06-096-156 Me. Code R. § 2

Current through 2024-51, December 18, 2024

Section 096-156-2 - CO[2] Allowance Allocation Provisions

A.Maine CO₂Budget Trading Program Base Budget

(1) For 2018 the Maine CO₂ budget trading program base budget is 2,961,611 tons.

(2) For 2019 the Maine CO₂ budget trading program base budget is 2,887,571 tons.

(3) For 2020 the Maine CO₂ budget trading program base budget is 2,815,382 tons.

(4) For 2021 the Maine CO₂ budget trading program base budget is 2,733,450 tons.

(5) For 2022 the Maine CO₂ budget trading program base budget is 2,651,519 tons.

(6) For 2023 the Maine CO₂ budget trading program base budget is 2,569,587 tons.

(7) For 2024 the Maine CO₂ budget trading program base budget is 2,487,656 tons.

(8) For 2025 the Maine CO₂ budget trading program base budget is 2,405,725 tons.

(9) For 2026 the Maine CO₂ budget trading program base budget is 2,323,794 tons.

(10) For 2027 the Maine CO₂ budget trading program base budget is 2,241,862 tons.

(11) For 2028 the Maine CO₂ budget trading program base budget is 2,159,931 tons.

(12) For 2029 the Maine CO₂ budget trading program base budget is 2,078,000 tons.

(13) For 2030 the Maine CO₂ budget trading program base budget is 1,996,069 tons.

B. CO₂ Allowance Allocations .

(1) CO₂ Allowances available for allocation. For allocation year 2018 and each year thereafter, the CO₂ Budget Trading Program adjusted budget shall be the maximum number of allowances available for allocation in a given allocation year, except for CO₂ offset allowances and CO₂ CCR allowances. In any year in which there is no adjusted budget, the adjusted budget shall equal the base budget.

(2) Cost Containment Reserve (CCR) allocation. The Department shall allocate CO₂ CCR allowances, separate from and additional to the CO₂ Budget Trading Program base budget set forth in subsection 2(A) of this Chapter, to the auction account. The CCR allocation is for the purpose of containing the cost of CO₂ allowances. The Department shall allocate CO₂ CCR allowances in the following manner:

(a) The Department shall initially allocate 180,069 CO₂ CCR allowances for calendar year 2014.

(b) On or before January 1, 2015 and each calendar year thereafter through 2020, the Department shall allocate CO₂ CCR allowances in an amount equal to 360,137 minus the number of CO₂ CCR allowances that remain in the auction account at the end of the prior calendar year.

(c) On or before January 1, 2021, the Department shall allocate CO₂ CCR allowances in an amount equal to 273,345 minus the number of CO₂ CCR allowances that remain in the auction account at the end of the calendar year 2020.

(d) On or before January 1, 2022, the Department shall allocate CO₂ CCR allowances in an amount equal to 265,152 minus the number of CO₂ CCR allowances that remain in the auction account at the end of the calendar year 2021.

(e) On or before January 1, 2023, the Department shall allocate CO₂ CCR allowances in an amount equal to 256,959 minus the number of CO₂ CCR allowances that remain in the auction account at the end of the calendar year 2022.

(f) On or before January 1, 2024, the Department shall allocate CO₂ CCR allowances in an amount equal to 248,766 minus the number of CO₂ CCR allowances that remain in the auction account at the end of the calendar year 2023.

(g) On or before January 1, 2025, the Department shall allocate CO₂ CCR allowances in an amount equal to 240,573 minus the number of CO₂ CCR allowances that remain in the auction account at the end of the calendar year 2024.

(h) On or before January 1, 2026, the Department shall allocate CO₂ CCR allowances in an amount equal to 232,379 minus the number of CO₂ CCR allowances that remain in the auction account at the end of the calendar year 2025.

(i) On or before January 1, 2027, the Department shall allocate CO₂ CCR allowances in an amount equal to 224,186 minus the number of CO₂ CCR allowances that remain in the auction account at the end of the calendar year 2026.

(j) On or before January 1, 2028, the Department shall allocate CO₂ CCR allowances in an amount equal to 215,993 minus the number of CO₂ CCR allowances that remain in the auction account at the end of the calendar year 2027.

(k) On or before January 1, 2029, the Department shall allocate CO₂ CCR allowances in an amount equal to 207,800 minus the number of CO₂ CCR allowances that remain in the auction account at the end of the calendar year 2028.

