Exhibil3

STATE OF CONNECTICUT

DEPARTMENT OF ENVfRONMENTAL PROTECTfON

State of COlUj,ecticut

and

Sikorsky Aircraft

Corporation

)

l Trading Agreement

and Order No. 8120

WHEREAS, the Commissioner ofEnvironmental Protection ("Coinmissione() and the Sikorsky

Ai~craft Corpor~tion ('.'.Siko~sk'y") agree that it is in th.e pu1?1ic interest that the¥ work co~pe.ratively

to Ullprove the atr qualIty Wltllin the State ofConnectIcut and that the use of dIscrete errusSlOn r~uction credit ("DERC") 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:

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Sikorsky is a corporation which ·o.....ns and operates a facility involved in aircraft

manufacturing at 6900 Main Str~et ~J. Stratford, COlli.,ecticut ("facility'~.

At the facility, Sikorsky operates five (5) dual-fuel fired steam boilers, numbered 1,

2, 3, 4, and 5 ("boilers") capable of qurning' natural gas or No.6 fuel oil, which are

subject to Section 22a-174-22. Regulations of Connecticut State Agencies

("Regulations'') pertaining to the control ofNOx emissions.

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

testing performed on June 20 through June 26, 1995; June 12, 1997; and October 3

through 10, 2000 resulted in NOx emission rates as follows:

Table 1

SIKORSKY - NOx EMISSION R"TES Al\'D R"CT LIMITS (lbslMlI1Blu)

I. QNL:;

1~'ig4fl :tn"Tlj'T IT;:1!:?!--.T' I c:.'"(','...("'l:;.'"T'l;"c:.T' l S:T'A,.rv'T'"C'c:.~·l O ..........'T'

.~-~ I:~U) Iifiif~79s°~ R';)-'E(I~70~; IRATE No.

I Boiler RI7S·0019 No.6 oil I 48.0 I 0.35 I 0.30 I 0.25

No.1 Natural Gas 50.4 0.19 O.1S 020

Boiler RJ78-001·8 INo.6 oil I 48.0 I 0.31 I 0.30 0,25

No, 2 Natural Gas 50.4 O.IS 0.20 0.20 IBoiler IRl78-0017 No.6 oil I 48.0 .

I 0.32

/

0.30 I 0,25

No.3 •Natural Gas 50.4 0.19 0.16 . 0.20 IBoiler IR178·0016 No.6 oil I 48.0 0.30 0.31 0.25

No.4 Natural Gas 50.4 0.19 0.19 0.20

aoil~ IPI78-0039 No.6 oil 49.5 0.32 0.34 0.25

No.5 Natural Gas 52.5 0.10 0.12 0.20

4. Pursuant to Section 22a-174-220) ofthe Regulations, Sikorsky proposes to acquire

and use approved DERCs monthly, as speclfied ill SectIOn C. or this Tradmg

Agreement and Order to compensate for the excess NOx emissions from May 31,

1995 w1til May I, 2003, or until full compliance with Section 22a·174·22 of the

Regulations is achieved., w~jchever comes first.

(Printed on Recycled ?~per)

79 Elm Streer • Hanford. CT 06106 - 5127

hr,p :lIde p. rMt. eLUS
Sikorsky Aircraft Cornoration Trading Atrreeinent And Order No. 8120

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Section 22a-174-22G) ofthe Regulations allows the owner or operator of a source to

use emission reduction trading to offset excess NOx emissions. Such reductions

sha~l be, at a minim':lm, eguivalent t'? those ~is~ion r~d\lcti?ns t~at wo~ld be

achIeved by complymg wIth all applicable emlSSlOns hmltatIOns in SectIOn 22a-l74-

22(e) ofthe Regulations.

For the period from May 31, 1995 throu~ April 19, 1996, for having passed the

December 31, 1995 deadline for purchasmg DERCs (during which time Sikorsky

burned 869,851 gallons ofNo. 6 fuel oil ",th a heatin~ value of 150,000 Btu/gallon

in the boilers, resullli'g in the excess emissions ofO.Oyg tons of NOx during tlie

ozone season and 5.682 tons of NOx during the non-ozone season) Sikorsky

purchased and retired 5.8 tons ofDERCs an additional ten (10) percent of

required DERCs for late purchase of credits, for a total of 6.4 tons (0.1 ozone season

DERCs and 6.3 non-ozone season DERCs).

On May 23,1996, pursuant to Section 22a-174-22 Ol ofthe Rel(U!ations, Sikorsl)'

acqwred an InItial 2 tons of approved ozone season DERCs and" 14 tons of approved

non-ozone season DERCs to compensate for the above insufficiency and to have

additional DERCs on hand for future for future·use.

