DNREC Acting Secretary David S. Small announced that Delaware will receive $2.88 million from the state’s second successful participation in a Regional Greenhouse Gas Initiative (RGGI) auction of carbon dioxide (CO2) emissions allowances held Wednesday, March 18.


DNREC Acting Secretary David S. Small announced that Delaware will receive $2.88 million from the state’s second successful participation in a Regional Greenhouse Gas Initiative (RGGI) auction of carbon dioxide (CO2) emissions allowances held Wednesday, March 18.

All of Delaware’s 763,842 allowances for the 2009 vintage were sold at a clearing price of $3.51 per allowance. In a parallel offering, Delaware sold 66,698 allowances for $3.05 per allowance for the second three-year control period beginning in 2012. The 2012 vintage offering provides power plants and other entities that must comply with Delaware regulations the first-look at future market prices for RGGI CO2 allowances.

In legislation passed last year by the Delaware General Assembly, approximately $1.87 million or 65 percent of the auction proceeds will be directed to the new Sustainable Energy Utility, the non-profit entity tasked to provide energy efficiency and renewable energy programs for households and businesses. A total of 15 percent of auction proceeds will be directed to low-income consumers, through programs administered by the Department of Health and Social Services. Up to 10 percent will be used for greenhouse gas reduction projects in Delaware and the remaining 10 percent may be used to administer RGGI and climate change programs in DNREC.

“We’re pleased with the results of the auction and the prospect that we can now help Delawareans with energy efficiency improvements that will help our environment and customers’ electric bills,” said DNREC Acting Secretary David A. Small. 

RGGI Inc. reported all of the 31,513,765 allowances offered by the 10 RGGI states for the 2009 vintage, as well as 2,175,513 allowances for the 2012 vintage, were sold. By the end of 2009, the RGGI states will have offered for sale 5 percent of the total supply of 2012 vintage allowances.
According to RGGI Inc., 50 participants from the energy, financial and environmental sectors took part in the bidding, with demand for the allowances at 2.5 times the available supply.
Delaware is one of ten Northeast states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Hampshire, New York, Rhode Island and Vermont) pioneering RGGI – the first market-based, mandatory cap-and-trade program in the U.S. to reduce greenhouse gas emissions.
The participating states adopted regulations to cap and then reduce the amount of CO2 that power plants in each state are allowed to emit, limiting the region’s total contribution of atmospheric greenhouse gas levels. Under RGGI, the 10 states will stabilize power sector carbon emissions at their capped level, and then reduce the cap by 10 percent at a rate of 2.5 percent each year between 2015 and 2018. The groundbreaking program may serve as a model for a possible federal cap-and-trade program.

Compliance obligations for fossil fuel-fired electric generators under the 10-state CO2 Budget Trading Program took effect on Jan. 1. RGGI’s participating states held two pre-compliance auctions in September and December. The RGGI participating states will hold quarterly auctions during the first RGGI three-year compliance period, Jan. 1, 2009 to Dec. 31, 2011. The next auction is scheduled for June 17.

All RGGI auctions are overseen by an independent market monitor, Potomac Economics, a leader in the field of monitoring and competitive assessment of wholesale electricity markets in the U.S. Allowance transactions are recorded on the Carbon Dioxide Allowance Tracking System (COATS) developed by Perrin Quarles Associates, which designs and builds emissions database tracking systems.

For more information on Delaware’s RGGI program, visit http://www.awm.delaware.gov/AQM/Pages/RegionalGreenhouseGasInitiative.aspx or for RGGI, Inc., or visit http://www.rggi.org.