§580-A §580-C

Maine Revised Statutes

Title 38: WATERS 

AND NAVIGATION

Chapter 3-B: REGIONAL GREENHOUSE GAS 

INITIATIVE 

§580-B. Cap-and-trade program established 

A carbon dioxide cap-and-trade program, referred to in this 

section as "the program," is established in accordance with this 

section. [2007, c. 317, §17 (NEW).]

1. Application. All carbon dioxide budget units are subject to 

the carbon dioxide cap-and-trade program, except that a carbon 

dioxide budget unit is exempt from the program if: 

A. It is incapable of producing enough energy to generate 25 

megawatts or more of electrical output; [2007, c. 317, §17

(NEW).]

B. Its sale of electricity to any power distribution system is less 

than 10% of its gross electrical generation on an annual basis. In 

calculating this percentage, all electricity transmitted to the

regional grid over the facilities of a transmission and distribution 

utility as a result of verifiable conservation and demand-side 

management initiatives or any emergency mandate of the 

regional transmission organization or lawful order of a 

governmental authority is not included in the calculation of 

annual sales; or [2007, c. 317, §17 (NEW).]

C. Fifty percent or more of its annual heat input comes from the 

combustion of fuels other than fossil fuels. [2007, c. 317, 

§17 (NEW).]

[ 2007, c. 317, §17 (NEW) .] 

2. Contingent on initiation of comparable programs. The 

carbon dioxide cap-and-trade program commences no earlier than 

January 1, 2009 and only when other states that are participating in 

the regional greenhouse gas initiative that produce a minimum of 

35,000,000 tons of annual carbon dioxide emissions budget and 

participate in a wholesale electricity market administered and 

overseen by the regional transmission organization have initiated a 

comparable carbon dioxide cap-and-trade program. Nothing in this 

section precludes the department from initiating air emissions 

licensing of carbon dioxide budget sources or from participating in 

auctions for the sale of carbon dioxide allowances. 

[ 2007, c. 608, §6 (AMD) .] 

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2-A. Condition for withdrawal. The State shall withdraw 

from the regional greenhouse gas initiative when a sufficient number 

of other independent system operator participating states have 

withdrawn such that the total carbon dioxide emissions budget for the 

calendar year 2009, as specified in the Memorandum of 

Understanding, of the remaining other independent system operator 

participating states is less than 35,000,000 tons. If the condition is 

met for withdrawal from the regional greenhouse gas initiative, the 

department shall: 

A. Immediately take all necessary steps to withdraw the State

from all memoranda of understanding and contracts with states 

participating in the regional greenhouse gas initiative relating to 

the regional greenhouse gas initiative; and [2011, c. 277, §2

(NEW).]

B. Submit legislation to the Legislature to make the necessary 

changes in law to reflect the State's withdrawal from the regional 

greenhouse gas initiative. [2011, c. 277, §2 (NEW).]

[ 2011, c. 277, §2 (NEW) .] 

3. Base annual budget. Until January 1, 2014, the base annual 

carbon dioxide emissions budget is established at 5,948,902 tons of 

carbon dioxide. For the year 2014, the base annual carbon dioxide 

emissions budget is established at 3,277,250 tons of carbon dioxide. 

Beginning with the year 2015, the annual carbon dioxide emissions 

budget must decline by 2.5% each year through the year 2020. 

[ 2013, c. 369, Pt. D, §4 (AMD) .] 

3-A. Interim adjustments for banked allowances. The 2014 

base annual carbon dioxide emissions budget of 3,277,250 tons of 

carbon dioxide and base annual budgets for 2015 to 2020 must be 

reduced by an amount equivalent to the quantity of banked 

allowances in excess of the quantity of allowances required for 

compliance at the end of 2013. The State's interim adjustments for 

banked allowances must be made in proportion to the State's share of 

the total annual carbon dioxide emissions budget for all states 

participating in the regional greenhouse gas initiative. 

[ 2013, c. 369, Pt. D, §5 (NEW) .] 

4. Rules implementing program. The department shall adopt 

rules to implement the program. Rules must be consistent with the

model rule. The rules must include, but are not limited to: 

A. Provisions for the establishment of a system for the annual 

assignment, sale and distribution of carbon dioxide emissions 

allowances consistent with the carbon dioxide emissions budget;

[2007, c. 317, §17 (NEW).]

B. Provisions for the establishment of carbon dioxide budget 

unit compliance obligation accounts; [2007, c. 317, §17

(NEW).]

