Clean Air Act; Acid Rain Provisions

ENVIRONMENTAL PROTECTION AGENCY

[FRL-5195-4]

Clean Air Act; Acid Rain Provisions

AGENCY: Environmental Protection Agency.

ACTION: Notice of the 1995 EPA SO2 allowance auctions results.

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SUMMARY: Pursuant to Title IV of the Clean Air Act and 40 CFR part 73,

the EPA is responsible for implementing a program to reduce emissions

of sulfur dioxide (SO2), a precursor of acid rain. The centerpiece

of the SO2 control program is the allocation of transferable

allowances, or authorizations to emit SO2, which are distributed

in limited quantities to existing utility units and which eventually

must be held by virtually all utility units to cover their SO2

emissions. These allowances may be transferred among polluting sources

and others, so that market forces may govern their ultimate use and

distribution, resulting in the most cost-effective sharing of the

emissions control burden. EPA is directed under section 416 of the Act

to conduct annual sales and auctions of a small portion of allowances

(2.8%) withheld from the total allowances allocated to utilities each

year. Sales and auctions are expected to stimulate and support the

allowance market and to provide a public source of allowances,

particularly to new units for which no allowances are allocated. In the

Fall of 1992, EPA delegated the administration of the EPA allowance

auctions and sales to the Chicago Board of Trade (CBOT). Today, the

Acid Rain Division is giving notice of the results of the third annual

SO2 allowance auctions that were conducted by the CBOT on March

27, 1995.

For rules governing the conduct of the auctions and sales see 40

CFR Part 73, Subpart E.

I. Offers

A. Total Allowances Available for Auction

In the spot auction (year 1995 allowances sold), a total of 58,306

allowances were offered for sale: 50,000 that were withheld from the

utilities and an additional 8,306 that were voluntarily contributed

from utilities. In the 6-year advance auction (year 2001 allowances

sold), a total of 32,000 allowances were offered for sale: 25,000 that

were unsold from the 1994 direct sale and an additional 7,000 that were

contributed from utilities. In the 7-year advance auction (year 2002

allowances sold), a total of 107,000 allowances were offered for sale:

100,000 that were withheld from the utilities and an additional 7,000

that were contributed. The minimum prices that utilities would accept

for their contributed allowances are listed in Table 1.

Table 1.--Offer Data for the 1995 Auctions

Spot Auction Offers (1995)

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Minimum price Quantity Cumulative total

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* * * *................ *600 600

$135.00................ 102 702

$140.00................ 102 804

$145.00................ 102 906

$145.00................ 600 1,506

$150.00................ 2,500 4,006

$155.00................ 2,500 6,506

$160.00................ 600 7,106

$170.00................ 600 7,706

$180.00................ 600 8,306

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*600 allowances, with offer prices equal to or less than $130.00, were

sold at $130.00.

6-Year Allowance Auction Offers (2001)

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Minimum price Quantity Cumulative total

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* * * *................ *400 400

$140.00................ 400 800

$160.00................ 400 1,200

$180.00................ 400 1,600

$199.00................ 2,000 3,600

$200.00................ 400 4,000

$299.00................ 2,000 6,000

$399.00................ 1,000 7,000

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*Three allowances, with offer prices equal to or less than $129.00, were

sold at $129.00 and 397 allowances, with offer prices equal to or less

than $128.00, were sold at $128.00.

7-Year Allowance Auction Offers (2002)

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Minimum price Quantity cumulative Total

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* * * *................ *400 400

$135.00................ *400 800

$155.00................ 400 1,200

$175.00................ 400 1,600

$195.00................ 2,000 2,000

$199.00................ 2,000 4,000

$299.00................ 1,000 6,000

$399.00................ 6,200 7,000

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*400 allowances, with offer prices equal to or less than $126.00, were

sold at $126.00.

II. Bids

A. Spot Auction Results

CBOT received 89 bids requesting 255,371 year 1995 allowances.

There were 46 successful bids and 50,600 allowances were sold (50,000

withheld and 600 contributed). Spot auction proceeds totaled

$6,676,386.

