06-096-158 Me. Code R. § 3

Current through 2024-51, December 18, 2024

Section 096-158-3 - CO[2] Allowance Auction Provisions

A.The Consumer Benefit Account

(1) The Department will establish and administer the Consumer Benefit Account in accordance with CO₂ Budget Trading Program 06-096 CMR 156 (2)(F).

(2) CO₂ allowances allocated to the State will be held in the Consumer Benefit Account and made available for sale in CO₂ allowance auctions as described in this Chapter.

(3) The proceeds from the auctions of Maine's CO₂ allowances will be received by the Efficiency Maine Trust and deposited into the Regional Greenhouse Gas Initiative Trust Fund, in accordance with 35-A M.R.S.§10109(2).

B.Implementation and administration of CO₂ Allowance Auctions

(1) The Department or its agent will conduct auctions to sell CO₂ allowances allocated into the Consumer Benefit Account, pursuant to this Chapter.

(2) The Department will design, implement and administer CO₂ Allowance Auctions, or contract for these services, in accordance with the objectives identified in CO₂ Budget Trading Program, 06-096 CMR 156, this Chapter, and as provided by law.

(3) The Department or its agent intends to conduct or participate in any of the following, or a combination thereof:

(a) a multi-state CO₂ allowance auction or auctions;

(b) an auction or auctions coordinated with one or more participating states; or

(c) a Maine state auction.

(4) The Department or its agent intends to hold auctions at least annually; auctions may be held as often as practical and necessary to effectuate the objectives of the CO²Budget Trading Program, at the Department or its agent's discretion.

(5) Prior to the end of each control period, CO₂ allowances in a quantity equal to the number of CO₂ allowances allocated to the Consumer Benefit Account for such control period will be made available for sale.

(6) Prior to any auction, the Department or its agent may set a binding reserve price to be accepted for CO₂ allowances in such auction. The reserve price will be disclosed to prospective bidders prior to the auction.

(7) Any CO₂ allowances left unsold in any auction may be made available for sale in a subsequent auction or auctions, in quantities and in a manner determined by the Department or its agent.

(8) In conducting CO₂ allowance auctions, the Department or its agent may employ any of the following auction formats, or an auction format consisting of any or all of the components thereof:

(a) Uniform-price sealed-bid; or

(b) Ascending price, multiple-round.

(9) Notice of Auctions

(a) A notice of CO₂ allowance auction ("notice") will be published on the CO₂Allowance Auction Website or the Department website at least 45 days prior to the date upon which each auction will be conducted. Such notices may be transmitted electronically to parties requesting such notification.

(b) Each notice will provide a specific description of the auction format for each auction, including all auction participation requirements, and will include but not be limited to the following information:

(i) date and time of the auction;

(ii) location and/or electronic address of auction;

(iii) number and vintage of CO₂ allowances to be auctioned;

(iv) bid format;

(v) pre-qualification instructions and application form or electronic address of on-line application form;

(vi) the terms and conditions that will govern auction transactions;

(vii) other pertinent rules of the auction; and

(viii) identification of a Department Contact Person.

C.Participation Eligibility and Requirements

(1) The auction or auctions will be open to participation by all individuals or entities that meet the financial requirements of this subsection.

(2) Any party wishing to participate in a CO₂Allowance Auction shall first:

(a) open and maintain a compliance or general account in Maine or any other participating state pursuant to the provisions in CO₂ Budget Trading Program 06-096 CMR 156 or comparable regulations in another participating state;

(b) submit a completed application to the Department or its agent in the format and manner provided in the notice on or before the application deadline specified in the notice of CO₂ allowance auction; and

(i) Application information and forms will be made available electronically on the CO₂ allowance auction website or the Department website. As part of the application, an applicant shall provide information and documentation, as specified in the application, relating to the applicant's ability and authority to execute bids and honor contractual obligations. Information and documentation sought in the application may include but may not necessarily be limited to:

(A) information and documentation regarding the corporate identity, ownership, and capital structure of the bidder;

(B) declaration of any beneficial interest of any allowance that may be acquired through the auction;

(C) the identification of any indictment or felony conviction of the bidder, corporate officers, directors, principals or partners of the applicant; or

(D) the identification of any previous or pending investigation with respect to any alleged violation of any rule, regulation or law associated with any commodity market or exchange.