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C. Provisions for the establishment of carbon dioxide offset 

project allowance categories and requirements; [2007, c. 

317, §17 (NEW).]

D. Provisions for the implementation of a licensing process for 

carbon dioxide budget units; [2007, c. 317, §17 (NEW).]

E. Provisions for the establishment of a carbon dioxide 

emissions and carbon dioxide allowance tracking program; and

[2007, c. 317, §17 (NEW).]

F. Provisions to manage the carbon dioxide allowance auction 

developed in coordination with other states and jurisdictions in 

the regional greenhouse gas initiative and in a manner that is 

consistent with provisions adopted by those states and 

jurisdictions and, to the extent feasible, that: 

(1) Ensure close monitoring of allowance transactions in a 

manner that guards against collusion and market 

manipulation; 

(2) Ensure ongoing authentic price discovery and minimize 

price volatility;

(3) Facilitate open participation for bidding to all 

individuals or entities that meet the financial requirements 

jointly adopted by the participating states; 

(4) Minimize administration and transaction costs and 

provide for an open and transparent user-friendly system; 

(5) Provide that ongoing monitoring of market activity is 

undertaken by entities that have complete financial 

independence from any market participant; 

(6) For purposes of civil and criminal enforcement 

authority under section 349, establish a contract term at the 

time an allowance is purchased at the regional auction for 

violations of market rules jointly adopted by the 

participating states and jurisdictions or through another 

method of ensuring state jurisdiction; and 

(7) Guarantee that the Attorney General, the Public Utilities 

Commission and the commissioner have access to all 

auction information and information concerning allowance 

trading activity, including reports provided to the regional 

organization by a market monitor. [2007, c. 317, §17

(NEW).]

Rules adopted pursuant to this subsection are routine technical rules 

as defined in Title 5, chapter 375, subchapter 2-A. 

[ 2013, c. 369, Pt. D, §6 (AMD) .] 

5. Enforcement. Violations of this chapter are enforceable, and 

penalties may be imposed in accordance with sections 347-A, 348 

and 349. 

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[ 2007, c. 317, §17 (NEW) .] 

6. Waiver of enforcement; suspension of compliance 

obligation. The commissioner has authority, under the exceptional 

circumstances set out in paragraphs A and B, to waive or suspend 

requirements of this chapter. 

A. If the regional greenhouse gas initiative results in price levels 

for allowances that will result in immediate and irreparable harm 

to the operations of a carbon dioxide budget unit regulated under 

this chapter, including but not limited to the termination of 

business at that location, the commissioner may, in consultation 

with the Attorney General and the chair of the Public Utilities

Commission, grant a temporary waiver of enforcement not to 

exceed one year for any violation by an individual regulated 

carbon dioxide budget unit of a requirement of this chapter.

[2007, c. 317, §17 (NEW).]

B. In cases of emergency events that are beyond the control of a 

carbon dioxide budget unit, the commissioner may temporarily 

suspend the compliance obligation under a particular permit 

until such time as the emergency no longer is in effect. [2007, 

c. 317, §17 (NEW).]

The department shall adopt rules for the implementation of this 

subsection. Rules adopted pursuant to this subsection are major 

substantive rules as defined in Title 5, chapter 375, subchapter 2-A 

and must be submitted to the Legislature by January 15, 2008 for 

review by the Joint Standing Committee on Natural Resources during 

the Second Regular Session of the 123rd Legislature. 

[ 2007, c. 317, §17 (NEW) .] 

7. Allocation of carbon dioxide emissions allowances. The 

department shall allocate 100% of the annual carbon dioxide 

emissions allowances for public benefit to produce funds for carbon 

reduction and energy conservation, as specified in Title 35-A, section 

10109. Except as provided in subsections 7-A and 8, the department 

shall sell the carbon dioxide emissions allowances at public auction, 

in accordance with rules adopted under subsection 4. Revenue 

resulting from the sale of allowances must be deposited in the 

Regional Greenhouse Gas Initiative Trust Fund established under 

Title 35-A, section 10109. 

[ 2009, c. 652, Pt. A, §60 (RPR) .] 

7-A. Voluntary renewable energy market set-aside. The 

department shall set aside a portion of the State's annual carbon 

dioxide emissions budget in a voluntary renewable market set-aside 

account. The allowances from this account must be retired in an 

amount equal to the amount of carbon dioxide emissions reduced by 

the voluntary purchase of eligible renewable energy credits by 

persons in the State up to the amount held in the set-aside account. 

