~y~

STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of )

)

The State of Connecticut )

)

and )

, )

Northeast Generation ~ompany)

Trading Agreement and Oraer No. 8175

Whereas, the Commissioner c.t Environmental Protection ("Commissioner") and Northeast Generation Company ("NGC") agree that it is in the public interest that they work cooDeratively to imDrove the air Quality within

the State of Connecticut ana that the use of emission reduction credit

("ERe") trading to reduce nitrogen oxide ("NOx") emissions \.-Jill achieve

this result in a timely and cost-effective manner:

A. At the request and with the agreement of NGC, the Commissioner finds

the following:

1. NG~ i~ an exempt ~hole~ale e~ectric.generating.companywith its

orlncloal place or buslness 1n Berl1n, Co~~eCt1cut. On or

before· February 29, 2000 NGC will purchase from The Co~~ecticut

Light and Power Comoany and then own one (1) oiece of fuelburning equioment C"oeaking unit") identified- in Table 1 of thi~ Tr~dlng-Ag~eement and Order. This peaking unit is a

cornoustlon turolne.

2. On or before February 29, 2000 Northeast Generation Services

Comoany will ooerate the Qeaking unit identified in Table 1 of

this Trading Agr~ement ana Order at NGC's facility.

3. Official U.S. Environmental Protection Agency (~EPA") Reference

Method 7E stack testing oerformed on the date indicated in

Table 1, resulted in a NDx emission rate set forth in Table 1.

Table 1

NGC - NOx EMISSION RATE AND RACT LIMIT (lbs{MMStu)

?eaking FUEL FLER NOx RACT Stack Stack Test Date of

Unit (lbs{MM3tu) Rate Test Rate Stack Test

(lbs{M!Gtu) Rate (lbs{MM:9tu)

(ppmvd)

Tunnel 10 other 0.72 0.289 168.1 0.65 10{9{96

oil

(Printed on RCGYaJod PIper) Date

Elm Streel • Hlrlrord, CT 06106·5127

ht:p:lldep.Sllle.tt. us

All ~qutll Opportunity Employer

4.

s.

The emission rate for the peaking unit and fuel soecified in Table 1

1S in excess of Section 22a-174-22, Table 22-2, of the Regulations of Connecticut State Agencies ("Re9¥lations~), NOx emission rate

limits (Reasonably Ava1lable Control Technology "R~CT~).

Pursuant to Section 22a-174-22(b) of the Regulations, the oeaking unit is subject to Sections 22a-174-22(d) through (k) of the

Regulations, pertaining to the control of NOx emissions.

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Northeast Generation Company Trading Agreement

and Order No. 8175

6. In accordance with Section 22a-174-22(j) of the Regulations, NGC

proposes that for the peaking ~~it identified in Table I, NGC shall

use ERC trading when burning "other oil N , as that term is defined in

Section 22a-174-22 of the Regulations.

7. Pursuant to the Deoartment of Environmental Protection's "Credit

Trading for Sources with Irregular NOx Emissions N policy, with a

revised date of November 5, 1997, attached hereto and incorcorated

by reference into this T=ading Agreement and Order as E~~iblt I, the

peaking unit has peak daily NOx emissions greater than three times

the average daily emissions during the ozone season and is therefore

considered a source with irregular NOx emissions.

8. Based on DE? aooroved stack test data, it has been determined that

the peaking unli's emissions will not meet the aoplicable requ~rements of RACT contained in Section 22a-174-22 of the

Regulations. NGC proposes to use a Full Load Emission Rate (·FLER~)

identified in Table 1 for the purposes of calculating ERCs required.

9. On December 6, 1999, pursuant to Section 22a-174-22<j) of the

Regulations, NGC has acquired from the Clean Air.Act~on Corporation

ten (10) tons of aooroved non-ozone season ERCs ~n order to meet

applicable RACT requirements and the requirements of this Trading Agreement a-~d Order for the following months operation. NGC intends

to continue acquiring approved ERCs as needed.

10. Aooroved ERCs are defined for the ourcose of chis Trading Agreement

ana Order as those for which the Commissioner has orovided written

authorization for use in comoliance with Section 2~a-174-22 of the

Regulations. -

3. The Commissioner, in accordance with the provisions of this Trading Agreement and Order, and oursuant to Sect~on 22a-174-22 (j) of the

Regulations hereby allows-NGC to comoly with Section 22a-174-22 of the

Regulations through use of ERC trading referenced in Section Al herein, to

acnieve the nitrogen oxide emission reduction required by Sect~on 22a-174-

22 (d) (2) of the Regulations.

