For Immediate Release Contact: Jason Brown

RGGI, Inc.

212-417-3179

Friday, March 7, 2014 jason.brown@rggi.org

CO2 Allowances Sold at $4.00 at 23rd RGGI Auction

First Auction with New RGGI 2014 Cap

NEW YORK — The nine Northeastern and Mid-Atlantic states participating in the Regional 

Greenhouse Gas Initiative (RGGI), the nation’s first market-based cap-and-trade program to 

reduce greenhouse gas pollution, today announced the results of their 23rd auction of carbon 

dioxide (CO2) allowances.

23,491,350 CO2 allowances were sold at the auction at a clearing price of $4.00. Allowances 

sold include the 18,491,350 allowances offered for sale by the nine states and all of the 

5,000,000 allocation year 2014 cost containment reserve (CCR) allowances. Bids for the CO2

allowances ranged from $2.00 to $11.85 per allowance.

The CCR is a fixed additional supply of allowances that are only available for sale if CO2 

allowance prices exceed certain price levels ($4 in 2014, $6 in 2015, $8 in 2016, and $10 in

2017, rising by 2.5 percent, to account for inflation, each year thereafter). There are no more 

CCR allowances available for sale in 2014.

According to the independent market monitor’s report, electricity generators and their corporate 

affiliates have won 78 percent of CO2 allowances sold in RGGI auctions since 2008. Additional 

details are available in the Market Monitor Report for Auction 23, appended and available at

http://www.rggi.org/docs/Auctions/23/Auction_23_Market_Monitor_Report.pdf.

The auction generated $93.96 million for reinvestment by the RGGI states in a variety of 

consumer benefit initiatives, including energy efficiency, renewable energy, direct bill 

assistance, and greenhouse gas abatement programs. Cumulative proceeds from all RGGI CO2

allowance auctions currently total over $1.6 billion dollars.

“Today we received the results of the first auction held since the nine states lowered the cap on 

allowances and made other program changes. The results are what we expected—there was an

increase in the allowance price, all the allowances we offered were sold, and the CCR operated 

as intended. These early results demonstrate RGGI is on track to reduce carbon emissions by 

80-90 million tons through 2020 while helping states fund clean energy investments,” said 

Kenneth Kimmell, Commissioner of the Massachusetts Department of Environmental Protection 

and Chair of the RGGI, Inc. Board of Directors.

“Our first auction under the new cap demonstrates how market-based programs cost-effectively 

reduce carbon pollution while driving investments in a clean energy economy,” said Collin 

O'Mara, Secretary of the Delaware Department of Natural Resources and Environmental 

Control and Vice-Chair of the RGGI, Inc. Board of Directors. “Our recently released Regional 

Investment of RGGI CO2 Allowance Proceeds, 2012, estimates that RGGI proceed investments 

will return more than $2 billion in lifetime energy bill savings to more than 3 million participating 

households and more than 12,000 businesses in our region.”

Regional Greenhouse Gas Initiative, Inc.

90 Church Street, 4th Floor

New York, NY 10007
To receive announcements relating to future auctions and other RGGI news, please join the 

RGGI, Inc. mailing list at http://www.rggi.org/news/mailing_list.

Auction 23 Results At-A-Glance

Auction Date March 5, 2014

Allowances Offered for Sale 18,491,350

2014 CCR Allowances Available for Sale 5,000,000

Allowances Sold 23,491,350

Ratio of Bids to Initial Supply 3.1

Ratio of Bids to Total Supply with CCR 2.5

Clearing Price $4.00

Reserve Price $2.00

Proceeds from Auction 23 $93,965,400

Total Cumulative Proceeds (All Auctions) $1,661,724,034.96

Number of Bidders in Auction 23 45

Percent of Allowances Purchased by Compliance 

Entities & their Corporate Affiliates in Auction 23 45%

Percent of Allowances Purchased by Compliance 

Entities & their Corporate Affiliates in Auctions 1-23 78%

More data is also available at: http://www.rggi.org/market/co2_auctions/results.

About the Regional Greenhouse Gas Initiative

The Northeast and Mid-Atlantic states participating in the second RGGI control period (Connecticut, 

Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont) 

have implemented the first mandatory market-based regulatory program in the U.S. to reduce 

greenhouse gas emissions. The 2014 RGGI cap is 91 million short tons. The RGGI cap then declines 2.5 

percent each year from 2015-2020.

