N.J. Admin. Code § 7:27C-5.2

Current through Register Vol. 56, No. 21, November 4, 2024

Section 7:27C-5.2 - CO[2] allowance allocations

(a) The Department will allocate CO[2] allowances representing 100 percent of the tons for each allocation year from the New Jersey CO[2] Budget Trading Program base budget set forth in N.J.A.C. 7:27C-5.1 to a consumer benefit account, less those allowances set aside each allocation year pursuant to (b) and (c) below.

(b) The Department will allocate CO[2] allowances to a fixed-price contract set-aside account for each allocation year from the New Jersey CO[2] Budget Trading Program base budget set forth in N.J.A.C. 7:27C-5.1 in an amount sufficient to provide allowances at a fixed price of $ 2.00 per ton to all eligible facilities, as provided at N.J.A.C. 7:27C-5.5.

(c) The Department will allocate CO[2] allowances to a cogeneration set-aside account for each allocation year from the New Jersey CO[2] Budget Trading Program base budget set forth in N.J.A.C. 7:27C-5.1in an amount sufficient to provide allowances equivalent to the projected compliance adjustment for a cogeneration unit, as provided at N.J.A.C. 7:27C-5.3.

(d) The Department will distribute allowances from the consumer benefit account in accordance with N.J.A.C. 7:27C-5.3, 5.4, 5.5, and 11.13(b).

(e) For the allocation year 2021 and each succeeding allocation year, the New Jersey CO[2] Budget Trading Program adjusted budget will be the maximum number of allowances available for allocation in a given allocation year, except for CO[2] offset allowances and CCR allowances. In any year in which the budget is not adjusted, the "adjusted budget" will equal the base budget.

(f) The Department will allocate CCR allowances, separate from and in addition to the New Jersey CO[2] Budget Trading Program base budget set forth in N.J.A.C. 7:27C-5.1, to the consumer benefit account, in order to contain the cost of CO[2] allowances. The Department will allocate CCR allowances in the following manner:

1. The Department will initially allocate CCR allowances for calendar year 2020 in an amount equal to 10 percent of the New Jersey CO[2] Trading Program base budget for 2020 set forth at N.J.A.C. 7:27C-5.1(a)1; and

2. On or before January 1, 2021, and on or before January 1 of each calendar year thereafter, the Department will allocate current vintage year CCR allowances equal to 10 percent of the New Jersey CO[2] Trading Program base budget for the calendar year and withdraw the number of CCR allowances that remain in the consumer benefit account at the end of the prior calendar year.

(g) The Department will convert and transfer any CO[2] allowances that have been withheld from any auctions into the New Jersey ECR Account, in order to provide additional emissions reductions in the event of lower-than-anticipated emissions reduction costs. The Department will withhold ECR allowances in the following manner:

1. If the condition in N.J.A.C. 7:27C-9.1(d)1is met at an auction, then the maximum number of ECR allowances that will be withheld from that auction will be equal to 10 percent of the New Jersey CO[2] Budget Trading Program base budget for that calendar year, minus the total quantity of ECR allowances that have been withheld from any prior auctions in that calendar year. Any ECR allowances withheld from an auction will be transferred into the New Jersey ECR Account; and

2. The Department will not withdraw any allowances that have been transferred into the New Jersey ECR account.

(h) On or before March 15, 2021, the Department will 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 = The third adjustment for banked allowances quantity in tons;

TA (third adjustment) = The total quantity of allowances of vintage years prior to 2021 held in general and compliance accounts, including compliance accounts established pursuant to the CO[2] Budget Trading Program, but not including accounts opened by participating states, as reflected in COATS on March 15, 2021;

TAE (third adjustment emissions) = The total quantity of 2018, 2019, and 2020 emissions from all CO[2] Budget sources in all participating states, reported pursuant to the COBudget Trading Program as reflected in COATS on March 15, 2021; and

RS% = New Jersey's 2021 budget divided by the 2021 regional budget.

(i) On or before April 15, 2021, the Department will establish the New Jersey CO[2] Budget Trading Program adjusted budgets for the 2021 through 2025 allocation years by the following formula:

AB = BB - TABA

Where:

AB = The New Jersey CO[2] Budget Trading Program adjusted budget;

BB = The New Jersey CO[2] Budget Trading Program base budget; and

TABA = The third adjustment for banked allowances quantity in tons.

(j) After making the determinations in (i) above, the Department will publish the CO[2] Budget Trading Program adjusted budgets for the 2021 through 2025 allocation years.

N.J. Admin. Code § 7:27C-5.2

Adopted by 51 N.J.R. 992(a), effective 6/17/2019