The states participating in the Regional Greenhouse Gas Initiative (RGGI) have announced the results of the third auction for RGGI carbon dioxide (CO2) allowances. The March 18 auction was the first since compliance obligations under RGGI's first three-year control period, which began on Jan. 1.
All of the 31 million allowances for the 2009 vintage sold at a clearing price of $3.51 per allowance. In a parallel offering, the RGGI states also auctioned allowances for the second three-year control period beginning in 2012, providing a first look at future market prices for RGGI CO2 allowances.
The 2 million allowances for the 2012 vintage cleared at a price of $3.05 per allowance. By the end of 2009, the RGGI states will have offered for sale 5% of the total supply of 2012 vintage allowances.
The auction raised over $117 million for energy efficiency, renewable energy and other consumer benefit programs in the 10 RGGI states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and
Potomac Economics, RGGI's independent market monitor, observed the auction and confirmed that it was fair and consistent with noticed auction procedures.
According to Potomac, compliance entities and their affiliates won 78% of the 2009 allowances and 93% of 2012 allowances. The high percentage of allowances won by compliance entities at auction continues a trend established in the two pre-compliance auctions held in September and December 2008 in which compliance entities won 80% and 85% of allowances, respectively.
SOURCE: Regional Greenhouse Gas Initiative Inc.