California Code of Regulations
Title 17 - Public Health
Division 3 - Air Resources
Chapter 1 - Air Resources Board
Subchapter 10 - Climate Change
Article 5 - California Cap on Greenhouse Gas Emissions and Market-Based Compliance Mechanisms
Subarticle 8 - Disposition of Allowances
Section 95870 - Disposition of Vintage 2013-2020 Allowances

(a) Allowance Price Containment Reserve. Upon creation of the Allowance Price Containment Reserve Account, the Executive Officer shall transfer allowances to the Allowance Price Containment Reserve, as follows:

(b) Advance Auction. Upon creation of the Auction Holding Account, the Executive Officer shall transfer 10 percent of the allowances from budget years 2015-2020 to the Auction Holding Account.

(c) Upon creation of the Voluntary Renewable Electricity Reserve Account, the Executive Officer shall transfer allowances to the Voluntary Renewable Electricity Reserve Account, as follows:

(d) Electricity Related Allocation.

(e) Allocation to Industrial Covered Entities. Allowances allocated for the purposes of industry assistance shall be transferred to annual allocation holding accounts for industrial sectors listed in Table 8-1. Allowances in the annual allocation holding account are transferred to the Holding Account on January 1 of the vintage year of the allowances.

(f) Allocation to University Covered Entities and Public Service Facilities. The Executive Officer will place an annual individual allocation in the annual allocation holding account of each eligible university covered entity and public service facility by October 24 of each calendar year from 2015-2019 for allocations from 2016-2020 annual allowance budgets. A public service facility providing steam to a publicly owned educational facility is not eligible for any allocation of allowances provided under other provisions of this regulation. In the event a publicly owned educational facility that receives qualified thermal output from a public service facility becomes an opt-in covered entity and receives allowances for the emissions from qualified thermal output sold to the university by the public service facility pursuant to section 95891(d), the publicly owned educational facility shall unconditionally transfer to the public service facility allowances relating to the qualified thermal output provided by such public service facility. So long as the publicly owned educational facility remains an opt-in covered entity and provides such allowances to the public service facility, such public service facility will not be eligible for any disposition of allowances provided under this section.

(g) Allocation to Legacy Contract Generators. Allowances will be allocated to legacy contract generators with an industrial counterparty pursuant to section 95894 for the term of the contract. The Executive Officer will transfer allowance allocations into each eligible generator's annual allocation holding account by October 24 of each calendar year for eligible legacy contract emissions pursuant to the methodology set forth in section 95894.

(h) Natural Gas Supplier Sector Allocation. Allowances available for allocation to natural gas suppliers each budget year shall be calculated as set forth in section 95893. The Executive Officer will transfer allowances into each eligible natural gas supplier's allowance allocation holding account and/or limited use holding account pursuant to sections 95893(b) and 95831(a)(6) by October 24 of each calendar year from 2014 through 2019 for allocations from 2015 through 2020 annual allowance budgets.

(i) Auction Proceeds for AB 32 Statutory Objectives. All remaining allowances not allocated for uses specified in sections 95870(a) through (h), section 95870(j), or section 95911(h) will be designated for sale at auction. The proceeds from the sale of these allowances will be deposited into the Greenhouse Gas Reduction Fund created pursuant to Government Code section 16428.8, and will be available for appropriation by the Legislature for the purposes designated in California Health and Safety Code sections 38500 et seq. and consistent with the requirements of Chapter 4.1 (commencing with Section 39710) of Part 2 of Division 26 of the California Health and Safety Code and Article 9.7 (commencing with Section 16428.8) of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code.

(j) Allocation to Waste-to-Energy Facilities. Vintage 2020 allowances available for allocation to waste-to-energy facilities shall be calculated as set forth in section 95891(f)(1). The Executive Officer will place vintage 2020 allowances in the annual allocation holding account of each eligible waste-to-energy facility by October 24, 2019. An amount of vintage 2020 true-up allowances will be placed in the annual allocation holding account of each eligible waste-to-energy facility by October 24, 2019 to account for 2018 and 2019 emissions.

Table 8-1: Assistance Factors and Covered Industrial Sectors