(l) On or before January 1, 2030, and each year thereafter, the Department shall allocate CO₂ CCR allowances in an amount equal to 196,607 minus the number of CO₂ CCR allowances that remain in the auction account at the end of the previous calendar year.

(3) First control period interim adjustment for banked allowances.By January 15, 2014, the Department shall determine the first control period interim adjustment for banked allowances quantity for allocation years 2014 through 2020 by the following formula:

FCPIABA = (FCPA/7) x RS%

Where:

FCPIABA is the first control period interim adjustment for banked allowances quantity in tons.

FCPA, the first control period adjustment, is the total quantity of allocation year 2009, 2010 and 2011 CO₂ allowances held in general and compliance accounts, including compliance accounts established pursuant to the CO₂ Budget Trading Program, but not including accounts opened by participating states, as reflected in the CO₂ Allowance Tracking System (COATS) on January 1, 2014.

RS% is Maine's 2013 Budget divided by the 2013 Regional Budget.

(4) Second control period interim adjustment for banked allowances. On March 17, 2014, the Department shall determine the second control period interim adjustment for banked allowances quantity the allocation years 2015 through 2020 by the following formula:

SCPIABA = ((SCPA - SCPE)/6) x RS%

Where:

SCPIABA is the second control period interim adjustment for banked allowances quantity in tons.

SCPA, second control period adjustment, is the total quantity of allocation year 2012 and 2013 CO₂ allowances held in general and compliance accounts, including compliance accounts established pursuant to the CO₂ Budget Trading Program, but not including accounts opened by participating states, as reflected in the CO₂ Allowance Tracking System (COATS) on March 17, 2014.

SCPE, second control period emissions, is the total quantity of 2012 and 2013 emissions from all CO₂ budget sources in all participating states, reported pursuant to CO₂ Budget Trading Program as reflected in the CO₂ Allowance Tracking System (COATS) on March 17, 2014.

RS% is Maine's 2013 Budget divided by the 2013 Regional Budget.

(5) Third adjustment for banked allowances. On March 15, 2021, the Department shall determine the third adjustment for banked allowances quantity for allocation years 2021 through 2025 through the application of the following formula:

TABA = (TA - TAE)/5 X RS%

Where:

TABA is the third adjustment for banked allowances quantity in tons;

TA, third adjustment, is the total quantity of allowances of vintage years prior to 2021 held in general and compliance accounts, including compliance accounts established pursuant to the CO₂ Budget Trading Program, but not including accounts opened by participating states, as reflected in the CO₂ Allowance Tracking System on March 15, 2021;

TAE, third adjustment emissions, is the total quantity of 2018, 2019 and 2020 emissions from all CO₂ budget sources in all participating states, reported pursuant to CO₂ Budget Trading Program as reflected in the CO₂ Allowance Tracking System, for which compliance has not yet been demonstrated, on March 15, 2021; and RS% is Maine's 2021 budget divided by the 2021 regional budget.

C.CO₂ Budget Trading Program Adjusted Budget 2014. The Department shall determine the CO₂ Budget Trading Program adjusted budget for the 2014 allocation year by the following formula:

AB = BB - FCPIABA

Where:

AB is the CO₂ Budget Trading Program 2014 adjusted budget.

BB is the CO₂ Budget Trading Program 2014 base budget.

FCPIABA is the first control period interim adjustment for banked allowances quantity.

D.CO₂ Budget Trading Program Adjusted Budgets for 2015 through 2020. On April 15, 2014 the Department shall determine the CO₂ Budget Trading Program adjusted budgets for the 2015 through 2020 allocation years by the following formula:

AB = BB - (FCPIABA + SCPIABA)

Where:

AB is the CO₂ Budget Trading Program adjusted budget.

BB is the CO₂ Budget Trading Program base budget.

FCPIABA is the first control period interim adjustment for banked allowances.

SCPIABA is the second control interim adjustment for banked allowances.

E. CO₂ Budget Trading Program Adjusted Budgets for 2021 through 2025. On or before April 15, 2021, the Department shall establish the Maine CO₂ Budget Trading Program adjusted budgets for the 2021 through 2025 allocation years by the following formula:

AB = BB - TABA Where:

AB is the Maine CO₂ Budget Trading Program adjusted budget;

BB is the Maine CO₂ Budget Trading Program base budget; and TABA is the third adjustment for banked allowances quantity in tons.

