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RGGI CO2 Auction Yields $83M for Energy, Job Investments
The 10 states 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 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 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: http://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.
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, Maine is investing a portion of its 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 onsite, 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 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 United States 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, proceeds are invested to improve building performance and heating system efficiency. 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, 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 wastewater 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. The community now has 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.
RGGI-funded programs are also 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, N.H. 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."
The next RGGI CO2 auction is scheduled for June 8.