Per EPA regulations, unsuccessful bidders' names are not revealed.

Table 2.--Spot Auction Bids (1995)

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Cumulative

Bid Quantity Bidder's name total

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$350.00.... 1 New England School of Law Environmental Law Society...................... 1

$210.00.... 1 Environmental Law Students Association................................... 2

$200.00.... 1 Environmental Law Students Association................................... 3

$200.00.... 1 Thomas M. Cooley Environmental Law Society............................... 4

$200.00.... 5 University of Michigan Environmental Law Society......................... 9

$180.00.... 1 Hamline University School of Law......................................... 10

$176.00.... 1 Duke University School of the Environment................................ 11

$170.00.... 1 Hamline University School of Law......................................... 12

$170.00.... 1 Michael S. Hamilton...................................................... 13

$160.00.... 1 Pollution Retirement Center.............................................. 14

$153.00.... 1 L.J. O'Callaghan, Sr..................................................... 15

$151.00.... 21 IN.H.A.L.E./Glens Falls, NY Middle School................................ 36

$150.00.... 2 Electric Software Products/David Gloski.................................. 38

$150.00.... 2 Electric Software Products/Alexander Long................................ 40

$150.00.... 1 University of Maryland School of Law..................................... 41

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$146.00.... 5 National Healthy Air License Exchange.................................... 46

$142.00.... 10 National Healthy Air License Exchange.................................... 56

$141.00.... 50 Sam Peltzman Revocable Trust............................................. 106

$140.00.... 15 National Healthy Air License Exchange.................................... 121

$137.00.... 30 National Healthy Air License Exchange.................................... 151

$136.00.... 500 Hoosier Energy REC, Inc./Frank E. Ratts Plant Unit 1SG1.................. 651

$136.00.... 500 Hoosier Energy REC, Inc./Frank E. Ratts Plant Unit 2SG1.................. 1,151

$136.00.... 1,000 PECO Energy Company...................................................... 2,151

$136.00.... 2,000 Virginia Power........................................................... 4,151

$135.00.... 500 Marine Coal Sales Company................................................ 4,651

$135.00.... 30 National Healthy Air License Exchange.................................... 4,681

$135.00.... 1,000 PECO Energy Company...................................................... 5,681

$134.00.... 1,000 PECO Energy Company...................................................... 6,681

$133.00.... 5,000 Cantor Fitzgerald Brokerage, L.P......................................... 11,681

$133.00.... 4,000 Duke Power Company....................................................... 15,681

$133.00.... 30 National Healthy Air License Exchange.................................... 15,711

$133.00.... 1,000 PECO Energy Company...................................................... 16,711

$133.00.... 2,000 Virginia Power........................................................... 18,711

$132.00.... 12 CATEX Vitol Electric Inc................................................. 18,723

$132.00.... 4,250 Duke Power Company....................................................... 22,973

$132.00.... 1,000 PECO Energy Company...................................................... 23,973

$131.00.... 3,000 Cantor Fitzgerald Brokerage, L.P......................................... 26,973

$131.00.... 2,952 Detroit Edison Company................................................... 29,925

$131.00.... 4,500 Duke Power Company....................................................... 34,425

$131.00.... 1,000 PECO Energy Company...................................................... 35,425

$131.00.... 2,000 Virginia Power........................................................... 37,425

*$130.00... 15 National Healthy Air License Exchange.................................... 37,440

*$130.00... 4,000 Canterbury Coal Company.................................................. 41,440

*$130.00... 2,000 PECO Energy Company...................................................... 43,440

*$130.00... 5,000 Duke Power Company....................................................... 48,440

*$130.00... **25,000 Allowance Holdings Corporation........................................... 73,440

*$130.00... 5,000 ......................................................................... 78,440

*$130.00... 500 ......................................................................... 78,940

$129.00.... 6,000 ......................................................................... 84,940

$129.00.... 2,000 ......................................................................... 86,940

$128.00.... 8,000 ......................................................................... 94,940

