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RGGI Auction Price Falls, Again

RGGI has announced the results (PDF) of the second quarterly auction of carbon dioxide allowances in 2010. The auction, held Wednesday, June 9th, yielded $80,465,566.78.

40,685,585 CO2 allowances for the first three-year control period (2009-2011) offered in Wednesday’s auction sold at a price of $1.88. That’s down 9% from the March 10 auction which saw current control period allowances sold at $2.07.

In the June 2009 auction, the average price was $3.23 per allowance.

The recession and the accompanying drop in power demand, has fueled the decline in prices. In addition, the Wall Street Journal reports that the low price of natural gas is affecting auction prices and a lack of support from “federal proposals for a national cap on CO2 emissions, since it likely won’t provide a premium for regional allowances that eventually would be folded into a national program.”

According to a study released by Environment Northeast, RGGI states stand to lose nearly $3 billion in revenue if the Senate climate bill sponsored by John Kerry and Joseph Lieberman, which would eliminate regional or state cap-and-trade programs in favor of a national program, becomes law.

A total of 2,137,993 CO2 allowances for the second control period (2012-2014) sold at a price of $1.86, the same price as in March.

The next RGGI auction is scheduled for September 8, 2010.

Proceeds from all the RGGI auctions now total more than $662.8 million. Overall, according to a RGGI statement, states are investing roughly 60 percent of the proceeds from RGGI CO2 allowance auctions in energy efficiency.

Across the region, RGGI says funds are also being used to install solar, wind and geothermal energy generation systems in commercial and industrial facilities and to deploy solar energy and hot water systems on homes and businesses.

Still, news came out yesterday that the New Hampshire Legislature took $3.1 million in Regional Greenhouse Gas Initiative funds to help balance the state budget.

You can learn more about how each state is investing RGGI auction proceeds here.

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