Regional Greenhouse Gas Initiative

an initiative of the Northeast and Mid-Atlantic States of the U.S.

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Auction 37

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RGGI Auction 37 was held on Sept. 6, 2017 and monitored by Potomac Economics, an independent monitor of electricity markets retained to evaluate the RGGI CO2 allowance market. Potomac observed the auction and found no material evidence of collusion or manipulation by bidders.

Below are key data and information on the results of the auction. Detailed analysis is available in the Market Monitor Report for Auction 37.

1. Auction Statistics:

Current Control Period Offering

  • Offering: 14,371,585
  • 2017 CCR Allowances Available: 10,000,000
  • Quantity Sold: 14,371,585
  • Clearing Price: $4.35
  • Number of Bidders: 43
  • Ratio of Bids to Initial Supply: 2.7
  • Percent Won by Compliance Entities: 47%
  • Percent Won by Compliance-Oriented Entities: 38%

 

2. Auction Participation:

A total of 50 potential bidders, listed by name in section 4 below, submitted an Intent to Bid in the auction.

The market monitor’s report summarizes auction participation for several categories. For reporting purposes, firms are often broken up into the following distinct categories.

  • Compliance-Oriented Entities – Compliance entities that appear to acquire and hold allowances primarily to satisfy their compliance obligations.
  • Investors with Compliance Obligations – Firms that have compliance obligations but which hold a number of allowances that exceeds their estimated compliance obligations by a margin suggesting they also buy for re-sale or some other investment purpose. These firms often transfer significant quantities of allowances to unaffiliated firms.
  • Investors without Compliance Obligations – Firms without any compliance obligations.

These three categories form the basis for two overlapping groups.

  • Compliance Entities –All firms with compliance obligations, and their affiliates. Combines the first and second of the above categories.
  • Investors – All firms which are assessed to be purchasing for investment rather than compliance purposes. Combines the second and third of the above categories.

In Auction 37, Compliance Entities purchased 47 percent of the allowances sold.

In the first 37 RGGI auctions, Compliance Entities purchased 76 percent of the allowances sold.

In Auction 37, Compliance-Oriented Entities purchased 38 percent of allowances.

54 percent of allowances in circulation will be held by Compliance-Oriented Entities following the settlement of allowances sold in Auction 37.

55 percent of allowances in circulation will be held for compliance purposes following the settlement of allowances sold in Auction 37. The number of allowances that are believed to be held for compliance purposes includes 100 percent of the allowances held by Compliance-Oriented Entities, and a portion of allowances held by Investors with Compliance Obligations.

 

3. Dispersion of Bids

In the offering of allowances for the current control period, bids were submitted by 27 Compliance-Oriented Entities and 16 Investors.

One Compliance-Oriented Entity and six Investors submitted bids for a large quantity of allowances (i.e., at least 2 million tons). Overall, Compliance-Oriented Entities accounted for 35 percent of the quantity of allowances for which bids were submitted. The quantity of allowances for which bids were submitted was 2.7 times the initial offering of 14,371,585 allowances.

 

4. Potential Bidders

The following 50 potential bidders submitted their intent to bid in the auction.

    • Astoria Energy, LLC
    • BP Products North America
    • Brooklyn Navy Yard Cogen Partners, LP
    • Caithness Long Island, LLC
    • Calpine Energy Services, LP
    • Carbon Lighthouse Association
    • Castleton Commodities Merchant Trading, LP
    • Cayuga Operating Company, LLC
    • City of Dover
    • Consolidated Edison Comp. of NY, Inc.
    • CPV Maryland, LLC
    • Delaware City Refining Company, LLC
    • Direct Energy Business Marketing, LLC
    • Dominion Energy Marketing, Inc.
    • DRW Commodities, LLC
    • DTE Energy Trading, Inc.
    • Element Markets, LLC
    • Exelon Generation Company, LLC
    • GenOn Energy Management, LLC
    • Helix Ravenswood, LLC
    • Indeck-Corinth Limited Partnership
    • Indeck-Yerkes Limited Partnership
    • J-Power USA Development Co., Ltd.
    • Kendall Green Energy, LLC
    • Kleen Energy Systems, LLC
  • KMC Thermo, LLC
  • Koch Supply & Trading, LP
  • Luminus Energy Partners Master Fund, Ltd.
  • Macquarie Energy, LLC
  • Mercuria Energy America, Inc.
  • Morgan Stanley Capital Group, Inc.
  • National Grid Gen. dba National Grid
  • Nautilus Power, LLC
  • NextEra Energy Marketing, LLC
  • NRG Power Marketing, LLC
  • Ocean State Power, LLC
  • Old Dominion Electric Cooperative
  • Power Authority of the State of New York
  • PSEG Energy Resources and Trade, LLC
  • Public Service Company of New Hampshire
  • RBC
  • Rhode Island State Energy Center, LP
  • Selkirk Cogen Partners, LP
  • Shell Energy North America (US), LP
  • Statkraft US, LLC
  • Taunton Municipal Lighting Plant
  • Verso Corporation
  • Village of Freeport
  • Vitol Inc.
  • Wallingford Energy, LLC