$128.00.... 5,000 ......................................................................... 99,940

$128.00.... 2,000 ......................................................................... 101,940

$128.00.... 2,000 ......................................................................... 103,940

$127.00.... 10,500 ......................................................................... 114,440

$127.00.... 10 ......................................................................... 114,450

$127.00.... 5,000 ......................................................................... 119,450

$127.00.... 1,000 ......................................................................... 120,450

$126.00.... 7,750 ......................................................................... 128,200

$126.00.... 8,000 ......................................................................... 136,200

$126.00.... 2,000 ......................................................................... 138,200

$125.00.... 15,000 ......................................................................... 153,200

$125.00.... 120 ......................................................................... 153,320

$125.00.... 500 ......................................................................... 153,820

$125.00.... 1,250 ......................................................................... 155,070

$125.00.... 50 ......................................................................... 155,120

$125.00.... 1,000 ......................................................................... 156,120

$124.00.... 1,000 ......................................................................... 157,120

$123.00.... 5,000 ......................................................................... 162,120

$123.00.... 1,000 ......................................................................... 163,120

$122.00.... 1,000 ......................................................................... 164,120

$121.00.... 10,000 ......................................................................... 174,120

$121.00.... 3,000 ......................................................................... 177,120

$121.00.... 2,000 ......................................................................... 179,120

$121.00.... 1,000 ......................................................................... 180,120

$120.00.... 2,000 ......................................................................... 182,120

$120.00.... 1,000 ......................................................................... 183,120

$119.00.... 10,000 ......................................................................... 193,120

$118.00.... 1,250 ......................................................................... 194,370

$118.00.... 5,000 ......................................................................... 199,370

$117.00.... 10,000 ......................................................................... 209,370

$115.00.... 2,000 ......................................................................... 211,370

$115.00.... 10,000 ......................................................................... 221,370

$115.00.... 1,200 ......................................................................... 222,570

$112.00.... 15,000 ......................................................................... 237,570

$111.00.... 1,250 ......................................................................... 238,820

[[Page 20088]]

$100.00.... 4,800 ......................................................................... 243,620

$50.00..... 11,750 ......................................................................... 255,370

$1.00...... 1 ......................................................................... 255,371

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*Per EPA auction regulations on breaking ties, bids at the same price that exceed the number of remaining

allowances are awarded allowances by lottery, the result of which is reflected in the table.

**Awarded a partial fill of 2,160 out of 25,000 (1,560 allowances from the EPA reserve and 600 offered

allowances).

B. 6-Year Advance Auction Results

CBOT received 24 bids requesting 70,286 year 2001 allowances. Nine

bids were successful and 25,400 allowances were sold (25,000 withheld

and 400 contributed). 6-Year advance auction proceeds totaled

$3,319,026.

Table 3.--6-Year Advance Auction Bids (2001)

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Cumulative

Bid Quantity Bidder's name total

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$160.00.... 1 University of Maryland School of Law..................................... 1

$150.00.... 1 University of Maryland School of Law..................................... 2

$150.00.... 1 Hamline University School of Law......................................... 3

$133.00.... 4,000 Duke Power Company....................................................... 4,003

$132.00.... 4,250 Duke Power Company....................................................... 8,253

$131.00.... 4,500 Duke Power Company....................................................... 12,753

$130.00.... 5,000 Duke Power Company....................................................... 17,753

$129.00.... 7,250* Duke Power Company....................................................... 25,003

$128.00.... 2,500** Virginia Power........................................................... 27,503

$126.00.... 656 ......................................................................... 28,159

$126.00.... 1,260 ......................................................................... 29,419

$126.00.... 2,500 ......................................................................... 31,919

$124.00.... 2,500 ......................................................................... 34,419

$123.00.... 718 ......................................................................... 35,137

$121.00.... 1,677 ......................................................................... 36,814

$120.00.... 2,500 ......................................................................... 39,314

$116.00.... 1,883 ......................................................................... 41,197

$111.00.... 2,089 ......................................................................... 43,286

$70.00..... 1,000 ......................................................................... 44,286

$67.00..... 10,000 ......................................................................... 54,286

$66.00..... 5,000 ......................................................................... 59,286

$65.00..... 5,000 ......................................................................... 64,286

$64.00..... 5,000 ......................................................................... 69,286

$63.00..... 1,000 ......................................................................... 70,286

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*This bid was awarded 7,247 allowances from the EPA reserve and 3 offered allowances.

