The 10 states (including NH) participating in the Regional Greenhouse Gas Initiative (RGGI), the nation's first market-based regulatory program to reduce greenhouse gas emissions, announced the results of its 11th quarterly auction of carbon dioxide (CO2) allowances. The auction, held Wednesday, March 9, yielded $83,425,588 for states to invest in programs that enable energy consumers-households, factories, farms and small businesses-to control their energy budgets.
All of the of the 41,995,813 current control period CO2 allowances (2009-2011) offered in the auction sold at a price of $1.89 per allowance. Thirty-six entities submitted bids to purchase 1.1 times the available supply of allowances. Electric generators and their corporate affiliates purchased 85 percent of the current control period allowances.
States also offered a smaller number of CO2 allowances for a future control period (2012-2014). All of the 2,144,710 future control period allowances offered in the auction sold at a price of $1.89 per allowance. Seven entities submitted bids to purchase 1.4 times the available supply of allowances. Electric generators and their corporate affiliates purchased 56 percent of the future control period allowances.
As they have for each previous auction, the participating states published a report from the independent market monitor with aggregate auction results and a list of all qualified participants that submitted an intent to bid in the auction. According to the market monitor's report, electric generators and their corporate affiliates have won 85 percent of all CO2 allowances sold in Auctions 1-11 and will hold 97 percent of CO2 allowances in circulation following the settlement of Auction 11. Additional details may be found in the Market Monitor Report for Auction 11, available at www.rggi.org/docs/Auction_11_Release_Report.pdf.
"The RGGI states have put in place the infrastructure for a reliable, secure North American carbon market," said David Littell, a commissioner of the Maine Public Utilities Commission and chair of the Regional Greenhouse Gas Initiative, Inc. board of directors. "The RGGI auctions continue to provide power plants with the carbon allowances they need, and states will continue to invest millions from the RGGI auctions for energy bill savings, new jobs and improved business competitiveness."
States are investing proceeds from the RGGI auctions, now more than $860.9 million, in programs to save energy consumers money, create jobs and make businesses more competitive.
For example, RGGI-funded programs are giving rise to new businesses. Shad Lawton and Jamie Myers are just two of more than 170 New Hampshire professionals to receive energy efficiency job training through a new RGGI-funded Building Analyst program offered through Lakes Region Community College and five other locations across the state. After graduating from the program in 2009, Lawton and Myers decided to found NHNRG, a full-service energy auditing and building performance contractor, in Lisbon, New Hampshire. As a company, they have conducted more than 140 energy audits and performed more than 80 building retrofits.
According to Lawton, "The key components of the audits that we are now doing every day are taught in the building analyst course. We had a very busy year in 2010, but there is enough housing stock in the North Country alone to keep several companies busy for years to come."
Maine is investing a portion of its RGGI proceeds to implement large-scale energy efficiency projects in commercial and industrial facilities. Irving Forest Products in Dixfield, Maine and Moose River Lumber in Jackman, Maine are just two of 19 companies that received RGGI-funded grants from Efficiency Maine's Large Projects Grant Program in 2010. Together, the sawmills are investing more than $1.5 million to enhance long-term viability through energy efficiency. According to Susan Coulombe, divisional manager at Irving Forest Products, the project will enable the Dixfield sawmill to produce 25 percent of its electricity on site, saving enough money to sustain 235 jobs. Moose River Lumber anticipates adding at least three jobs while retaining the 66 full-time and 5 part-time workers currently employed.
Similarly, Maryland is investing RGGI proceeds to help the state's farmers control their energy budgets. Through July 2010, Maryland's Farm Energy Technical Assistance and Incentive Program helped more than 350 farmers implement electricity and fuel-focused energy efficiency projects. The program, recognized by the American Council for an Energy Efficient Economy as one of the five most outstanding energy efficiency programs in the U.S. in 2010, will save the farmers a collective total of more than $15 million in energy costs over the lifetime of the projects.
In Vermont, RGGI proceeds are invested to improve building performance and heating system efficiency, thereby creating jobs, saving Vermonters money and reducing Vermont's greenhouse gas emissions. The state's Energy Efficiency Utility combines RGGI proceeds with other funding sources to provide services that enable residents and businesses to use "unregulated" heating fuels, such as fuel oil, propane and wood, more efficiently. These fuels account for more than 80 percent of Vermont's space-heating and industrial-process heat requirements.
In New York, RGGI proceeds are a catalyst, leveraging federal, state and private investments to revitalize local economies. For example, the Village of Patchogue on Long Island used $27,000 in RGGI proceeds to identify energy efficiency opportunities as part of a proposal to upgrade its waste water treatment plant. This analysis made Patchogue eligible for $11.4 million in federal and state funds, which it received for its proposed upgrade. Once federal and state dollars were committed, Patchogue was on its way to having the infrastructure to support downtown community revitalization and attracted more than $100 million in private investments. This investment made downtown Patchogue come alive. Blighted properties are now gone. In their place are 175 market rate residential units, 125 affordable housing units and five new restaurants. "Sewers. Without them, nothing would have happened in our downtown," said Village of Patchogue Mayor Paul Pontieri.
The next RGGI CO2 auction is scheduled for June 8, 2011.
ABOUT THE REGIONAL GREENHOUSE GAS INITIATIVE
The 10 Northeast and Mid-Atlantic states participating in RGGI (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Hampshire, New York, Rhode Island and Vermont) have implemented the first market-based, mandatory cap-and-trade program in the U.S. to reduce greenhouse gas emissions. Power sector CO2 emissions are capped at 188 million short tons per year through 2014. The cap will then be reduced by 2.5 percent in each of the four years 2015 through 2018, for a total reduction of 10 percent.
A CO2 allowance represents a limited authorization to emit one short ton of CO2, as issued by a respective participating state. A regulated power plant must hold CO2 allowances equal to its emissions to demonstrate compliance at the end of each three-year control period. The first control period for fossil fuel-fired electric generators under each state's CO2 Budget Trading Program took effect on January 1, 2009 and extends through December 31, 2011. Allowances for the first (2009-2011) control period may be used to meet current compliance obligations, or may be banked for use in future control periods. CO2 allowances for the second (2012-2014) control period can only be used to meet compliance obligations beginning in 2012. CO2 allowances issued by any participating state are usable across all state programs, so that the ten individual state CO2 Budget Trading Programs, in aggregate, form one regional compliance market for CO2 emissions. For more information please visit: www.rggi.org.
The Regional Greenhouse Gas Initiative, Inc. (RGGI, Inc.) was created in September 2007 to provide technical and administrative services to the states participating in the Regional Greenhouse Gas Initiative. RGGI, Inc. is a 501(c) (3) nonprofit organization. For more information visit www.rggi.org/rggi.
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