NEWS FROM THE DELAWARE DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENTAL CONTROL
Oct. 14, 2008
Vol. 38, No. 468
FOR IMMEDIATE RELEASE
Contact: RGGI Inc., Jonathan Schrag (212) 417-7325
DNREC Public Affairs, Melinda Carl, (302) 739-9902
All Ten States of the Regional Greenhouse Gas Initiative Issue Notice for Second Pre-compliance Auction
Today, the Regional Greenhouse Gas Initiative (RGGI) initiated the bidding process for its second auction of carbon dioxide (CO2) emission allowances, to be held on Dec. 17, 2008.
The second RGGI auction for CO2 allowances expects to offer allowances from all ten states participating in RGGI. Those
states are: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont. States will offer a total of 31,505,898 allowances for sale.
The reserve price for Auction 2 will remain $1.86, according to determinations by participating states that cited the very early stage of the development of a secondary market for CO2 allowances. Before CO2 Allowance Auction 3, the participating states will consider whether enough data is available to justify the calculation of a current market reserve price.
Today’s release of the Auction Notice, Qualification Application, and Intent to Bid opens the process that potential bidders must follow to qualify for, and participate in, December’s CO2 allowance auction. The ten RGGI states urge prospective bidders to apply and qualify for the auction by downloading auction documents from the RGGI website at: http://www.rggi.org/co2-auctions/information
All potential bidders must have successfully completed the qualification process to participate in the auction.
More information about the auction will be available through a webinar to be held 2 - 4 p.m., Tuesday, Oct. 14, 2008. Instructions to participate in the webinar are available at: www.rggi.org/webinaraccess.
The December 17 auction follows the success of the first RGGI auction held September 25, which produced a clearing price of $3.07 per allowance and was described by the independent market monitor as "robust."
RGGI, Inc.’s Executive Director Jonathan Schrag said, “The second RGGI auction will build upon the success of the September auction, demonstrating that the RGGI states are administering this market in a dependable, transparent manner. The qualification process is extremely important, so the states urge potential bidders to take advantage of the information and technical assistance being made available online.”
The ten Northeast and Mid-Atlantic states have designed this first market-based, mandatory cap-and-trade program in the U.S. to reduce greenhouse gas emissions in a simple and constructive way. These pioneering states have committed to cap and then reduce the amount of CO2 that power plants in their region are allowed to emit, limiting the region’s total contribution to atmospheric greenhouse gas levels. The auction will generate revenues for investment in energy efficiency and renewable energy in the RGGI region and fund programs to combat fuel poverty and support consumers. The first auction generated more than $38 million and the six states who offered allowances for sale are using the revenue to provide consumers with tools to lower their monthly energy bills and to create green jobs.
The RGGI auction was designed by the ten participating RGGI states with input from stakeholders and provides each state with a mechanism for distributing its CO2 allowances. Any CO2 allowances purchased at this auction can be used by a regulated facility for compliance in any of the RGGI states.
Under the RGGI process, after the ten participating states have stabilized power sector carbon emissions at their capped level by 2014, the cap will be reduced each year from 2015 through 2018.
By participating in this auction each of the ten RGGI states will have met the commitment made in December 2005 to have a program in place by Jan. 1, 2009. These early auctions will ensure an ample opportunity for bidders to obtain the allowances they will need for compliance across the entire ten-state region.
NOTES TO EDITORS:
Details on the Webinar
More information about the auction will be available through a webinar to be held 2 - 4 p.m., Tuesday, Oct. 14, 2008. The webinar will be open to any party interested in participating in Auction 2. The webinar will present the auction format, forms that need to be submitted, and review process. No questions will be taken during the webinar.
To access the webinar audio, call the teleconference access number, 888.875.4624 and enter the participant code, 555661#. To access the webinar slides, go to the auction website and download them. The slides for the webinar will be posted on the auction website no later than 8 a.m., Tuesday, Oct. 14, 2008. Alternatively, to view the slides as the presenter goes through them, please go to http://www.infiniteconferencing.com/Events/worldenergy. Select the participant option and then enter participant code 555661 and the following information: name, company, email address, and title.
RGGI History
Initial CO2 allowance auctions are being held in 2008 as pre-compliance events to facilitate market price discovery and compliance planning by regulated CO2 emitters prior to the beginning of the first RGGI compliance period on January 1, 2009. A CO2 allowance represents a permit to emit one ton of CO2, as issued by a respective participating state. A power plant must hold CO2 allowances equal to its emissions to demonstrate compliance at the end of each compliance period.
Under RGGI, the ten participating states will stabilize regional power sector CO2 emissions at their capped level through 2014, and then reduce the cap by 10 percent at a rate of 2.5 percent each year between 2015 and 2018. Regulated power plants will be able to use a CO2 allowance issued by any of the 10 participating RGGI states to demonstrate compliance with an individual state CO2 Budget Trading Program. Because CO2 allowances issued by any participating state will be usable across all state programs, the 10 individual state CO2 Budget Trading Programs, in aggregate, will form one regional compliance market for carbon emissions.
All participating states anticipate formal launch of their regulatory programs by the beginning of 2009. Any CO2 allowances purchased in either of the two pre-compliance auctions can be used to demonstrate compliance in any of the 10 state programs.
