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California to auction 61.2 million emission allowances in first auction on 14 November 2012

September 17, 2012 by California Carbon

Climate Connect News, London: California Air Resource Board (ARB) has published the official notification for allocation of emission allowances in California’s cap & trade programme. The auction will be held scheduled to be held on November 14, 2012 from 10.00 AM to 1.00 PM Pacific Time (PT). During the auction 21,804,539 allowances with 2013 vintage and 39,450,000 with 2015 vintage will be offered.  The purchase limits for current auction are 40% for electric utilities, 15% for other covered and opt-in entities, and 4% for voluntary associated entities. The purchase limit percentages apply to the auction allowance supply.

California covered entities, opt-in covered entities and voluntarily associated entities are eligible to participate in the November 2012 GHG allowance auction. Prior to participating in an auction, the Primary Account Representative (PAR) and Alternate Account Representative must be approved as users in the Compliance Instrument Tracking System Service (CITSS), and the entity must have an entity account in the CITSS.

Auction will be conducted using an electronic, internet-based Auction Platform that bidders use to submit their bid in a single-round, sealed-bid auction format.  Bid quantities can only be submitted in multiples of 1,000 California GHG allowances.  Beginning with the highest bid and proceeding to successively lower bids, entities submitting bids at each price will be awarded allowances. The settlement price for all allowances will be the lowest price at which the entire supply of allowances is exhausted or the reserve price, whichever is reached first.

For allowance auction on November 14, 2012, the ARB issued a sample sheet also showing how to fix bid guarantee of a participant, holding and purchase limits. For a participant with multiple bids, the bid value will be calculated as Bid value=Lowest bid value x Cumulative Bid Lots x 1000. The bid guarantee of each participant will be corresponding to its bid value. The number of allowances listed for the Current Auction is a minimum number and may increase as a result of additional consignments of allowances. Potential bidders will be notified of any change to the total number of allowances offered for sale, and any change will be reflected in the Auction Platform during the bidding window of the auction.

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