For purposes of this subsection, "eligible renewable energy credits" 

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means renewable energy credits generated within the states that are 

participating in the regional greenhouse gas initiative. 

Before February 1, 2010, the portion of the State's annual carbon 

dioxide emissions budget that is set aside in a voluntary renewable 

market set-aside account pursuant to this subsection may not exceed 

2% of that budget. The department shall report to the joint standing 

committee of the Legislature having jurisdiction over utilities and 

energy matters by January 15, 2010 as to whether that 2% cap is 

appropriate. By January 31, 2010, the Efficiency Maine Trust, 

established under Title 35-A, section 10103, in consultation with the 

department, shall establish the cap on the portion of the State's annual 

carbon dioxide emissions budget that is set aside in a set-aside 

account. 

[ 2009, c. 372, Pt. B, §5 (AMD) .] 

8. Combined heat and power incentive; set aside. The 

department shall set aside a portion of the State's annual carbon 

dioxide emissions allowances in an allowance account for carbon 

dioxide budget units that are combined heat and power units and are 

located at integrated manufacturing facilities. The department shall 

use these allowances for existing carbon dioxide budget units to 

reflect only that portion of each unit's emissions related to electricity 

and thermal power generated at a carbon dioxide budget unit that is a 

combined heat and power unit, whether it is a combined cycle system

or other energy generation configuration of which the carbon dioxide 

budget unit is a part, that are not transmitted across the facilities of a 

transmission and distribution utility. 

The department shall adopt rules setting forth the proper treatment of 

combined heat and power units. The rules may distinguish between 

combined heat and power units that commence operation after July 1, 

2007 and those that commence operation before July 1, 2007. Rules 

adopted pursuant to this subsection are routine technical rules as

defined in Title 5, chapter 375, subchapter 2-A. 

[ 2007, c. 317, §17 (NEW) .] 

9. Integrated manufacturing facilities. This subsection 

governs the treatment of integrated manufacturing facilities under this 

chapter. 

A. The compliance obligation for a carbon dioxide budget unit at 

an integrated manufacturing facility is the carbon dioxide 

emissions associated with electricity resulting from the 

combustion of fossil fuels and transmitted over the facilities of a 

transmission and distribution utility. Absent any contractual 

arrangement to the contrary, the department shall presume that 

electricity from sources other than carbon dioxide budget units is 

transmitted first. The department shall adopt rules governing the 

compliance obligation for electricity generated at integrated 

manufacturing facilities and transmitted over the facilities of a 

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transmission and distribution utility. [2007, c. 317, §17

(NEW).]

B. The department shall establish the Integrated Manufacturing 

Facility Retirement Account to ensure proper accounting for 

carbon emissions from the generation of electricity and heat 

from fossil fuels at integrated manufacturing facilities. [2007, 

c. 317, §17 (NEW).]

C. The purchase of electricity pursuant to a long-term electricity 

contract renders the purchaser an owner of a carbon dioxide 

budget unit for purposes of this chapter and obligates the owner 

to obtain the carbon dioxide emissions allowances applicable to 

the compliance obligation associated with the carbon dioxide 

budget unit. For purposes of this paragraph, "owner" means: 

(1) The holder of any portion of the legal or equitable title 

in a carbon dioxide budget unit; 

(2) The holder of a leasehold interest in a carbon dioxide 

budget unit, other than a passive lessor or a person who has 

an equitable interest through such lessor whose rental 

payments are not based, either directly or indirectly, upon 

the revenues or income from that unit; or 

(3) A purchaser of electricity from a carbon dioxide budget 

unit under a contractual arrangement for greater than a 3-

year period. 

If no person has title to the electricity under subparagraphs (1) to 

(3), the owner is any holder of any portion of the legal or 

equitable title to the output of a carbon dioxide budget unit or 

any holder of a leasehold interest in such a unit. [2007, c. 

317, §17 (NEW).]

Rules adopted pursuant to this subsection are routine technical rules 

as defined in Title 5, chapter 375, subchapter 2-A. 

[ 2007, c. 317, §17 (NEW) .] 

10. Annual report. The department, the Public Utilities 

Commission and the trustees of the Efficiency Maine Trust 

established pursuant to Title 35-A, section 10103 shall submit a joint

report to the joint standing committees of the Legislature having 

jurisdiction over natural resources matters and utilities and energy 

matters by March 15th annually. The report must assess and address: 

A. The reductions of greenhouse gas emissions from carbon 

dioxide budget units, conservation programs funded by the 

Regional Greenhouse Gas Initiative Trust Fund pursuant to Title 

35-A, section 10109 and carbon dioxide emissions offset 

projects; [2009, c. 652, Pt. A, §61 (RPR).]