C. With the agreement of NGC, the Commissioner, acting under Cop~ecticut

General Statutes Sections 22a-6, 22a-171, 22a-174, 22a-176, and 22a-177, orders NGC as follows:

1.

2.

3.

4.

Upon issuance of this Trading Agreement and Order NGC shall comoly during operation of the peaklng unit with the FLER shown in Table 1

above.

On and after the date which NGC purchases the oeaking unit

identified in Table I of this Trading Agreement and Order, NGC shall

have in its oossession sufficient aooroved ERCs to meet aoolicable

RACT requirements and the requirements of this Trading Agreement and

Order.

On and after the date which NGC ourchases the oeaking unit

identified in Table 1 of this Trading Agreement and Order, NGC

shall, on a daily basis, document ana record the amounts of all fuel

used by the oeak~n9 unit each day and the number of ERCs used for

the ozone season (trom May 1 through September 30 of each year) and

non-ozone season (the remainder of the year) .

On and after the date which NGC ourchases the Deaking ~~it

identified in Table I of this Trading Agreement and Order, pursuant to Section 22a-174-22(j) of the Regulat~ons, NGC shall acqu~re

sufficient aooroved ozone and non-ozone season ERCs in oreer to meet

applicable RAtT reauirements and the reauirements of this Trading Agreement and Order for the following month's operation.

Initials -2-
Northeast Generation Company Trading Agreement

and Order No. 8175

b.

5.

6.

In accordance with Exhibit 1 of this Trading Agreement and Order,

ozone season ERCs for use during the ozone season shall be purchased by NGC prior to the begi~~ing or the ozone season.

On and after the date which NGC purchases the oeaking unit

identified in Table 1 of this Trading Agreement and Order, NGC shall

maintain and orovide the records re~ired by paragraDh C.3. of this

Trading Agreement and Order in accordance w~tn the following and

Section 22a-174-4 of the Regulations, and shall:

a. Have in its Dossession sufficient approved ERCs for the current

day! ~a~ed on the following calculat~ons (described also in Exh~b~t 1) i

At all times (mass calculation):

ERCs (in tons) = [( (FLER in lbs/MMBtu) - (0.95 x NOx RACT in

lbs/MMBtu)) x (actual fuel use in MMBtu)] + 2000 pounds/ton

During the ozone season only (peak day calculation) :

the maximum actual excess NOx emissions (in lbs) on any of the

days proiected by the Commissioner to be "moderate to unnealthtul,H "uhhealthful,H or "very u!L~ealthful " divided by 3 and then divided by 13 (with the result in tons) :

ERCs (in tons) = [(Maximum excess NOx in lbsl + 3J + [13 Ibs/day/tonl ;

At a min~mum, adjust upw~rds by 100% the ERCs required if ERCs

are not In NGC's possess~on pr~or to use;

f.

d.

c.

h.

e.

g.

As described in Exhibit 1 of this Trading Aoreement and Order,

to the extent that ERCs used to offset on a~Deak day basis

during the ozone season exceed the total mass excess emissions, remaining ERCs may be used in the non-ozone season in the same

or subsequent years until May 1, 2003;

Document and record daily fuel use, excess NOx emissions and, during the ozone season, the ozone classification as forecasted

by the Commissioner on the previous day;

No later than March If 2000, 2001, 2002, 2003 and 2004, include

with its annual emiss~ons reDort to the Commissioner, ERCs used

(calculated as described in section C.6.a. above), by ozone and

non-ozone seasons, for the previous. calendar .year;

Retain the records and supoorting documentation as described in

this section for a minimum~of five years, commencing on the

date such records are created; .

Maintain documentation to attest to the fact that ERCs used

during the ozone season were generated during the ozone season.

The ozone season is from May 1 through SeEtember 30 in any calendar year. Generator certificatlon or this fact shall be

sufficient; and

Provide the- records specified above to the Commissioner within thir~y ~30) days of receipt of a written request from the Comm~ss~oner.

