[Federal Register Volume 63, Number 27 (Tuesday, February 10, 1998)]
[Notices]
[Page 6755]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3320]



[[Page 6755]]

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ENVIRONMENTAL PROTECTION AGENCY

[FRL-5964-5]


Clean Air Act; Acid Rain Provisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of the 1998 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 auctions 
of a small portion of allowances (2.8%) withheld from the total 
allowances allocated to utilities each year. 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 sixth annual SO2 allowance auctions. The 
regulation governing the auctions was 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 regulation 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 1998 auctions will consist of 
one ``spot'' auction and one ``advance'' auction. Allowances sold in 
the spot auction are useable for compliance beginning in 1998. 
Allowances sold in the 7-year advance auction are useable for 
compliance beginning in 2005. 150,000 allowances will be sold in the 
spot auction and 125,000 allowances will be sold in the 7-year advance 
auction. Bid Forms for the 1998 auctions must be received by the CBOT 
by the close of business on March 17, 1997. The auctions themselves 
will be conducted on March 23, 1998, with the results announced on 
March 25.
    CBOT will also sell in the 1998 auctions any spot 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 a SO2 Allowance Offer Form to EPA by 
the close of business on March 2, 1998. The auction regulation requires 
that offer forms be received by EPA no later than 15 business days 
prior to the date of the auctions.

ADDRESSES:
Regular mail: U.S. EPA Acid Rain Division (6204J), Attn: Auctions, 401 
M St., S.W., Washington, DC 20460.
Overnight mail: US EPA Acid Rain Division (6204J), Attn: Auctions, 501 
3rd Street, N.W., Washington, DC 20001.
Chicago Board of Trade, Attn: EPA Auctions, 141 W. Jackson Blvd., Suite 
2240, Chicago, IL 60604.

FOR FURTHER INFORMATION: Information on bidding in the 1998 EPA 
auctions can be found in the brochure ``How to Bid in the EPA 
SO2 Allowance Auctions, Sixth Annual Auctions--March 23, 
1998''; general information on the EPA auctions can be found in the 
``Acid Rain Program Allowance Auctions'' fact sheet. These 
publications, as well as the forms needed to participate in the EPA 
auctions, can be obtained by calling the Acid Rain Hotline at (202) 
564-9620, by writing to EPA at the address listed above, or by 
accessing the Acid Rain Program home page at http://www.epa.gov/
acidrain.

    Dated: January 28, 1998.
Janice K. Wagner,
Acting Director, Acid Rain Division.
[FR Doc. 98-3320 Filed 2-9-98; 8:45 am]
BILLING CODE 6560-50-P