In a parallel offering, the RGGI states also auctioned allowances for the second three-year control period beginning in 2012, providing a first-look at future marketprices for RGGI CO2 allowances. The 2,175,513 allowances for the 2012 vintage clearedat a price of $3.05 per allowance. By the end of 2009, the RGGI states will have offered for sale 5% of the total supply of 2012 vintage allowances. The auction raised $117,248,629.80 for energy efficiency, renewable energy and other consumer benefit programs in the ten RGGI states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont).
Potomac Economics, RGGI, Inc.’s independent market monitor, observed the auction and confirmed that it was fair and consistent with noticed auction procedures. In its"Auction Report," Potomac found that there was "no material evidence of collusion ormanipulation by bidders" and that the results were "consistent with competitiveexpectations." 50 separate entities submitted bids to purchase 2.5 times the availablesupply of 2009 allowances, and 20 entities submitted bids to purchase 2.3 times theavailable supply of 2012 allowances. A total of 42 entities won allowances for the 2009 offering, in which bid prices ranged from $1.86 (the minimum bid allowed) to$10.00. 12 bidders won allowances for the 2012 offering, in which bid prices ranged from $1.86 to $4.40.
The Auction Report, issued by the market monitor following each RGGI auction, includes data on the dispersion of bids, provides summaries of purchased allowances, allowances won by bidders and bid prices, and, in accord with the Auction Notice forAuction 3, a list of Potential Bidders for Auction 3. Potential bidders are definedas "each Applicant that has been qualified and submitted a complete Intent to Bid."The list of 63 potential bidders demonstrates broad participation from compliance entities, financial institutions, and environmental organizations. According to Potomac, compliance entities and their affiliates won 78 percent of the2009 allowances and 93 percent of 2012 allowances. The high percentage of allowances won by compliance entities at auction continues a trend established in the two"pre-compliance" auctions held in September and December 2008 in which compliance entities won 80 percent and 85 percent of allowances, respectively.
Compliance obligations for fossil fuel-fired electric generators under the 10-state CO2 Budget Trading Programs took effect on January 1, 2009. RGGI's participating states held two "pre-compliance" auctions in September and December 2008, at which the clearing prices were $3.07 and $3.38, respectively. The RGGI participating states will holdquarterly auctions ensuring bidders ample opportunity to obtain the CO2 allowances they need for compliance across the entire 10-state region. The next auction is scheduled for June 17, 2009. Auction Report for the RGGI CO2 Allowance Auction 3