[Federal Register Volume 59, Number 22 (Wednesday, February 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-2355]


[[Page Unknown]]

[Federal Register: February 2, 1994]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-4832-7]

 

Clean Air Act; Acid Rain Provisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of the 1994 EPA SO2 Allowance Auctions.

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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. In addition, 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. Today, the Acid Rain Division is giving notice of the second 
annual SO2 allowance auctions. The regulations governing the 
auctions and sales were promulgated on December 17, 1991 (40 CFR part 
73, subpart E).
    EPA has delegated the administration of the EPA allowance auctions 
to the Chicago Board of Trade (CBOT). The auctions will be conducted 
under the regulations cited above. 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 useable 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. 25,000 allowances 
will be sold in the 6-year advance auction, which are the unsold 
allowances from the 1993 direct sale. 50,000 spot allowances will be 
sold in the spot auction and 100,000 allowances will be sold in the 7-
year advance auction. Bid Forms for the 1994 auctions must be received 
by the CBOT by the close of business on March 22, 1994. The auctions 
themselves will be conducted on March 28, 1994, with the results 
announced the next day.
    CBOT will also sell in the 1994 auctions any spot, 6-year advance, 
or 7-year advance allowances that are offered by others holding 
allowances in EPA's Allowance Tracking System. However, offered 
allowances 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. To offer allowances in 
the EPA auctions, owners of allowances must submit an SO2 
Allowance Offer Form to EPA by the close of business on March 11, 1994. 
The auction and sale regulations require that offer forms be received 
by EPA no later than 15 business days prior to the date of the 
auctions, which would be March 4, 1994. However, this year, the date 
that offer forms must be received by EPA is being extended to March 11, 
1994 due to the delay in the opening of the Allowance Tracking System. 
This extension will not be implemented permanently and only applies to 
the 1994 auctions.

ADDRESSES:

 U.S. EPA Acid Rain Division (6204J), Attn: Auctions and Sales, 401 M 
St., SW., Washington, DC 20460.

Chicago Board of Trade, Attn: EPA Auctions, 141 W. Jackson Blvd., suite 
2240, Chicago, IL 60604.

    Forms needed to participate in the EPA auctions will be available 
from the Acid Rain Division by February 14, 1994. To obtain forms, call 
the Acid Rain Hotline at (202) 233-9620.

FOR FURTHER INFORMATION: Information on bidding in the 1994 EPA 
auctions can be found in the brochure ``How to Bid in the EPA SO2 
Allowance Auctions, Second Annual Auctions--March 28, 1994;'' general 
information on the EPA auctions 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 or by writing to EPA 
at the address listed above.

    Dated: January 25, 1994.
Brian J. McLean,
Director, Acid Rain Division.
[FR Doc. 94-2355 Filed 2-1-94; 8:45 am]
BILLING CODE 6560-50-P