Next Carbon Dioxide Auction on December 17 to Include All Ten RGGI States

The second auction of carbon dioxide (CO2) emissions allowances by the Regional Greenhouse Gas Initiative (RGGI) will be held December 17, and all 10 RGGI states - including Massachusetts - are expected to participate in this auction and offer more than 31.5 million allowances for sale. The Commonwealth will be offering more than 4.3 million allowances for sale that day.

The second auction follows the successful first-in-the-nation auction in September when Massachusetts and five other RGGI states sold 12.5 million allowances at a clearing price of $3.07 per allowance. That sale resulted in proceeds of $38,575,783 for Massachusetts, Connecticut, Maine, Maryland, Rhode Island and Vermont.

The Commonwealth will use its share of $13.3 million from the first auction to help fund energy efficiency programs administered by electric and natural gas utilities, start-up of the new Green Communities program that will include renewable energy efforts, and fund additional efficiency programs to tackle the expected high winter energy costs.

"We will use these funds to help municipalities find greener solutions to their energy challenges, and help consumers reduce their energy bills," said Governor Deval Patrick following the first RGGI auction. "With a difficult winter ahead, we expect to put these resources to work immediately."

The Green Communities Act signed by the Governor in July allows RGGI auction proceeds to be used to fund the Green Communities program of incentives and assistance for municipalities to adopt energy efficiency and renewable energy measures, to support energy efficiency, conservation and demand response programs, and to reimburse the Commonwealth for administrative costs associated with the RGGI program.

Gov. Patrick announced that $3.5 million of the RGGI proceeds will be used for 2008 utility-administered energy efficiency programs, $5 million will be allocated for the start-up of the Green Communities program, $4.3 million will be used for additional energy efficiency efforts to combat high winter energy costs, and $500,000 will be allocated for administrative and vendor costs associated with the state's participation in RGGI.

State environmental officials - Energy and Environmental Affairs Secretary Ian Bowles, MassDEP Commissioner Laurie Burt and Department of Energy Resources Commissioner Phil Guidice - said they were pleased with the results of the first RGGI auction, adding that RGGI's success shows that auctioning all or most CO2 allowances can work well as part of a market-based program and it can serve as a model for a federal cap-and-trade program.

Massachusetts is one of 10 Northeast and Mid-Atlantic states pioneering the first mandatory cap-and-trade program to reduce greenhouse gas emissions in the United States. The states have committed to cap and then reduce the amount of CO2 that power plants in their region are allowed to emit, limiting the region's total contribution to atmospheric greenhouse gas levels.

After the 10 RGGI states have stabilized power sector carbon emissions at their capped level by 2014, the cap will be reduced by 2.5 percent each year from 2015 through 2018, resulting in a 10 percent reduction overall.

RGGI intends to hold quarterly auctions during the first RGGI three-year compliance period, commencing January 1, 2009 to December 31, 2011.

The 10 states participating in RGGI are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Hampshire, New York, Rhode Island and Vermont.

For more information about RGGI and the CO2 auctions, turn to: www.mass.gov/dep/air/climate/index.htm#rggi or www.rggi.org

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