[Code of Federal Regulations]
[Title 40, Volume 14]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 40CFR73.70]
[Page 162-163]
TITLE 40--PROTECTION OF ENVIRONMENT
CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)
PART 73--SULFUR DIOXIDE ALLOWANCE SYSTEM--Table of Contents
Subpart E--Auctions, Direct Sales, and Independent Power Producers
Written Guarantee
Sec. 73.70 Auctions.
Source: 56 FR 65601, Dec. 17, 1991, unless otherwise noted.
(a) Allowances to be auctioned. Every year the Administrator will
auction allowances from the Auction Subaccount, established pursuant to
subpart B of this part, according to the following schedule:
Table I--Allowance Schedule for Auctions
------------------------------------------------------------------------
Spot Advance Advance
Year of purchase auction auction auction*
------------------------------------------------------------------------
1993..................................... 50,000 a 100,000 b
1994..................................... 50,000 a 100,000 b 25,000 c
1995..................................... 50,000 a 100,000 b 25,000 c
1996..................................... 150,000 100,000 b 25,000 c
1997..................................... 150,000 125,000 b 25,000 c
1998..................................... 150,000 125,000 b
1999..................................... 150,000 125,000 b
2000 and after........................... 125,000 125,000 b
------------------------------------------------------------------------
a Not usable until 1995.
b Not usable until 7 years after purchase.
c Not usable until 6 years after purchase.
*These are unsold advance allowances from the direct sale program for
1993, 1994, 1995, and 1996 respectively.
In addition to the allowances listed above, the Administrator will
auction allowances pursuant to paragraph (c) of this section and
Sec. 73.72(q) in the amounts and at the times provided for therein.
(b) Timing of the auctions. The spot auction and the advance auction
will be held on the same day, selected each year by the Administrator,
but no later than March 31 of each year. The Administrator will conduct
one spot auction and one advance auction in each calendar year.
(c) Submittal for other allowances for auction. Authorized account
representatives may offer allowances for sale at auction, provided that
allowances are dated for the year in which they are offered or for any
previous year or for seven years following the year in which they are
offered. Such authorized account representatives may specify a minimum
price for the allowances offered at the auctions. The authorized account
representative must notify the Administrator fifteen business days prior
to the auctions, using the SO2 Allowance Offer Form published
by the Administrator, or by means of electronic communication if the
Administrator, following public notice, so requires or permits at some
future time. The notification shall include:
(1) The compliance use date of the allowances offered;
(2) The number of allowances to be sold and any other information
identifying the allowances offered that may be required by subpart C of
this part;
(3) Any minimum price; and
(4) Whether the authorized account representative is willing to sell
fewer allowances than the number stated in paragraph (c)(2) of this
section, if the full amount cannot be sold. After notification, the
Administrator will deduct allowances from the appropriate Allowance
Tracking System account from which allowances are being offered and
place them in a separate subaccount for such allowances.
(d) Conduct of the auctions. (1) The Administrator will rank all
bids in descending order of bid price starting with the highest.
Allowances will be sold from the Auction Subaccount in this order at the
amounts specified in the bids until there are no allowances in the
subaccount. If all allowances are sold from the Auction Subaccount,
including unsold allowances transferred from the preceding year's direct
sale, and if bids still remain, the Administrator will sell allowances
offered by the authorized account representatives, beginning with those
offered at the lowest minimum price. Allowances offered at the lowest
minimum price will be matched with the highest bid remaining after the
Auction Subaccount is exhausted. Sales of offered allowances, including,
but not limited to, allowances offered by more than one offeror at the
same minimum bid price, will continue in ascending order of minimum
price, starting with the lowest, and descending order of remaining bids,
starting with the highest, until:
(i) All allowances are sold,
(ii) No bids remain, or
(iii) Prices of remaining bids do not meet minimum prices required
in remaining offers.
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(2) In the event that there is more than one bid submitting the same
price and the total number of allowances requested in all such bids
exceeds the number of allowances remaining, the Administrator will award
the remaining allowances by lottery to such bidders.
(3) In the event that there are more offers of sale at the minimum
price than there are bids meeting that price, allowances from all such
offers will be sold to cover the bids, according to each such offeror's
pro rata share of all allowances so offered.
(4) In the event that fewer allowances remain than are requested in
a bid, the Administrator will sell such remaining allowances to the
bidder provided that, pursuant to Sec. 73.71(b)(4), the bid states the
bidder's willingness to purchase fewer allowances than requested in the
bid.
(5) In the event that fewer than all allowances included in an offer
for sale would be sold to remaining bids based on price, the
Administrator will sell such allowances to the bidder(s), provided that,
pursuant to Sec. 73.70(c)(4), the offer states the offeror's willingness
to sell fewer allowances than were offered for sale.
(e) Announcement of results. Following each auction, the
Administrator will publish the names of winning bidders and their bids,
the amounts of losing bids, and the lowest price at which allowances are
sold. The Administrator will announce the results of each auction
through the Allowance Tracking System. The results will also be
published in the Federal Register and in the Commerce Business Daily.
(f) Transfer of allowances. Allowances will be transferred from the
Auction Subaccount and from the subaccount for allowances offered by
authorized account representatives to the Allowance Tracking System
accounts of successful bidders as soon as payment is collected by the
Administrator.
(g) Return of unsuccessful bids. The Administrator will return
payment to unsuccessful bidders and to bidders unwilling to purchase
fewer allowances than requested following the conclusion of each
auction.
(h) Transfer of proceeds. The Administrator will return all proceeds
from the auction as follows:
(1) Allowances auctioned from the Auction Subaccount. Not later than
90 days following each auction, the Administrator will pay a pro rata
share of the proceeds of each auction to the authorized account
representative of each unit from whose annual allowance allocation
allowances were withheld for the purposes of establishing the Auction
Subaccount. Each unit's pro rata share will be calculated pursuant to
regulations to be promulgated under subpart B.
(2) Allowances contributed from others. Not later than 90 days
following each auction, the Administrator will transfer the full amount
of the proceeds of each sale of allowances offered by authorized account
representatives to such representatives. Proceeds from the sale of
allowances that were offered with the same specified minimum price will
be distributed according to each such offeror's pro rata share of the
sale of such allowances.
(3) The Administrator will pay no interest on any payment made
pursuant to paragraphs (h) (1) and (2) of this section.
(i) Return of unsold allowances. The Administrator will return all
unsold allowances from the auction as follows:
(1) Allowances in the Auction Subaccount. At the conclusion of each
auction, the Administrator will transfer to the Allowance Tracking
System account of each unit specified in paragraph (h)(1) of this
section its pro rata share of any allowances remaining in the Auction
Subaccount. Each unit's pro rata share will be calculated pursuant to
regulations to be promulgated under subpart B.
(2) Allowances contributed from others. At the conclusion of each
auction, the Administrator will return unsold allowances to the
appropriate offerors' Allowance Tracking System accounts. Any unsold
allowances that were offered with the same specified minimum price will
be distributed according to each such offeror's pro rata share of all
such allowances offered.
[56 FR 65601, Dec. 17, 1991, as amended at 61 FR 28763, June 6, 1996; 63
FR 5735, Feb. 4, 1998; 63 FR 51766, Sept. 28, 1998]
[[Page 164]]