissioner. 8. Delete paragraph C.? and substitute the following therefor: Allowance Use. Pursuant to Section 22a-174-22(d)(3) ofthe Regulations, NP may use NOx allowances, until May 1,2007, for the peaking unit pursuant to Section**22a~174-22(j)** ofthe Regulations to achieve all or a portion ofthe reductions required by Section 22a-174-22 ofthe 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 NP to use NOx allowances, NP shall create a general account or use an existing compliance account oroverdraft account in EPA's NOx Allowance Tracking System C'NATS"); and b. Each allowance used for compliance with Section 22a-174-22 ofthe Regulations shall 

### be equivalentto one discrete emission reduction credit. Allowances shall be considered used for compliance with Section 22a174-22 ofthe Regulations when they are transferred from the facility's NOx general account in the NATS or the facility's NOx compliance account in the NATS to the

# cr State NOx Retirement Account (Account II) CTOOOOO00300 in the NATS). 9. Delete paragraph e.8. and substitute the following therefor: DERC Shortfall. At a minimum, DERCs required shall be adjusted upwards by 100% ifDERCs are not in NP's possession for use prior to the first day ofeach month or applicable season. However, nothing in this Trading Agreement and Ordershall affect the Commissioner's authority to institute any proceeding or take any otheraction to require additional upward adjustment, based on the gravity of any alleged noncompliance or violation oflaw. NP shall permanently retire the quantity ofDERCs equivalentto the excess emissions plus a 100% premium within sixty (60) days ofNP's discovery ofthe DERC shortfall. NP shall certify and report any such'DERC retirement to the Commissionerin accordance with paragraph C.30. ofthis Trading Agreement and Order. 10. Delete paragraph C.lO. and substitute the following therefor: FLER Exceedance. Noncompliance with an establishedFLER shall subject NP to

### NorwalkPowerLLC 

### 5 Trading Agreement and Order 

### No. 8184A Modification No. I make restitution by 

### matching the quantity ofemissions ("true up") caused by 

### the exceedance plus a 100% premium. The true up in tons ofDERCs shall be equal to the FLER exceedance in IbsJM:M:Btu, multiplied 

### by the total heat input during the 

### period ofnoncompliance divided by 

### 2000 Ibs/ton. If

### the period ofnoncompliance is not known, the time period from the completion ofthe last/previous 

### Commissioner witnessed emission test through 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 ortake any other action to require additional upward adjustment, based on the gravity ofany alleged noncompliance or violation oflaw. NP shall permanently retire DERCs calculatedin accordance with the above plus a 100% premium within sixty (60) days ofNP's discovery oftheFLER exceedance. NP shall report anyFLER exceedance to the Commissionerin accordance with paragraph C.30. ofthis Trading Agreement and Order. I!. Delete paragraph C.13. and substitute the following therefor: Extension. No laterthan May 1, 2007, with respect to the peaking unit, NP shall comply with the requirements ofSections 22a-174-22(d)(I) and 22.-174- 22(d)(2)(A) ofthe Regulations. There is no assurance that after full program review ofthis and otherTrading Agreements and Orders that the Commissioner will grant a written extension ofthis Trading Agreement ang Order. 12. Delete paragraph C.14. and substitute the following therefor: Future Compliance Report. On orbefore September 1, 2006, NP shall submit a report in writing to the Corrunissioner, as directed in paragraph C.31. ofthis Trading Agreement and Order, indicating how the fac.ility shall comply with Section**22a-174~22** 

### ofthe Regulations with respect to the peaking unit on and after May 

### 1. 2007. 13. Delete paragraph C.17. and substitute the following therefor: Definitions. As used in this Trading Agreement and Order, "ApprovedDERCs" are those for which the Commissionerhas provided written authorization for use in compliance with Section 22a-174-22 ofthe Regulations; "Commissioner" means the Commissioneror arepresentative ofthe Commissioner; "Non-ozone season" means the period from October 1 tmough April 30 in any given calendar year; "Ozone season" means the period May 1 through September 30 in any given calendaryear. 14. Delete paragraph C.1S. and substitute the following therefor:

### Norwalk PowerLLC 

### 6 Trading Agreement and Order No. 8184A Modification o. 1 Dates. The date of"issuance" ofthis Trading Agreement and Orderis the date the Trading Agreement and Orderis deposited in the U.S. mail orpersonally delivered, whicheveris earlier. The date ofsubmission to 

### the Commissioner ofany document required by 

### this Trading Agreement and Order shall be 

### the date such document is received by 

### the Commissioner. The dale ofany notice by 

### the Commissioner underthis Trading Agreement and Order, including but not limited to notice ofapproval or disapproval ofany document orother action, shall be the date such notice is deposited in the U.S. mail oris 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 Ordermeans calendar day. Any document or action which is required by this Trading Agreement and Orderto be submitted orperfonned by adate which falls on a Saturday. Sunday or a Connecticut orfederal holiday shall be 

### submittedorperfonned by 

### the next day which is not a Saturday, Sunday or Connecticutorfederal holiday. 15. Delete the word "individual" and substitute therefor the word "Section" in paragraph C.30. 16. Delete the name "Mr: Michael LaFleur" in paragraph C.31. All othertenns and conditions ofTrading Agreement and Orderno. 8184A issued by the Commissioner acting underChapter446c, Sections 22a-6. 22a-171, 22a·174, 22a-176, and 22a· 177 ofthe Connecticut General Statutes shall remain in effect

### Norwalk Power LLC 7 Trading Agreement and Order No. 8184A Modification o. I 

### NP herebyconsents (0 

### the entry ofthis modification to the Trading Agreement and Orderwithout further notice. Norwalk PowerLLC Signature: 

# flLtL<3f Type Name: 

# !hItL 

# L "11_ Type Title:

# R~JIMc.I 

# 8Ji1I

# (Of'IiZerr/a./ Date: 

# 3-6-COIssued as amodification ofan Orderofthe CommissionerofEnvironmental Protection.

Date



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