7. Pursuant to the intent of Section 22a-174-22a (fl (4) of the

Regulations, NGC may! for a budget source, use allowances acqyired pursuant to the prov~sions of Section 22a-174-22a of the Regulations to comoly with subsection (e) of Section 22a-174-22 of the

Regulations Eursuant to the provisions of subsection (j) of Section

22a-174-22 or the Regulations as long as NGC remains an owner of

that budget source, tor purooses of chis Trading Agreement and

Order. Any allowance used tor compliance with subsection (e) of

Initials -3- Date //.zc/.uct?
Northeast Generation Company Trading Agreement

and Order No. 8175

8.

9.

10.

11.

Section 22a-174-22 of the Regulations shall be subject to all

restrictions and/or reauirements aDolicable to ERCs contained in

this Trading Agreement -and Order ana/or Section 22a-174-22a of the

Regulations.

The terms and conditions established by this Trading Agreement and

Order shall become effective on the date NGC purchases the peaking unit identified in Table 1 of this Trading Agreement and Oraer, and

upon issuance of this Trading Agreement and Order.

No later than May 1, 2003, NGC shall comDly with the re~irements of

Section 22a-174-22(dl (2) of the Regulations. However, after full

orogram review of this and other Trading Agreements and Orders and, if aetermined to be aooropriate. the Commissioner may grant a

written extension of tnis Trading Agreement and Order.

8efioit~ons. As used in this order, "Commissioner" means the omm~ss~oner of Environmental Protection or an agent of the

Commissioner. "Other oil" means a fuel that is li9Uid at standard

conditions and is not residual oil. "Residual oil' means any fuel

oil of No.4, No. S. or No.6 grades, as defined by Commercial

Standard C.S. 12-48. "Ozone season" means the oer~od from May 1

through Seotember 30 in any given calendar year~ "Issuance" means

the date this Trading Agreement and Order is deoosited in the u.S.

Mail or the date it ~s personally delivered, whichever is earlier.

Notificaai§D of noncomoliance, In the event that NGC becomes aware t~at ~t. 1 not or ~ay not comply, or d~d not or may not comply on t~me, w~th any reau~rement of th~s Trad~ng Agreement and Order or or

any document reauired here~~der, NGC shall br telephone immediately notify the Bureau of Air Management and shal take all reasonable

steos to ensure that any noncomoliance or delav is avoided or, if

unavoidable, is minimized to the greatest extent oossible. NGC

shall also notify the Commissioner in writing within ten days of

becoming aware of the noncompliance or potential noncomnliance

stating the date, time, and uuration of the noncomoliance, the

reasons for the noncomoliance or delay and all activities which NGC

and its agents, emoloyees and representatives took to avoid or

reoair the results-of the noncomoli~~ce and orevent the noncomoliCL~ce, and pronose, for the review and written aoproval of

the Commissioner, dates by which comoliance will be achieved. NGC

shall comply with.any dates which may be aooroved in writing by the

Commissioner. Notif1cation by NGC snaIl 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 Com...nissioner in writing·. Nothlng herein shall

negate NGC's obligation' to comoly with Section 22a-174-7 of the

Regulations. To the extent that the orovisions of Section 22a-174-7

are inconsistent with the orovisions of this Trading Agreement and

Order, the more stringent of the orovisions in the Traaing Agreement and Order or Section 22a-174-7 shall control.

12. Certificat~on of do~uments, Any document, including but not limited

to any not~ce, WhlC. 1S reauirea to be submitted to the Commissioner

under this Trading Agreement and Order shall be signed by the

responsible corporate officer of NGC or a duly autnorizea

reoresentative of such officer, as those terms are defined in

Section 22a-430-3(b) (2) of the Re~lations, and by the individual or

individuals resoonsible for actually oreoaring such document, each

of whom shall examine and be familiar· with the information submitted

in the document and all attachments thereto( and shall make inquiry of those individuals responsible for obtai~~ng the information to

determine that the information is true, accurate, and complete, and

each of whom shall certify in writing as follows:

"I have personally examined and am familiar with the information

submittea in this document and all attachments thereto( and I

certify that based on reasonable investigation, includlng my inquiry

Initials -4- Date ';2~/.2."'P
Northeast Generation Company Trading Agreement

and Order No. 8175

13.

14 .

15.

16.

17.

18.

19.

of those individuals responsible for obtaining the information, 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 nunishable as a criminal offense

under Section 22a-175 of the Connecticut General Statutes or, in

accordance with Section 22a-6 of the Cop~ecticut General Statutes,

under Section 53a-157b of the Cop~ecticut General Statutes, and in

accordance with any other applicable statute."

rIg~f ~~~~~~~g~ ~gg orser. This Trading Agreement and Order is the

or er by and between tne Commissioner and NGC

with resnect,to the matters addressed herein, and shall not be

modified· without the written agreement of both parties.