F. Publishing the CO₂ Trading Program Adjusted Budgets. After making the determinations in subsections 2(C) through (E) of this Chapter, the Department or its Agent will publish the CO₂ Trading Program Adjusted Budgets for the 2014 through 2025 allocation years.

G. Consumer benefit account allocation. The Department will allocate one hundred percent (100%) of Maine's CO₂ Budget Trading Program base budget to the consumer benefit account. A portion of the CO₂ allowances held in the consumer benefit account will be transferred to an integrated manufacturing facility pre-retirement account and handled as described in subsections 2(G)(1), (2), and (3) below. A portion, not to exceed 2% of the CO₂ Budget Trading Program base budget, of the CO₂ allowances held in the consumer benefit account will be transferred to a voluntary renewable energy set-aside account and handled as described in subsection 2(G)(4) below. CO₂ allowances remaining in the consumer benefit account will be auctioned for sale by the Department or its agent.

(1) Incentive for CO₂ budget units that are combined heat and power units at integrated manufacturing facilities. Annually, the Department will transfer a portion of the CO₂ allowances allocated to the consumer benefit account to an integrated manufacturing facility pre-retirement account. Such CO₂ allowances are intended to promote and reward the operation of CO₂ budget units that are combined heat and power units at integrated manufacturing facilities by using the CO₂ allowances to offset the behind-the-meter CO₂ emissions. The methods by which the number of CO₂ allowances will be distributed are described in subsections 2(G) (2), (3), and (4) of this Chapter.

(2) Reservation of CO₂ allowances for integrated manufacturing facilities. Integrated manufacturing facilities will be responsible for submitting and the Department will be responsible for approving projections of each CO₂ budget unit's anticipated behind-the-meter CO₂ emissions. The number of CO₂ allowances equal to the total approved projected amount of behind-the-meter CO₂ emissions from the CO₂ budget units will be transferred from the consumer benefit account to the integrated manufacturing facility pre-retirement account.

(3) Balancing of the integrated manufacturing facility pre-retirement account. Each calendar year the Department will compare the number of CO₂ allowances held in the integrated manufacturing facility pre-retirement account with the total actual reported behind-the-meter CO₂ emissions from each integrated manufacturing facility. If there are fewer CO₂ allowances held in the integrated manufacturing facility pre-retirement account than needed, additional CO₂ allowances will be added to the next year's predicted number of CO₂ allowances and transferred into the integrated manufacturing facility pre-retirement account to balance the account. If there are more CO₂ allowances held in the integrated manufacturing facility pre-retirement account than needed, only as many CO₂ allowances will be transferred from next year's consumer benefit account as needed to cover future behind-the-meter CO₂ emissions.

(4) Voluntary renewable energy purchases. The Department will set aside and permanently retire CO₂ allowances to promote and reward the voluntary purchase by consumers in Maine of renewable energy credits generated from within any participating state. The handling of such CO₂ allowances shall be accomplished by the Department as follows:

(a) The Department shall transfer up to 2% of the CO₂ Budget Trading Program base budget from each year of the control period from the consumer benefit account into the voluntary renewable energy set-aside account.

(b) The Department shall permanently retire the number of CO₂ allowances equal to the amount of avoided CO₂ emissions from the previous calendar year, determined using the following equation, subject to the limitations in subparagraph (c) and requirements of subparagraphs (d) and (e) of this subsection:

n AE = [SIGMA] (MWH_REC)_i x (MER)/2000 i=1

Where AE = the amount of avoided CO₂ emissions (in tons rounded to the nearest whole ton). MWH_REC = the number of renewable energy credits (RECs) voluntarily purchased by Maine consumers during each calendar year (in equivalent MWh on a state-by-state basis), which have been generated within a participating state. MER = the most recently published annual average marginal emission rate (in lbs of CO₂ per MWh) as reported by the corresponding participating state's regional transmission organization.

i = each participating state from which RECs were purchased by Maine consumers.

(c) If the total amount of avoided CO₂ emissions calculated pursuant to subparagraph (b) of this subsection exceeds the number of CO₂ allowances held in the voluntary renewable energy set-aside account for an associated vintage year, then the number of CO₂ allowances to be retired shall be equal to the total number of CO₂ allowances contained in the voluntary renewable energy set-aside account for that particular vintage year.