Fuel use records and NOx emissions calculations show that Sikorsky did not have

sufficient DERCs on hand prior to use during the period February 2000 through

August 31, 2001 to compensate for 19.37 tons (1.43 tons ozone and 17.94 tons norlozone) of excess NOx emissions.

On October 22, 200 I Sikorsky purchased an additional 50 tons (10 tons ozone and '0

tons non·ozone) to compensate ror the above insufficiency and to have additional

DERCs on hand for future use..

10. . Approved DE~Cs are define<! f~r the purpose ~fthis Trading Agr:ee~ent and ~er

as [hose for which the CommISSIOner has provIded wntten authonzatIOn for use III

compliance 'With Section 22a-174-22 oftbe Regulations.

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

pursuant to S:,.~tion 22a-174-22(d)(3) the Re£;ulations. hereby allows Sikorsky to comply

WIth SectlOn 22a-174-22(d)(!) ofthe RegulatIOns through use ofDERC tradmg.

C. Wilh the agreement of Sikorsky, L1e Commissioner, acting under Connecticut General

Statutes Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a-I77, oiders Sikorsky as

follows:

1. DERCs Use. Approved DERCs·shall be acquired for compliance with the

emission sta..idards in Section 22a-174-22 ofthe Regulations for the period

beginning May 31, 1995 and continuing until Sikorsky achi.eves permanent

cor:npliance for boilers 1, 2. 3, 4 and 5 with the emission standards in Section

22a-174-22(e/ of the Regulations or until May 1, 2003, whichever occurs first.

Sikorsky shal acquire approved DERCs, and document and record the amounts

of NOxentissions and DERCs used by serial number (if assigned) by boilers 1,

2, 3, 4, and 5 monthly, and shall maintain and provide such records in

accordance with the following and Section 22a-174-4 of the Regulations, until

May 1,2003:

a Except for the time period specified in paragraph C.l.(c), before the first day of

each month, Sikorsky shall calculate orojected worst case DERCs required [hat

calendar month for each boiler, as follows:

DERCs (tons) =- rworst case estimated fuel use in MMBtu x (FLER

IbslMMBtu - (0.95 x RACT rate IbslMMBtu))) + 2000 pounds/ton

Initials ~]. 2
Sikorsky Aircraft Corooration

Where:

Trading AQreement ,A.nd Order No. 8120

• R.A.CT rate =MeT rate shown in Table 2 of this Trading Agreement

and Order.

• FLER =full load emission rate as shown in Table 2 of this Tr(lding

Agreement and Order.

e Discount (0.95) = 5% design margin applied to the MCT rate.

• Fuel heatin. value = 150,000 BTU per gallon

b. No later than the twentieth day of each month. calculate DERCs used when

burning #6 oil in the boilers during the preceding calendar month, as follows:

DERCs (tons) :: 1!.E'Jal fuel tise in MMBt>J " (FLER Ib,l1v!MBtu - (0.95 x

RACT rate IbSlMM!jtu))J + 2000 pounds/ton

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On and after November"I. 2001. at a minimum. DERCs required each month

shall be adjusted upwards by 100 percent for any periods that Sikorsky does not

have sufficient DERCs in its possession to compensate for excess emissions

prior to the first day of each month.

Maintain docwnenta~on to attest to the fact that DERCs used during the ozone

season were generated during the ozone season. Generator certification ofthis

fact shall be sufficient. -

After full program review, a.,d if the Commissioner deems it appropriate, t.le

Conlt'"!lissioner may allow the survival and use of approved DERCs beyond April

30,2003.

2. Prior to May 1, 2003, Sikorsky sball comply with the FLERs ,hown in Table 2

belo'" during operation ofeach boiler:

I Table 2

Sikorsl...1' - FLERs and NOx R\CT Emission Rate Limits

ID<"IT FUEL FLER NOx EMISSION

Ob,/MMBtu) RATE LIMITS

(ibs/MMJltu)

Boiler No.1 No.6 oil I 0.39 0.25

I Boiler No.2 No.6 oil I 0.34 I 0.25

I Boiler No.3 I No.6 oil I 0.35 I 0.25

Boil~rNo. 4 I No.6 oil I 0.33 I 0.25

Boiler No. 5 I No.6 oil 0.35 .0.2;

3. FLERs, stack test rates and fuels set forth in Tables 1 and 2 may be modified only

after the consent ofthe Commissioner by written modification of this Trading

Agreement and Order.

1"litial, ~~l1. 3
Sikorsky Aircraft Corooration Tradin2 AlZreement And Order"No. 8120

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Ifthe FLER is exceeded, Sikorsky shall purchase and retire DERCs equal to the

exceedance inlounds per hour per boiler multiplied by the total operating hours of

each boiler an sUmmed together to determine the total insufficiency olus a 100%

premium. If the period of non~compIiance with the FLER is not known, the time

period since the last previous stack test shall be used to calculate the period of noncompliance unless evidence demonstrating, to the Commissioner's satisfaction, that a ~iffer:e!'lt time period shou.ld ?e used is submitte~ by Si~6rsky to the Commissioner,

lJ1 ',:vntmg, and the CommlsslOner accepts such time penad.