NOTE: All information and data submitted in an application will be governed by the provisions of the Freedom of Access Act, Title 1 M.R.S. Section400et seq., as amended. If an applicant believes its application contains information exempt from the definition of "public records," 1 M.R.S. §402(3), it should put the Department on notice as to that claim by conspicuously marking such documents as "claimed confidential." The Department will handle such documents in accordance with its standard operating procedures governing potentially confidential records under the Freedom of Access Act.

(ii) Failure to provide any information required by the application form may result in its being returned as incomplete. Any prospective bidder whose application is determined to be incomplete will be given a reasonable opportunity, in no event less than 10 business days, to provide additional information to cure any deficiencies.

(iii) Prospective bidders that qualify for participation under this subsection will be qualified for all subsequent CO₂ allowance auctions and may bid in such auctions, provided that such party has complied with the financial security requirements of this subsection. The Department or its agent may require applicants previously found qualified to update and re-file applications on an annual basis, or other time frame as deemed appropriate by the Department.

(iv) In order to participate in any CO₂ allowance auction, prior to that auction, a prospective bidder that has qualified under this subsection must notify the Department or its agent of its intent to participate in the upcoming auction. This notification shall include either a signed statement that there has been no change to the information provided in the bidder's application, or a revised application if changes have occurred.

(v) The Department or its agent may suspend or revoke its approval of an application if the bidder fails to comply with this Chapter and/or the provisions of CO₂ Budget Trading Program, 06-096 CMR 156. A decision under this subsection is final agency action.

(c) provide financial security in the form of a bond, cash in the form of a wire transfer or certified funds, or an irrevocable letter of credit.

(i) Bids in any auction may be limited to the level of financial security provided by the bidder.

(ii) Financial security may be forfeited to and retained by the Department or its agent in the event the bidder's offer is accepted in a CO₂ allowance auction and the bidder fails to tender payment of the full amount when due.

(iii) Bidders may request return of their financial security at any time prior to or following any CO₂ allowance auction, and the Department or its agent shall return said financial security provided that the Department or its agent has no current or pending claim to such security as a result of a failure of the bidder to comply with these regulations or to pay the full amount of its accepted bid when due.

(d) If the Department or its agent determines that a bidder has provided false or misleading information, or has withheld pertinent information in its application, or has otherwise failed to comply with any material provision of this Chapter, the bidder may be prohibited from participating in any future CO₂ allowance auctions. A decision under this subsection is a final agency action.

(e) Any applicant or bidder that has been found to have violated any rule, regulation, or law associated with any commodity market or exchange may be precluded from participation in CO₂ allowance auctions. A decision under this subsection is a final agency action.

D.Auction Bids and Transfer of Allowances

(1) All bids shall be in a form prescribed by the Department or its agent, which shall be made available electronically on the CO₂ Allowance Auction Website, as appropriate. All bids submitted will be considered binding offers for the purchase of allowances under the rules of the auction.

(2) No bidder or combination of bidders that have related beneficial interests may bid on more than 25% of the allowances available for sale in any given auction.

(3) Successful bidders must submit payment in full to the Department or its agent in accordance with the deadline specified in each Auction Notice.

(4) Upon receipt of payment the Department or its agent shall transfer or have transferred the corresponding CO₂ allowances to the successful bidder's compliance or general account in accordance with CO₂Budget Trading Program, 06-096 CMR 156 (8)(B) and (C).

(5) Within 10 days of the auction certification the Department or its agent shall publish the auction clearing price and the total number of allowances sold in such auction on the CO₂ Allowance Auction Website.

06-096 C.M.R. ch. 158, § 3