RGGI is composed of individual CO2 budget trading programs in each state, based on each state’s 

independent legal authority. A CO2 allowance represents a limited authorization to emit one short ton of 

CO2, as issued by a respective state. A regulated power plant must hold CO2 allowances equal to its 

emissions to demonstrate compliance for each three-year control period. RGGI’s second control period 

began on January 1, 2012 and extends through December 31, 2014. For more information visit 

www.rggi.org

About Regional Greenhouse Gas Initiative, Inc. 

Regional Greenhouse Gas Initiative, Inc. (RGGI, Inc.) was created to provide technical and administrative 

services to the states participating in the Regional Greenhouse Gas Initiative. RGGI, Inc. is a 501(c)(3) 

nonprofit organization. For more information, visit: www.rggi.org/rggi.

The RGGI auctions are administered by RGGI, Inc. and run on an on-line platform provided by World 

Energy Solutions, Inc. 

###
MARKET MONITOR REPORT

FOR AUCTION 23

Prepared for: 

RGGI, Inc., on behalf of the RGGI Participating States

Prepared By:

March 7, 2014
 Page 2

This report was prepared by Potomac Economics (the contractor) in the course of performing 

work contracted for and sponsored by RGGI, Inc. on behalf of states participating in RGGI 

(Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode 

Island, and Vermont). The opinions expressed in this report do not necessarily reflect those of 

RGGI, Inc. or any of the states participating in RGGI, and reference to any specific product, 

service, process, or method does not constitute an implied or expressed recommendation or 

endorsement of it. Further, RGGI, Inc., the states participating in RGGI, and the contractor make 

no warranties or representations, expressed or implied, as to the fitness for particular purpose or 

merchantability of any product, apparatus, or service, or the usefulness, completeness, or 

accuracy of any processes, methods, or other information contained, described, disclosed, or 

referred to in this report. RGGI, Inc., the states participating in RGGI, and the contractor make 

no representation that the use of any product, apparatus, process, method, or other information 

will not infringe privately owned rights and will assume no liability for any loss, injury, or 

damage resulting from, or occurring in connection with, the use of information contained, 

described, disclosed, or referred to in this report.

The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory market-based regulatory 

program in the U.S. to reduce greenhouse gas emissions. RGGI is a cooperative effort of 

Northeast and Mid-Atlantic states to reduce emissions of carbon dioxide (CO2) from the power 

sector.

RGGI, Inc. is a non-profit corporation created to provide technical and administrative services to 

the states participating in the Regional Greenhouse Gas Initiative.
Market Monitor Report for Auction 23

 Page 3

MARKET MONITOR REPORT FOR AUCTION 23

As the Market Monitor for the RGGI CO2 allowance market, Potomac Economics monitors the 

conduct of market participants in the auctions and in the secondary market to identify indications 

of market manipulation or collusion. We also review the administration of the auctions by 

World Energy Solutions. This report summarizes our findings regarding RGGI Auction 23, 

which was held on March 5, 2014. 

We observed the auction as it occurred and have completed our review and analysis of its results. 

Based on our review of bids in the auction, we find no material evidence of collusion or

manipulation by bidders. 

The Cost Containment Reserve (“CCR”) was used for the first time in Auction 23. The demand 

for CO2 allowances from bids submitted above the CCR Trigger Price of $4.00 exceeded the 

Initial Offering of 18,491,350 allowances and was sufficient to purchase all 5 million 2014 CCR 

allowances. After the CCR was exhausted, the auction cleared at a price of $4.00 per ton. There 

are no other CCR allowances available for sale in 2014. 

Forty-five bidders participated in the offering of CO2 allowances for the current control period. 

Bids were submitted to purchase 3.1 times the Initial Offering of CO2 allowances and 2.5 times 

the total available supply (including allowances in the CCR). Compliance entities and their 

affiliates purchased 45 percent of the CO2 allowances. There was no indication of barriers to 

participation in the auction. 

Based on our review of the administration of the market, we found that:

The auction was administered in a fair and transparent manner in accordance with the 

noticed auction procedures and limitations.