Sikorsky shall retain records a.,d supporting documentation as described in this

Trading Agreement and Order for a minimum offive years, corrimencing on the

date such records were created. Sikorsky shall provide the records specified . above to the Comnlissioner within thirty (30) days ofreceipt of a written request

from the Commissioner.

No later than May I, 2003, Sikorsky shall comply v,.ith the requirements of

Section 22a-174-22(d)(1) ofthe Regulations unless this Trading Agreement and

Order is otherwise extended by the Commissioner.

No later than l\1arch 1 of each year this Trading Agreement and Order is in

effect, Sikorsky shall include \Vith the annual emission report to the

Commissioner, the monthly rate and annual total offuel consumption for each

fuel and boiler, DERCs obtained, date obtained, quantity remainrng. serial

numbers if applicable and used each month during tIle previous calendar year.

Pursuant to Section 22a-I74-22(k) ofthe Regulations, Sikorsky shall conduct

NOx emission testing ofthe boilers at least once every five years co:n:nencing

from the most recent date identified in paragraph A.3 ofthis Trading Agreement

and Order.

Aoorovals. Sikorsky shall use best.efforts-to submit to the Commissioner all

docUlpents required by thisTrading Agreement and·Order in a complete and

approvable fonn. lfthe Commissioner notifies Sijcorsky that any doctunent or other

action is defiCient, and does not approve it with conditions or modiIications, it is

deemed disapptoved. and Sikorsky shall correct the deficiencies and resubmit it

within the time specifi'ed by the Commissioner or, if no time 1S specified by the

Commissioner, withL.'"l30~days ofthe Commissioner's notice of deficiencies. In

approving any document or other action under this Trading Agreement a:'"ld 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 pu.-poses ofthis Trading Agreement and Order. Nothing in

.this paragraph shall excuse noncompliance or delay.

10. Definitions. As used in this Trading Agreement and Order, ".comnussioner" mea.,s

the Commissioner or a representative of the Commissioner; I!Ozone season" means

the period from May 1 through Se;:Jtember 30 in any given calendar year, and "NOx

RACT" means NOx Reasonably Available Control Technology. The date of

"issuance" of this 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.

11. Dates. The date ofsubmission to the Commissioner of any document required by

this Trading Agreement and Order shall be the date such docll..'!1ent is received by the

Commissioner. The date of any nonce by the Commissioner. under this Trading

Agreement and Order, including but not limited to notice of approval or disaporoval

of any docum.ent or other action, shall be the date such notice is deposited in the U.S.

mail or i.s personally delivered, whichever is earlier. EXceDt as otherv.;ise specified in

r.....is Trading A-eement and Order, u\e word "day" as used in this Trading

Agreemenf a.,lOrder means calendar day. Any document or acti6n which is

required by this Trading Agreement and Order to be submitted or performed by a

Initials ~.'11'1. 4 Date .?-JI3ro-~
Sikorsky Aircraft Corporation Tradin~ A2:reement And Order 1 0.8120

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date which falls on a Saturday. Sunday or a Connecticut or federal holiday shall be

submitted or perfOimed by the next day which is not a Saturday, Sunday or

Connecticut or federal holiday.

Certification of documents. P.ny document. induding 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's chief executive officer or a duly

authorized representative ofsuch officer, asthose terms are defmed in §22a-430-

3(b)(2) of the Regulations of Connecticut State Agencies, and by the individual(s)

responsible for actually preparing such document, and Sikorsky or Sikorsky's chief

executive officer and each such LT'ldividual shall certify in wtitin~ as follows: "J have

personally examined and am familiar with the information submJrted in this

document and all attachments thereto. and I certify, based on reasonable

i.."l.vestigation. including my inquiry of those individupls responsible for obtaining the

information, that the submitted information is true, a~curate 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-157b ofthe

Connecticut General Statu~es and any other applicable law."

Noncomoliance. This Trading Agreement and Order is a final order of the

Commissioner with respect to the matters addressed herein. a...,d is nonappealable a.."ld

i..-nmediatelyeriforceable. Failure to comply with this Trading Agreement and Order

may subject Sikorsky to an injunction and penalties.

False statements. Any false statement in a..,y information submitted pursuant to this

Trading Agreement and Order is punishable as a criminal offense under §53a-157b

ofthe Connecticut General Statutes and any other applicable law.

