[Federal Register Volume 59, Number 53 (Friday, March 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6541]
[[Page Unknown]]
[Federal Register: March 18, 1994]
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ENVIRONMENTAL PROTECTION AGENCY
[FRL-4852-8]
Clean Air Act; Acid Rain Provisions
AGENCY: Environmental Protection Agency.
ACTION: Notice of Privately Offered Allowances for the 1994 EPA
SO2 Allowance Auctions; the 1994 Direct Sale; and the Opening of
the Allowance Tracking System Docket.
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SUMMARY: Pursuant to title IV of the Clean Air Act and 40 CFR part 73,
the EPA is responsible for implementing a program to reduce emissions
of sulfur dioxide (SO2), a precursor of acid rain. The centerpiece
of the SO2 control program is the allocation of transferable
allowances, or authorizations to emit SO2, which are distributed
in limited quantities for existing utility units and which eventually
must be held by virtually all utility units to cover their SO2
emissions. These allowances may be transferred among polluting sources
and others, so that market forces may govern their ultimate use and
distribution, resulting in the most cost-effective sharing of the
emissions control burden.
EPA is directed under section 416 of the Act to conduct annual
sales and auctions of a small portion of allowances (2.8%) withheld
from the total allowances allocated to utilities each year. Sales and
auctions are expected to stimulate and support such a market in
allowances and to provide a public source of allowances, particularly
to new units for which no allowances are allocated. In the Fall of
1992, EPA delegated the administration of the EPA allowance auctions
and sales to the Chicago Board of Trade (CBOT). The auctions and sales
will be conducted under the regulations governing the auctions and
sales which were promulgated on December 17, 1991 (40 CFR part 73,
subpart E). Today, the Acid Rain Division is giving notice of (1) the
total amount of allowances that will be auctioned in the second annual
SO2 allowance auctions, which are scheduled for March 28, 1994;
(2) the start date of the 1994 Direct Sale; and (3) the opening of a
docket to communicate information held in EPA's Allowance Tracking
System. Notice of the date of the second annual SO2 allowance
auctions was previously given in the February 2, 1994 Federal Register,
cite 59 FR 4919.
Auctions. Anyone can participate in the EPA auctions, and bidders
are not restricted as to the quantity or price of their bid. Allowances
sold at the auctions will be sold to the highest bidder until no
allowances remain. The 1994 auctions will consist of one ``spot''
auction and two ``advance'' auctions. Allowances sold in the spot
auction are usable for compliance beginning in 1995. Allowances sold in
the 6-year advance auction are useable for compliance beginning in
2000; allowances sold in the 7-year advance auction are useable for
compliance beginning in 2001. The 6-year advance auction will sell the
unsold allowances from the 1993 Direct Sale. The Act directs EPA to
sell in the 1994 auctions any spot or advance allowances that are
offered by any Phase I or Phase II utility. However, offered will be
sold after the allowances that were withheld from the utilities, so
offered allowances will consequently be sold at a lower price than the
withheld allowances. Owners of offered allowances may set a minimum
price for their allowances. The number of withheld allowances and
offered allowances that are being sold in the 1994 auctions are listed
in the table below. Bid Forms for the 1994 auctions must be received by
the CBOT by the close of business on March 22, 1994.
Allowances To Be Sold in the 1994 Auctions
------------------------------------------------------------------------
6-year 7-year
Spot advance advance
auction auction auction
Origin of allowances (first (first (first
useable useable useable
1995) 2000) 2001)
------------------------------------------------------------------------
EPA.............................. 50,000 ........... 100,000
1993 direct sale................. ........... 25,000 ...........
Offered.......................... 58,001 50,000 47,000
Total.......................... 108,001 75,000 147,000
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Direct Sale. Anyone can participate in the EPA Direct Sale, and
buyers are not restricted as to the quantity of their purchase request.
The 1994 Direct Sale will consist of one ``advance'' sale in which
25,000 allowances, first useable beginning in the year 2001, will be
available for purchase. These allowances will be sold for $1,677.88
each (this amount reflects the $1,500 required price adjusted annually
for inflation). The 1994 Direct Sale will run from June 1, 1994 to
January 31, 1995. EPA will accept Direct Sale Application Forms during
this time period. Buyers should not send payment with their form; after
EPA receives a Direct Sale Application Form, it will convey, in
writing, the exact price for allowances and payment instructions.
Allowances from the Direct Sale will be sold on a first come, first
served basis.
Allowance Tracking System Information Docket. A docket titled
``Allowance Tracking System Information,'' Docket number A-94-17, has
been opened to hold summary information from the Allowance Tracking
System for public viewing and copying. The Docket is located in room
1500 Waterside Mall, 401 M St., SW., Washington, DC 20460. Information
will be available in the Docket beginning Monday, March 21, 1994.
ADDRESSES: U.S. EPA Acid Rain Division (6204J), Attn: Auctions and
Sales, 401 M St., SW., Washington, DC 20460. Chicago Board of Trade,
141 W. Jackson Blvd., suite 2240, Attn: EPA Auctions, Chicago, IL
60604.
Forms needed to participate in the EPA auctions and Direct Sale are
available from the Acid Rain Hotline at (202) 233-9620.
FOR FURTHER INFORMATION CONTACT: Information on bidding in the 1994 EPA
auctions can be found in the brochure ``How to bid in the EPA SO2
Allowance Auctions;'' general informatin on the EPA auctions and sales
can be found in the ``Acid Rain Program Allowance Auctions and Direct
Sales'' fact sheet. These publications can be obtained by calling the
Acid Rain Hotline at (202) 233-9620 or by writing to EPA at the address
listed above.
Dated: March 15, 1994.
Brian J. McLean,
Director, Acid Rain Division.
[FR Doc. 94-6541 Filed 3-17-94; 8:45 am]
BILLING CODE 6560-50-M