False scatemeRts, Any false statement in any information submitted

pursuant to t 1S Tradlng Agreement and Order may be punlshable as a

criminal offense under Section 22a-175 of the Connect~cut General

Statutes or, in accordance with Section 22a-6, under Section

53a-1S7b of the Connecticut General Statutes.

N0ffce of !ra§Sfer; lfiebi+itv of ~GC and otheas, Until NGC has

!u y comp ~e wlth t lsradlnggreement an Order, NGC shall

notify the Commissioner in writlng no later than fifteen (15) days after transferring all or any portion of the facility, the

ooerations, the s~te or the nusiness which are the sUbject of this

Trading Agreement and Order, or obtaining a new mailing or location

address, Any license transfer shall be conducted in accordance with

Section 22a-60 of the Coa~ecticut General Statutes. NGC's

obligations under this Trading Agreement and Order shall not be affect~d.by ~he passage of title to any property to any other person

or mun~c~pal~ty.

C9~fsstQner's powers. ~othing in thi~ Tradi~g Agreement and Order

sna arrect tne Comm~ssloner's authorlty to lnst~tute any oroceeding or take any other action to orevent or abate v~olations

of law, nrevent or abate pollution, recover costs and natural

resource-damages and to lmnose nenalties for violations of law

which are willfui or criminally negligent or for which penalties have not been soecificallr nrovidea in this Trading Agreement and

Order, including but not imited to violations of any oermit issued

by the Commissioner. If at any time the Commissioner aetermines

that the actions taken by NGC nursuant to this Trading Agreement and

Order have not fully achleved complian~e with Section 22a-174-22 of

the Regulations, the Commissioner may institute any nroceeding against NGC and/or require NGC to unaertake further investigation or

further action.

NGa'S oblioati~os unde~ l~wl Nothing in this Trading Agreement and

Or er snaIl re 1eve NG 0: other obl~gations under appl~cable federal,' state and local law. .

Access to re.ords and faci~ Any representative o~ the

Deoartment or Env~ronmentar-PrOtectlonmay enter and lnsoect the

facility and insnect ~~d copy records witnin normal business hours

without prior notice for the purposes of monitoring and enforcing the actions required or allowed ny this Trading Agreement and Oraer.

No effe~t ~n r~gnts of other per~9ns, This Trading Agreement and

Order s al neltner create nor arrect any rights 9I persons who or

municioalities which are not narties to this Tradlng Agreement and Order. . .

21.

20. No Creation of Prooertv Riahts: This,T;ading Agreement and Order

aoes not create ~'y property r~ghts w~tn respect to these ERCs.

~Qtice EO Commissioner ot chanoes, Within fifteen (IS) days of the

aate NG becomes aware or a change in any information subm1.tted to

the Com~issioner under this Trad~ng Agreement and Order, or that any suc~tion was inaccurate or misleading or that any relevant

Initials -5- Date ~..l.t-/J..()()(l
Northeast Generation Company Trading Agreement

and Order No. 8175

information was omitted/ NGC shall submit the correct or omitted

information to the Commlssioner.

22. S~bmission 9' dQcum~nts. P~y document recruired to be submitted co

tne Commlssloner unaer this Trading Agreement and Order shall, u~less otherwise specified in writlng.by the Commissioner, be

dlrected to:

Mr. David Jawin

Deoartment of Environmental Protection

Bureau of Air Management Compliance and Field ODerations Division

Emissions and Credit Trading Section

79 Elm Street

Hartford, Connecticut 06106

NGC consents to the issuance of this Trading Agreement and Order without

fu=ther notice. The undersigned certifies that he/she is fully authorized

enter into this Trading Agreement and Order and to legally bina NGC to the

terms and conditions or tne Trading Agreement and Order.

to

Signature:

Type Name:

Type Title,

Date:

~~ompanY

Bruce D. Kenyon

President

January 26. lOOO

Issued as a final consent order of the Commissioner of

Environmental Protection on

rthur J. RQcaue, Jr.

Commission .. -

TOWN/CITY OF PRBSTON

LAND RECORDS

~AILED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

.- Certified Document,

-6-