The auction results were consistent with the market rules and the bids received.

Sensitive information was treated appropriately by the auction administrator. 

There were no indications of issues with the auction platform such as hardware or 

software problems, communications issues, or security breaches.

In summary, the results of our monitoring of RGGI Auction 23 raise no material concerns 

regarding the auction process, barriers to participation in the auction, or the competitiveness of 

the auction results. The appendix provides additional information about the market for RGGI 

CO2 allowances and outcomes of the auction. 
Market Monitor Report for Auction 23

 Page 4

APPENDIX

A. DISPERSION OF PROJECTED DEMAND

The wide dispersion of projected demand for RGGI allowances across compliance entities 

facilitates the competitive performance of the auction.

The following figure shows the relative shares of projected demand for RGGI allowances by

compliance entity in the current control period. The largest compliance entity represents only 16

percent of the total projected demand for allowances. Approximately half of the projected 

demand is composed of entities that each account for less than 5 percent of the total demand. 

Participation by a large number of entities facilitates the competitive performance of the auction.

Figure 1: Projected Demand for RGGI Allowances

Shares by Compliance Entity

16%

6%

11%

14%

Less

Than

5%

5%
Market Monitor Report for Auction 23

 Page 5

B. DISPERSION OF BIDS IN AUCTION 23

In the offering of allowances for the current control period, bids were submitted by 35 

compliance entities and ten other entities. In our review of the bids and the qualification 

process, we found no material evidence of anti-competitive conduct or inappropriate barriers to 

participation.

The following figure summarizes the quantity of allowances for which bids were submitted by 

each bidder. Nine compliance entities and five other entities submitted bids for a large quantity 

of allowances (i.e., at least 2 million tons). Overall, compliance entities accounted for 65 percent 

of the quantity of allowances for which bids were submitted. The quantity of allowances for 

which bids were submitted was 3.1 times the Initial Offering of 18,491,350 allowances and 2.5 

times the total available supply (including the 5 million allowances in the CCR). In Auction 22, 

the quantity of allowances for which bids were submitted was 2.7 times the available supply. 

The bid quantities were widely distributed among the 45 bidders. The concentration of bids, 

using the Herfindahl-Hirschman Index (“HHI”), was relatively low at 487 in Auction 23, down 

from 557 in Auction 22. The HHI is a standard measure of concentration calculated by squaring

each entity’s share and then summing the squares across all entities (hence, the index ranges 

from 0 to 10,000). 

Figure 2: Quantity of Bids Submitted by Entity

By Type of Entity and Quantity Bid 

0

3

6

9

1 2

1 5

4,000+ 2,000-

4,000

1,000-

2,000

250-

1,000

100-

250

2 5-

100 

<25 Number of Bidders in Range

Quantity of Bids Submitted (in Thousands of Tons)

d

Other Entities

Compliance Entities

Number of Bidders: 45

Compliance Entity Share of Bids: 65%

Ratio of Bids to Supply (Initial): 3.1

Ratio of Bids to Supply (w/CCR): 2.5

HHI of Bid Concentration: 487
Market Monitor Report for Auction 23

 Page 6

C. SUMMARY OF PURCHASES OF ALLOWANCES IN AUCTION 23

In the offering of allowances for the current control period, awards were distributed across 28

bidders with five bidders purchasing two million tons or more and 15 bidders purchasing 

300,000 tons or more. Compliance entities and their affiliates purchased 45 percent of the 

allowances in the auction. 

The share of allowances purchased and several other quantities are reported for two types of 

entities:

Compliance Entities: This includes all compliance entities and their affiliates. In this 

report, affiliated firms are firms that: (i) have a parent-subsidiary relationship with a 

compliance entity, (ii) are subsidiaries of a parent company that has a large interest in a 

compliance entity, (iii) have substantial control over the operation of a budget source 

and/or responsibility for acquiring RGGI allowances to satisfy its compliance obligations.

Other Entities: This includes all other entities without compliance obligations.

The following statistics summarize the purchases and holdings of allowances by compliance 

entities and their affiliates under the RGGI program:

In Auction 23, compliance entities and their affiliates purchased 45 percent of the 

allowances sold. 

In the first 23 RGGI auctions, compliance entities and their affiliates purchased 78

percent of the allowances sold.