(d) If the total amount of avoided CO₂ emissions calculated pursuant to subparagraph (b) of this subsection is less than the number of CO₂ allowances held in the voluntary renewable energy set-aside account for an associated vintage year, then the number of CO₂ allowances in an amount equal to the calculated avoided CO₂ emissions shall be retired and any excess CO₂ allowances shall be transferred back into the consumer benefit account and offered for sale at auction.

(e) The Department shall retire the number of CO₂ allowances determined pursuant to subparagraphs (c) and (d) of this subsection by transferring them into the voluntary renewable energy retirement account.

(f) Data for the amount of renewable energy credits voluntarily purchased by Maine consumers and required for the equation specified in subparagraph (b) of this subsection will be obtained from renewable energy credit tracking systems associated with the regional transmission organizations operating in the states where the credits were generated. For credits that originate in areas with no credit tracking system, verifiable evidence of purchases by Maine consumers of renewable energy credits will be obtained from the entity that oversees the electricity transmission system in that area. Renewable energy credit data must be verifiable and document the following information:

(i) Number of renewable energy credits, in MWh, purchased by retail consumers, by customer class in Maine, during the previous calendar year;

(ii) Documentation that the renewable energy credits were procured by the retail provider;

(iii) State where the renewable energy credits were generated;

(iv) Time period when the renewable energy credits were generated;

(v) Any additional information required by the Department necessary to demonstrate that such renewable energy credit purchase is eligible in Maine and not being credited in more than one participating state and is not being credited toward any renewable portfolio standard; and

(vi) Annual average marginal CO₂ emission rate for electricity generation, in pounds CO₂/MWh, as most recently reported by the regional transmission organization or the entity that oversees electricity transmission in areas with no RTO.

(5) Public notice of the number of CO₂ allowances to be auctioned. Each calendar year the Department or its agent will make public the number of CO₂ allowances that are planned to be auctioned in the coming year and the number of CO₂ allowances that are planned to be transferred to the integrated manufacturing facility pre-retirement account.

(6) Serial numbers for allocated CO₂ allowances. When allocating CO₂ allowances to and recording them in an account, the Department or its agent will assign each CO₂ allowance a unique identification number that will include digits identifying the year for which the CO₂ allowance is allocated.

H.Auction of CO₂ CCR Allowances .

(1) Purpose. The following rules shall apply to each CO₂ allowance auction. The Department or its agent may specify additional information in the auction notice for each auction. Such additional information may include the time and location of the auction, auction rules, registration deadlines and any additional information deemed necessary or useful.

(2) General requirements

(a) The Department or its agent shall include the following information in the auction notice for each auction:

(i) The number of CO₂ allowances offered for sale at the auction, not including any CO₂ CCR allowances;

(ii) The number of CO₂ CCR allowances that will be offered for sale at the auction if the condition of subsection 2(H)(2)(b)(i) of this Chapter is met;

(iii) The minimum reserve price for the auction; and

(iv) The CCR trigger price for the auction.

(b) The Department or its agent shall follow these rules for the sale of CO₂ CCR allowances:

(i) 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 CO₂ CCR allowances.

(ii) If the condition of subsection 2(H)(2)(b)(i) of this Chapter is met at an auction, then the number of CO₂ CCR allowances offered for sale by the Department or its agent at the auction shall be equal to the number of CO₂ CCR allowances in the auction account at the time of the auction.

(iii) After all of the CO₂ CCR allowances in the auction account have been sold in a given calendar year, no additional CO₂ CCR allowances will be sold at any auction for the remainder of that calendar year, even if the condition of subsection 2(H)(2)(b)(i) of this Chapter is met at an auction.

(iv) At an auction in which CO₂ CCR allowances are sold, the reserve price for the auction shall be the CCR trigger price.

(v) If the condition of subsection 2(H)(2)(b)(i) of this Chapter is not satisfied, no CO₂ CCR allowances shall be offered for sale at the auction, and the reserve price for the auction shall be equal to the minimum reserve prices.

(c) The Department or its agent shall implement the reserve price in the following manner:

(i) No allowances shall be sold at any auction for a price below the reserve price for that auction; and

(ii) If the total demand for the allowances at an auction is less than or equal to the total number of allowances made available for sale in that auction, then the auction clearing price for the auction shall be the reserve price.

I.Undistributed and Unsold CO₂ Allowances .

(1) The Department may retire undistributed CO₂ allowances at the end of each control period.

(2) The Department may retire unsold CO₂ allowances at the end of each control period.

06-096 C.M.R. ch. 156, § 2