B. The improvements in overall carbon dioxide emissions and 

energy efficiency from sources that emit greenhouse gases 

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including electrical generation and fossil fuel fired units;

[2009, c. 652, Pt. A, §61 (RPR).]

C. The maximization of savings through systemic energy 

improvements statewide; [2009, c. 652, Pt. A, §61

(RPR).]

D. Research and support of new carbon dioxide offset allowance 

categories for development in the State; [2009, c. 652, Pt. 

A, §61 (RPR).]

E. Management and cost-effectiveness of the State's energy 

conservation and carbon reduction programs and efforts funded 

by the Regional Greenhouse Gas Initiative Trust Fund, 

established pursuant to Title 35-A, section 10109; [2009, c. 

652, Pt. A, §61 (RPR).]

F. The extent to which funds from the Regional Greenhouse Gas 

Initiative Trust Fund, established pursuant to Title 35-A, section 

10109, serve customers from all classes of the State's 

transmission and distribution utilities; and [2009, c. 652, 

Pt. A, §61 (RPR).]

G. The revenues and expenditures of the Regional Greenhouse 

Gas Initiative Trust Fund, established pursuant to Title 35-A, 

section 10109. [2009, c. 652, Pt. A, §61 (RPR).]

The department, the Public Utilities Commission and the trustees of 

the Efficiency Maine Trust may include in the report any proposed 

changes to the program established under this chapter. 

The joint standing committee of the Legislature having jurisdiction 

over natural resources matters may submit legislation relating to areas 

within the committee's jurisdiction in connection with the program. 

The joint standing committee of the Legislature having jurisdiction 

over utilities and energy matters may submit legislation relating to 

areas within the committee's jurisdiction in connection with the 

program. 

[ 2013, c. 369, Pt. D, §7 (AMD) .] 

11. Confidentiality. To protect the integrity of individual 

auctions administered under the carbon dioxide cap-and-trade 

program established in this section, the following records are 

confidential as provided in this subsection. 

A. Except as provided in this paragraph, the following records 

are confidential for a period of 3 years beginning at the time of 

application, submission, award or record creation by the 

department or its agents: 

(1) Auction bid and award information specific to any one 

account holder;

(2) Carbon dioxide allowance and carbon dioxide offset 

allowance account holdings; and 

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(3) Carbon dioxide allowance and carbon dioxide offset 

allowance transactions.

This paragraph does not prohibit the release of carbon dioxide 

allowance and carbon dioxide offset allowance account holdings 

and transactions in an aggregated form that does not permit the 

identification of any person or entity. 

The commissioner may release information described in 

subparagraph (1), (2) or (3) before the expiration of the 3-year 

period if the commissioner determines that confidentiality of that 

information is no longer required to protect the integrity of 

individual auctions administered under the carbon dioxide capand-trade program. [2009, c. 200, §11 (NEW).]

B. The following records remain confidential and may not be 

disclosed except pursuant to a court order or upon the written 

consent of the account holder: 

(1) Proprietary information contained in documents 

required to be submitted to participate in an auction 

conducted under the carbon dioxide cap-and-trade program; 

and 

(2) Carbon dioxide allowance and carbon dioxide offset 

allowance transaction prices. This subparagraph does not 

prohibit the release of transaction prices calculated in an 

aggregated manner that does not permit the identification of 

any person or entity. [2009, c. 200, §11 (NEW).]

Records containing any emission, offset or allowance tracking 

information submitted for the purpose of demonstrating compliance 

with the carbon dioxide cap-and-trade program and rules adopted to 

implement the program are public records subject to disclosure under 

Title 1, chapter 13. 

[ 2009, c. 200, §11 (NEW) .] 

SECTION HISTORY 

2007, c. 317, §17 (NEW). 2007, c. 608, §§6, 7 (AMD). 

2009, c. 200, §§7-11 (AMD). 2009, c. 372, Pt. B, §§4-6

(AMD). 2009, c. 652, Pt. A, §§60, 61 (AMD). 2011, c.

277, §2 (AMD). 2013, c. 369, Pt. D, §§4-7 (AMD). 

Data for this page extracted on 12/03/2013 12:04:20. 

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interpretation of Maine law to the public. 

If you need legal advice, please consult a qualified attorney. 

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