**Awarded a partial fill of 397 offered allowances.

C. 7-Year Advance Auction Results

CBOT received 37 bids requesting 236,928 year 2002 allowances.

Seventeen bids were successful and 100,400 allowances were sold

(100,000 withheld and 400 contributed). 7-Year advance auction proceeds

totaled $12,839,884.

Table 4.--7-Year Advance Auction Bids (2002)

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Cumulative

Bid Quantity Bidder's name total

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$160.00.... 1 University of Maryland School of Law..................................... 1

$143.00.... 350 Paul Wedel............................................................... 351

$133.00.... 4,000 Duke Power Company....................................................... 4,351

$132.00.... 4,250 Duke Power Company....................................................... 8,601

$131.00.... 4,500 Duke Power Company....................................................... 13,101

$130.00.... 5,000 Duke Power Company....................................................... 18,101

$129.00.... 1,000 United Power Association................................................. 19,101

$129.00.... 6,000 Duke Power Company....................................................... 25,101

$128.00.... 8,000 Duke Power Company....................................................... 33,101

$128.00.... 5,000 Virginia Power........................................................... 38,101

$127.00.... 10,500 Duke Power Company....................................................... 48,601

$127.00.... 30,000 Allowance Holdings Corporation........................................... 78,601

$126.00*... 5,000 Virginia Power........................................................... 83,601

$126.00*... 1,000 United Power Association................................................. 84,601

$126.00*... 5,041 Carolina Power & Light Company........................................... 89,642

$126.00*... 2,625 Carolina Power & Light Company........................................... 92,267

$126.00*... 11,000** Duke Power Company....................................................... 103,267

[[Page 20089]]

$125.00.... 10,500 ......................................................................... 113,767

$124.00.... 8,000 ......................................................................... 121,767

$124.00.... 5,000 ......................................................................... 126,767

$123.00.... 6,000 ......................................................................... 132,767

$123.00.... 2,873 ......................................................................... 135,640

$122.00.... 5,000 ......................................................................... 140,640

$121.00.... 900 ......................................................................... 141,540

$121.00.... 4,500 ......................................................................... 146,040

$121.00.... 6,710 ......................................................................... 152,750

$120.00.... 10,538 ......................................................................... 163,288

$120.00.... 4,250 ......................................................................... 167,538

$120.00.... 5,000 ......................................................................... 172,538

$119.00.... 4,250 ......................................................................... 176,788

$118.00.... 4,250 ......................................................................... 181,038

$116.00.... 7,535 ......................................................................... 188,573

$111.00.... 8,355 ......................................................................... 196,928

$61.00..... 10,000 ......................................................................... 206,928

$60.00..... 10,000 ......................................................................... 216,928

$59.00..... 10,000 ......................................................................... 226,928

$58.00..... 10,000 ......................................................................... 236,928

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*Per EPA auction regulations on breaking ties, bids at the same price that exceed the number of remaining

allowances are awarded allowances by lottery, the result of which is reflected in the table.

*Awarded a partial fill of 8,133 (7,733 allowances from the EPA reserve and 400 offered allowances).

Proceeds from all three auctions totaled $22,835,296, all of which

will be returned to the utilities from which allowances were withheld

or offered, per EPA regulations.

FOR FURTHER INFORMATION CONTACT: Eugene Casey, EPA/OAP/Acid Rain

Division (6204J), 401 M Street SW., Washington, DC 20460 (202) 233-

9194.

Dated: April 13, 1995.

Brian J. McLean,

Director, Acid Rain Division.

[FR Doc. 95-10060 Filed 4-21-95; 8:45 am]

BILLING CODE 6560-50-P