Notice oftransfer: liabilitv ofSikorskv. Until Sikorsky has fully complied with this

Trading Agreement and Order. Sikorsky shall notify the COIIlJ."Dissioner in VvTiting no

later than 15 days 8.J...::r.er transferring all or any portion ofthe facility;the operations,

the site or the business which is the subject of this Trading Agreement a.."1d 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 oftitIe to any

property to any other person or municipality.

. S:ommissi~n~r's Dowers. N~thins: in .this Trading Agr~ement and Order shall ~ffect

me CommIssIOner's authonty to Institute any proceedlOg 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 oflaw. Ifat any time the Commissioner determines that the actions tz.ken

by Sikorsky pursuant to this Trading Agreement and Order have not successfully

corrected all violations. fully characteri.zed the extent ~r ~egree of <!?Y 'pollution, or

successfully abated or prevented pollutIOn., the CommIssIOner may mstltute any

proceeding to require Sikorsky to undertake further investigation or further action to

prevent or abate violations or pollution.

Sikorskv's obli2:ations·under law. Not..lllng in this Trading Agreement and Order

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

law.

No assurance bv COmthissioner.. No provision of this Trading Agreement a!1d Order

and no action or inaction by the Commissioner shall be construed to constitute an

assurance by the Commissioner that the actions ta.teen by Sikorsky pursuant to this

Trading Agreement and Order \;'Iill result in compliance or prevent or abate pollution.

J9 Access.to facilitv. Any repr~~enta~ive oft.r.1..e Dep~.i"u-nent ofEnvironme~tal . . ProtectIOn may enter the faCIlity wrtbout pnor notIce for the purposes or rnorutormg

and enforcing the actions required or allowed by this Trading Agreement and Order.

Initials ~~1, ) DatI"; ..:tll:>:I,..-.
SikorskY Aircraft Cornoration Tradine AQreement And Order No. 81~O

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No effect on ri2:hts of ot,her Dersons. This Tradi.n~ A~~eement and Order ~either . creates nor affects any nghts of persons or mumclpalJtles that are not partIe's to thls

Trading Agreement and Order.

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No Creation of ProDertv Ri~hts. This Trading Agreement and Order does not create

any property rights with respect to these DERCs.

Notice to Commissioner of chanQ:es. Within-IS days ofthe date Sikorsky becomes

aware of a change iIi 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 infonnation was omitted, Sikorsky shall submit the

correct or omitted information to the Commissioner.

Notification of noncomDliance. In the event that Si..1(orsky becomes aware that it did

not or may not comply, or did not or may not comply ori time; with any requirement

ofthis Trading Agreement and Order or of any document required hereunder,

Sikqrsky,shall immediately notify by telephone the individual identified in the next

parag~aph a~d shall ~ake all ~easona~le s.teps.to ensure that any noncomp1ia~ca or

delay IS avoIded or, Ifuna:voldable, IS mlillmlzed to the greatest extent possIble.

Within five (5) days ofthe initial'notice, Sikorsky shall submit in writing the date,

time, and duration ofthe noncom.l?liance and the rea~ons for the noncompliance or

delay and propose, for the review and \\<Titten approval ofthe Commissioner, dates

by which compliance will be achieved, and Sikorsky shall comply vvith any dates

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

shall not excuse noncompJiance or delay, and the Commissioner's approval of any

compliance dates pronosed shall not excuse noncompliance or delay unless

specIfically so stated by the Commissioner in v,rriting.

Submission of documents. Any documentrequired to be submitted to the

Commissioner under this Trading Agreement and Order shall, unless otherwise

specified iIi this Trading Agreement and Order or in writing by the Commissioner, be

dIrected to;

Mr. Roland 1. Severance Jr., PE

D'epaI"linent of Emiironmental Protection

Bureau of Air Management

Emissions and CJedit Trading Section

79 Elm Sfreet, 5 Floor

Hartford, Connecticut 06106-5127

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Sikorsky Aircraft Corporation Trading A!2reement And Order No. 8120

SikoiSh.-y consents to the issuance ofthis Trading Agreement and Order without further notice. The

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

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

Sikorsky Aircraft COiporation

BY: Signature: ;J~-B.'-,Yle-(j='().Jl.£")-- Type Name: Susan R. McFarland

Type TitJe: Manager; Environment. Health and Safety

Date: 2/ 13/02

Entered as a frna1tonsent order ofthe C.>t-TIlmission..~onmen.tal Protection numbered 8120

this \S'''" day of H~ ( 7200:;..7 I .

TOWN OF STRATFORD

MAILED'CERTrFIED MAIL,

RETURN RECEIPT REQUESTED

Certified Document

o:\-TRADTNG-?L$'..Titt..D1NOORD=:RS'Si'...1lfslY,8120(Ol.16.02) d-J:

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