Monday, September 29, 2008

1st RGGI CO2 Auction Brings Clearing Price of $3.07

AAEA's price for allowances is $20.00 per ton at our Green Carbon Bank and Carbon Mercantile Exchange.

The states participating in the Regional Greenhouse Gas Initiative (RGGI) announced that all of the 12,565,387 allowances offered for sale on September 25, 2008 were sold at a clearing price of $ 3.07 per allowance. RGGI, Inc. reported that 59 participants from the energy, financial and environmental sectors took part in the first-in-the-nation auction, indicating a strong start in the first of many CO2 allowance auctions. The demand for the allowances appeared to have been very strong with a total of quantity of 51,761,000 allowances demanded which was four times available supply for this first auction. The $ 38,575,783 in proceeds produced from the auction will be distributed to Connecticut, Maine, Maryland, Massachusetts, Rhode Island and Vermont, the six RGGI states that offered allowances for sale during the first auction. The states are investing those funds in energy efficiency and renewable energy technologies, and programs to benefit energy consumers.

The RGGI auction was administered by World Energy Solutions, Inc (TSX: XWE), which operates online exchanges for energy and green commodities. World Energy Solutions concluded that the software executed the auction seamlessly, the process ran as expected and there were no issues that affected the ability of bidders to participate. The RGGI auction was overseen by RGGI, Inc.’s independent market monitor, Potomac Economics, a leader in the field of monitoring and competitive assessment of wholesale electricity markets in the U.S. Potomac Economics also serves as the Independent Market Monitor for the Midwest ISO and ERCOT, as the Independent Market Advisor for the New York ISO, and as the Independent Market Monitoring Unit for ISO New England. Any CO2 allowances purchased at the first auction can be used by a regulated facility for compliance in any of the RGGI states, even if that state did not offer allowances in the first auction.

The next allowance auction is set for December 17, 2008. These early auctions, combined with the others being held in the first compliance period, will ensure an ample opportunity for bidders to obtain the allowances they will need for compliance across the entire 10-state region. RGGI intends to hold quarterly auctions during the first RGGI three-year compliance period, which will be from January 1, 2009 to December 31, 2011.

Under the RGGI process, the then participating states will stabilize power sector CO2 emissions at the capped level 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. The ten states participating in RGGI are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Hampshire, New York, Rhode Island and Vermont.
For more information about RGGI, turn to:

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