(1) NYSERDA will establish and administer the energy efficiency and clean energy technology account pursuant to 21 NYCRR Part 507.

(2) The department will allocate most of the CO₂ Budget Trading Program base budget or adjusted budget to the energy efficiency and clean energy technology account.

(3) NYSERDA will administer the energy efficiency and clean technology account so that allowances will be sold in a transparent allowance auction or auctions. The proceeds of the auction or auctions will be used to promote the purposes of the energy efficiency and clean energy technology account and for administrative costs associated with the CO₂ Budget Trading Program. The auction will be carried out to achieve the following objectives: achieve fully transparent and efficient pricing of allowances; promote a liquid allowance market by making entry and trading as easy and low-cost as possible; be open to participation by the categories of bidders determined by NYSERDA or its designee in consultation with the Auction Advisory Committee which meet the minimum financial requirements; monitor for and guard against the exercise of market power and market manipulation; be held as frequently as is needed to achieve design objectives; avoid interference with existing allowance markets; align well with wholesale energy and capacity markets; and be designed to not act as a barrier to efficient investment in relatively clean existing or new electricity generating sources.

(1) The department shall allocate CO₂ CCR allowances in the following manner:

(2) As set forth in 21 NYCRR Part 507, NYSERDA or its agent shall follow these rules for the sale of CO₂ CCR allowances:

(3) NYSERDA or its agent shall implement the reserve price in the following manner:

(1) The department shall convert and transfer any CO₂ allowances that have been withheld from any auction(s) by NYSERDA or its agent pursuant to 21 NYCRR Part 507 into the New York State ECR account. The ECR withholding is for the purpose of additional emissions reductions in the event of lower than anticipated emissions reduction costs.

(2) If the necessary condition in 21 NYCRR Part 507 is met at an auction, then the maximum number of CO₂ ECR allowances that NYSERDA or its agent will withhold from that auction will be equal to the quantity shown in Table 7 minus the total quantity of CO₂ ECR allowances that have been withheld from any prior auction(s) in that calendar year. Any CO₂ ECR allowances withheld from an auction by NYSERDA or its agent will be transferred into the New York State ECR account.

(3) Allowances that have been transferred into the New York State ECR account shall be retired.

(4) NYSERDA or its agent shall follow these rules for the withholding of CO₂ ECR allowances from an auction:

(1) The department will open and manage a general account for the voluntary renewable energy market and eligible biomass set-aside account.

(2) All submissions to the department required for the retirement of an allowance from the voluntary renewable energy market and eligible biomass set-aside account under this subdivision must be from the sponsor of a voluntary renewable energy purchase, herein referred to as the VREP applicant or the CO₂ authorized account representative for a CO₂ budget source co-firing eligible biomass.

(3) A VREP applicant or a CO₂ authorized account representative for a CO₂ budget source co-firing eligible biomass may submit a written request to the department to retire a specified number of CO₂ allowances in the voluntary renewable energy market and eligible biomass set-aside account, herein referred to as a VREEB application. A VREEB application must be submitted by the March 1st, immediately following the allocation year for which it is being made and must include information to assure that:

(4) A VREEB application regarding a voluntary renewable energy purchase shall contain data documenting purchases of voluntary renewable energy that meet the requirements of this subdivision. Such data must be from reputable sources, which may include retail electricity providers, organizations that certify renewable energy products, and other parties as determined by the department. To be considered, data must be verifiable and document the following for voluntary renewable energy purchases:

(5) By the October 31st following the March 1st application deadline established in paragraph (2) of this subdivision, the department shall determine the actual MWh of voluntary renewable energy market purchases that occurred during the allocation year. The department shall retire CO₂ allowances in the voluntary renewable energy and eligible biomass set-aside account in an amount up to the number of tons of CO₂ represented by actual voluntary renewable energy market purchases, based on actual MWh purchases demonstrated by each project sponsor as follows:

CO₂ tons = MP x EF

where:

CO₂ tons, rounded down to the nearest whole ton, is the number of allowances to be placed in the retirement account.

MP is the MWh of voluntary renewable energy purchased in the State during the control period that meets the requirements of this subdivision.