Compliance entities and their affiliates will hold 74 percent of the allowances in 

circulation following the settlement of allowances sold in Auction 23. 

The following table shows the quantity of allowances purchased by each bidder. The identity of 

each bidder is masked, and the bidders are ranked according to the amount of allowances 

awarded, from largest to smallest.
Market Monitor Report for Auction 23

 Page 7

Table 1: Quantity of Allowances Awarded by Bidder

Bidder Number of Allowances Awarded

Bidder 1 3,500,000

Bidder 2 2,500,000

Bidder 3 2,400,000

Bidder 4 2,311,000

Bidder 5 2,000,000

Bidder 6 1,950,000

Bidder 7 1,500,000

Bidder 8 1,351,000

Bidder 9 1,250,000

Bidder 10 820,000

Bidder 11 748,000

Bidder 12 500,000

Bidder 13 500,000

Bidder 14 500,000

Bidder 15 386,350

Bidder 16 250,000

Bidder 17 210,000

Bidder 18 182,000

Bidder 19 172,000

Bidder 20 150,000

Bidder 21 85,000

Bidder 22 66,000

Bidder 23 44,000

Bidder 24 36,000

Bidder 25 24,000

Bidder 26 24,000

Bidder 27 20,000

Bidder 28 12,000
Market Monitor Report for Auction 23

 Page 8

D. SUMMARY OF BID PRICES IN AUCTION 23

Bids were submitted across a wide range of prices in the auction and the clearing price of $4.00 

was relatively consistent with average bid prices submitted. 

The following table reports several statistics regarding the bid prices for bids submitted in 

Auction 23. The median and mean bid prices are weighted by the quantity of each bid.

Current

Bid Prices:

Minimum $2.00

Maximum $11.85

Average (Median) $3.95

Average (Mean) $3.76

Clearing Price: $4.00
Market Monitor Report for Auction 23

 Page 9

E. NAMES OF POTENTIAL BIDDERS IN AUCTION 23

In accordance with Sections 2.8 and 3 of the Auction Notice for CO2 Allowance Auction 23 on 

March 5, 2014, the Participating States are releasing the names of Potential Bidders in Auction 

23. The states defined potential bidders as: “Each Applicant that has been qualified and 

submitted a complete Intent to Bid.” The list of 52 Potential Bidders is as follows: 

Astoria Energy, LLC Indeck-Oswego Limited Partnership

Brayton Point Energy, LLC Indeck-Yerkes Limited Partnership

Brooklyn Navy Yard Cogen Partners, LP Jamestown Board of Public Utilities

Caithness Long Island, LLC J-Power USA Development Co., Ltd.

Calpine Energy Services, LP Kleen Energy Systems, LLC

Castleton Commodities Merchant Trading, LP Koch Supply & Trading, LP

Castleton Power, LLC Lakeside Energy, LLC

CE2 Carbon Capital, LLC Luminus Energy Partners QP, LP

Consolidated Edison Comp. of NY, Inc. Mercuria Energy America, Inc.

CP Energy Marketing (US) Inc. Millennium Power Partners, LP

Delaware City Refining Company, LLC Morgan Stanley Capital Group, Inc.

Dominion Energy Marketing, Inc. National Grid Gen. dba National Grid

DTE Energy Trading, Inc. New Athens Generating Company, LLC

Dynegy Marketing and Trade, LLC NextEra Energy Power Marketing, LLC

EDF Trading North America, LLC Noble Americas Gas & Power Corp.

Entergy Rhode Island State Energy, LP NRG Power Marketing, LLC

EquiPower Resources Power Authority of the State of New York

Evolution Markets, Inc. PSEG Energy Resources & Trade, LLC

Exelon Generation Company, LLC Public Service Company of New Hampshire

Five Rings Capital, LLC RBC

GDF SUEZ Energy Marketing NA, Inc. Selkirk Cogen Partners, LP

GenOn Energy Management, LLC Shell Energy North America (US), LP

Granite Ridge Energy, LLC Upstate New York Power Producers, LLC

Hess Energy Marketing LLC Verso Paper Corp.

Indeck-Corinth Limited Partnership Vitol Inc.

Indeck-Olean Limited Partnership Wallingford Energy, LLC