Code of Massachusetts Regulations
225 CMR - DEPARTMENT OF ENERGY RESOURCES
Title 225 CMR 13.00 - Doer Co[2] Budget Trading Program Auction Regulation
Section 13.06 - CO[2] Allowance Auction Procedures

Universal Citation: 225 MA Code of Regs 225.13

Current through Register 1531, September 27, 2024

(1) The implementation of any auction conducted pursuant to 225 CMR 13.00 may be transferred by DOER to an agent deemed qualified by DOER to conduct such auction, provided that such agent shall perform all such duties under the direction and oversight of DOER.

(2) The auction format shall be a Sealed Bid, Uniform Price Auction.

(3) Prior to the end of each Control Period or Interim Control Period, CO2 allowances in a quantity equal to the number of CO2 Allowances allocated to the Auction Account for such Control Period will be available for sale. Such CO2 allowances will be available for sale by allocation year. DOER may require that allowances are sold in minimum lot sizes. In such event, such lot sizes shall be published in the Auction Notice pursuant to 225 CMR 13.07(1). No more than 50% of the allowances from an allocation year may be available for sale in advance of the respective allocation year, up to four years in advance of such allocation year.

(4) DOER shall post a calendar of proposed auction dates on the CO2 Allowance Auction Website. The calendar shall include the auction format and the number of allowances and allocation years of allowances to be auctioned at each auction. DOER may periodically modify the contents of the calendar, provided that the information relevant to the next scheduled auction shall be fixed no later than 45 calendar days prior to such auction, consistent with 225 CMR 13.06(1).

(5) Auctions of CO2 allowances shall be held with a reserve price. DOER is not obligated to sell CO2 allowances if the reserve price is not met.

(6) Auctions of CO2 Allowances shall include a Cost Containment Reserve and a CCR Trigger price. CO2 CCR allowances shall only be sold at an auction in which total demand for allowances, above the CCR trigger price, exceeds the number of CO2 allowances available for purchase at the auction, not including any CCR allowances.

(7) Auctions of CO2 Allowances shall include an Emissions Containment Reserve and an ECR Trigger price shown in 225 CMR 13.03: Table 2. Starting in calendar year 2021 and each year thereafter, CO2 allowances shall be withheld from sale at an auction in accordance with the following:

(a) CO2 allowances shall be withheld from an auction if the demand for allowances would result in an auction clearing price that is less than the ECR trigger price shown in 225 CMR 13.03: Table 2.

(b) If the CO2 ECR trigger price is met, then the maximum quantity of CO2 allowances that may be withheld from that auction will be equal to the quantity shown in 225 CMR 13.06(7): Table 4, minus the total quantity of CO2 allowances that have been withheld from any prior auction in that calendar year.

Table 4. ECR Allowance Quantities

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030 and thereafter

1,194,436

1,158,240

1,122,045

1,085,850

1,049,655

1,013,460

977,265

941,070

904,875

868,680

(c) CO2 allowances withheld from the auction because the ECR trigger price was met shall not be resold in any future auction.

(8) No bidder, including any affiliate or agent of such bidder, shall purchase more than 25% of the allowances offered for sale in any one auction. Such limitation shall not be increased by CCR allowances, and shall be published in the Auction Notice pursuant to 225 CMR 13.07.

(9) DOER may periodically evaluate the auction program performance and may retire any previous allocation year allowances that were offered for sale by auction but were not sold and still remain in the Massachusetts Auction Account.

(10) Proceeds of such auctions shall be deposited into a special revenue account established on the books of the Commonwealth for such purpose, and shall thereafter be available for expenditure by DOER subject to the approval of the Secretary of the Executive Office of Energy and Environmental Affairs. The proceeds of the auctions shall be used:

(a) to reimburse a municipality in which the property tax receipts from an electric generating station are reduced, as set forth in M.G.L. c. 21A, § 22(c)(1)(i);

(b) to fund the green communities program established in M.G.L. c. 25A, § 10;

(c) to provide zero interest loans to municipalities, which are not green communities under M.G.L. 25A, § 10, for energy efficiency projects;

(d) to promote energy efficiency, conservation and demand response; and

(e) to reimburse the commonwealth for costs associated with the administration of the cap and trade program.

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