### §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) .] **§580-B PDF §580-B MS-W**  **ORD** S TATUTE S EARCH C H . 3-B C ONTENTS T ITLE 38 C ONTENTS L IST OF T ITLES D ISCLAIMER M AINE LAW R EVISOR ' S O FFICE M AINE L EGISLATURE **Page 1**  **of 8**  **Title 38, §580**

**- B: Cap** 

**- and** 

**- trade program established** 

**6/ 9/** **2014 http://www.mainelegislature.org/legis/statutes/38/title38sec580** 

**- B.html** 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 regi**  **onal 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).] **§580-B PDF §580-B MS-W**  **ORD** S TATUTE S EARCH C H . 3-B C ONTENTS T ITLE 38 C ONTENTS L IST OF T ITLES D ISCLAIMER M AINE LAW R EVISOR ' S O FFICE M AINE L EGISLATURE **Page 2**  **of 8**  **Title 38, §580**

**- B: Cap** 

**- and** 

**- trade program established** 

**6/ 9/** **2014 http://www.mainelegislature.org/legis/statutes/38/title38sec580** 

**- B.html** **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 r ules**  **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. §580-B PDF**  **§580-B MS-W ORD**  S TATUTE S EARCH C H . 3-B C ONTENTS T ITLE 38 C ONTENTS L IST OF T ITLES D ISCLAIMER M AINE LAW R EVISOR ' S O FFICE M AINE L EGISLATURE **Page 3**  **of 8**  **Title 38, §580**

**- B: Cap** 

**- and** 

**- trade program established** 

**6/ 9/** **2014 http://www.mainelegislature.org/legis/statutes/38/title38sec580** 

**- B.html** [ 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 level**  **s 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 thi s**  **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 carb on**  **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 auc tion,**  **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 carb**  **on 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 credi ts"**  **§580-B PDF §580-B MS-W**  **ORD** S TATUTE S EARCH C H . 3-B C ONTENTS T ITLE 38 C ONTENTS L IST OF T ITLES D ISCLAIMER M AINE LAW R EVISOR ' S O FFICE M AINE L EGISLATURE **Page 4** **of 8**  **Title 38, §580**

**- B: Cap** 

**- and** 

**- trade program established** 

**6/ 9/** **2014 http://www.mainelegislature.org/legis/statutes/38/title38sec580** 

**- B.html** **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 carb**  **on 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 sha** **ll use these allowances for existing carbon dioxide budget units to**  **reflect only that portion of each unit's emissions related to el ectricity**  **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 facil**  **ities of a transmission and distribution utility.**  **The department shall adopt rules setting forth the proper trea tment 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 thi**  **s 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**  **§580-B PDF §580-B MS-W**  **ORD** S TATUTE S EARCH C H . 3-B C ONTENTS T ITLE 38 C ONTENTS L IST OF T ITLES D ISCLAIMER M AINE LAW R EVISOR ' S O FFICE M AINE L EGISLATURE **Page 5**  **of 8**  **Title 38, §580**

**- B: Cap** 

**- and** 

**- trade program established** 

**6/ 9/** **2014 http://www.mainelegislature.org/legis/statutes/38/title38sec580** 

**- B.html** **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 electrici ty**  **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 r ules**  **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 ener gy**  **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**  **§580-B PDF §580-B MS-W**  **ORD** S TATUTE S EARCH C H . 3-B C ONTENTS T ITLE 38 C ONTENTS L IST OF T ITLES D ISCLAIMER M AINE LAW R EVISOR ' S O FFICE M AINE L EGISLATURE **Page 6**  **of 8**  **Title 38, §580**

**- B: Cap** 

**- and** 

**- trade program established** 

**6/ 9/** **2014 http://www.mainelegislature.org/legis/statutes/38/title38sec580** 

**- B.html** **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 trustee s 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 relati** **ng 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 §580-B PDF**  **§580-B MS-W ORD**  S TATUTE S EARCH C H . 3-B C ONTENTS T ITLE 38 C ONTENTS L IST OF T ITLES D ISCLAIMER M AINE LAW R EVISOR ' S O FFICE M AINE L EGISLATURE **Page 7**  **of 8**  **Title 38, §580**

**- B: Cap** 

**- and** 

**- trade program established** 

**6/ 9/** **2014 http://www.mainelegislature.org/legis/statutes/38/title38sec580** 

**- B.html** **(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 cap and-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

. The Revisor's Office cannot provide legal advice or interpretation of Maine law to the public. If you need legal advice, please consult a qualifie d attorney.

Office of the Revisor of Statutes 7 State House Station State House Room 108 Augusta, Maine 04333-0007 **§580-B PDF §580-B MS-W**  **ORD** S TATUTE S EARCH C H . 3-B C ONTENTS T ITLE 38 C ONTENTS L IST OF T ITLES D ISCLAIMER M AINE LAW R EVISOR ' S O FFICE M AINE L EGISLATURE **Page 8**  **of 8**  **Title 38, §580**

**- B: Cap** 

**- and** 

**- trade program established** 

**6/ 9/** **2014 http://www.mainelegislature.org/legis/statutes/38/title38sec580** 

**- B.html**