HomeMy WebLinkAboutI-4 Staff Report - Greenhouse Gas Allowance Auction ReportUB CONSENT ITEM
I-4
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: MANNY ROBLEDO, DIRECTOR OF UTILITIES
DATE: JULY 20, 2020
SUBJECT: RESULTS OF THE CALIFORNIA AIR RESOURCES BOARD’S MAY 20, 2020
AUCTION OF GREENHOUSE GAS ALLOWANCES
BACKGROUND:
The Assembly Bill 32 based “Cap-and-Trade” Program requires that every year California Air
Resources Board (CARB) or its agent conduct quarterly public auctions of the greenhouse gas
(GHG) allowances (Allowances). Entities with GHG compliance responsibility or entities desiring
to engage in trading can buy needed Allowances or sell excess of such in the auctions. Azusa Light
& Water participated in the May 20, 2020 GHG auction, which yielded the sale of 49,529 GHG
allowances and received proceeds of $826,143.72 for use in the reduction of greenhouse gases
pursuant to the CARB Cap and Trade program.
RECOMMENDATION:
Staff recommends the Utility Board take the following action:
1)Receive and file Staff’s report on results of the May 20, 2020 GHG Allowance
auction.
ANALYSIS:
CARB regulations forbid informing or discussing with anyone (including public forums) an entity’s
intent to participate in GHG auctions or its auction bid/offer strategy. In light of that regulatory
requirement, Staff reports auction outcome to the Board once the California Air Resources Board
makes the auction results public. Consistent with the above and the Utility Board’s understanding
and approval of GHG auction rules, Staff reports Azusa’s participation in the May 20, 2020 auction
of 2020 Greenhouse Gas (GHG) Allowances:
APPROVED
UTILITY BOARD
7/20/2020
Results of May 20, 2020 GHG Allowance auction
July 20, 2020
Page 2
The May 20, 2020 auction took place as scheduled; 57,540,731 of “current vintage” (2017 and
2020) Allowances and 8,672,250 2023 vintage Allowances were offered. CARB reported that the
auction clearing price at which all bought and sold allowances transacted was $16.68/Allowance.
CARB further reported that 98.8% of the buyers were Compliance Entities (entities with GHG
compliance responsibilities under AB32).
Azusa offered 60,000 Allowances, and 49,529 Allowances sold for a total $826,143.72.
FISCAL IMPACT:
There is no operating or capital budget impact. Proceeds from the auction will be deposited in
Azusa’s California Climate Change Fund (Fund 23) and will be disbursed in accordance with
applicable CARB rules and regulations.
Prepared by: Reviewed and Approved:
Richard Torres Manny Robledo
Assistant Director – Resource Management Director of Utilities
Reviewed and Approved:
Sergio Gonzalez
City Manager