EF is the CO₂ emissions factor for the control area where the electricity represented by the sale was generated.

(6) A VREEB application submitted by a CO₂ authorized account representative for a CO₂ budget source co-firing eligible biomass as a compliance mechanism shall contain the following information:

(7) If more than one VREP applicant or CO₂ authorized account representative requests the retirement of CO₂ allowances pursuant to this subdivision, and the number of CO₂ allowances that are subject to department approved requests exceeds the number of CO₂ allowances in the voluntary renewable energy market and eligible biomass set-aside account as of December 31st of the previous calendar year, the department will retire CO₂ allowances from the account for the VREP applicants and CO₂ authorized account representatives in the order in which the VREP applicants and CO₂ authorized account representatives submitted approvable retirement requests. For purposes of this paragraph, VREEB applications will be considered simultaneous if they are made in the same month. Should approvable VREEB applications in excess of the allocation to the relevant voluntary renewable energy market and eligible biomass set-aside account as of December 31st of the previous calendar year be submitted in the same month by different VREP applicants and CO₂ authorized account representatives, the department will retire CO₂ allowances for those VREP applicants and CO₂ authorized account representatives on a basis proportional to the number of CO₂ allowances requested by each VREP applicant and CO₂ authorized account representative.

(8) Flow back of undistributed CO₂ allowances from the voluntary renewable energy market and eligible biomass set-aside account. After retiring allowances pursuant to this subdivision for an allocation year, any remaining CO₂ allowances will either remain in the voluntary renewable energy market and eligible biomass set-aside account or be transferred to the energy efficiency and clean energy technology account.

(1) The department will open and manage a general account for the long term contract set-aside account for each allocation year.

(2) The sponsor for a long term contract hardship demonstration must establish a compliance account under subdivision 242-6.2(a) of this Part. All submissions to the department required for the reward of allowances from the long term contract set-aside account under this section must be from the CO₂ authorized account representative for the compliance account, herein referred to as the LTC applicant.

(3) The LTC applicant may submit a written request to the department for the reward of a specified number of CO₂ allowances in the long term contract set-aside account. This request must be submitted by the December 1st, immediately preceding the allocation year for which it is being made and must include information to assure, to the department’s satisfaction, that:

(4) The written request submitted pursuant to paragraph (3) of this subdivision shall contain, at a minimum, the following information:

(5) Except as may be modified by paragraph (6) or (9) of this subdivision, the department will determine the number of CO₂ allowances to be allocated to each LTC applicant that the department determines meets the eligibility requirements of paragraph (3) of this subdivision, in accordance with the following procedures:

LTC Allowances = (((LTCer) x (TO))/2000) -RLTCA;

where:

“LTC Allowances” are the result of the calculation;

“LTCer” is the applicable emission rate

“TO” is total net output from the LTC facility;

“RLTCA” is the number of allowances remaining in an LTC applicant’s compliance account

(6) The number of CO₂ allowances to be allocated to an eligible LTC applicant, as determined pursuant to paragraph (5) of this subdivision, shall be discounted by the department as follows, if applicable:

(7) Allowances will be allocated to the LTC applicant’s compliance account.

(8) Allowances allocated pursuant to this subdivision must only be used for compliance with the CO₂ budget emissions limitation for the source. The sale or transfer of allowances from the LTC applicant’s compliance account will be considered a violation of this subdivision.

(9) If more than one LTC applicant requests the award of CO₂ allowances and the number of CO₂ allowances that are subject to the department approved requests exceeds the number of CO₂ allowances in the relevant long term contract set-side account, the department will award CO₂ allowances for those LTC applicants on a basis proportional to the number of CO₂ allowances requested by each LTC applicant.

(10) Flow back of undistributed CO₂ allowances from the long term contract set-aside account. After allocating allowances pursuant to this subdivision for an allocation year, the department will transfer any remaining CO₂ allowances from the long term contract set-aside account to the energy efficiency and clean energy technology account.

(1) The department will open and manage a general account for the program review allowance retirement set-aside account.

(2) The allowances allocated to the program review allowance retirement set-aside account shall be deemed retired and no longer available for use under the CO₂ Budget Trading Program.