On January 20 the Ontario government announced its first auction of greenhouse gas allowances, set for March 22, from 1 – 4 PM Eastern Time.
Allowances offered during an auction are created under the Ontario Cap and Trade Program. Allowances may be of current vintage budget year (2017) or future vintage budget year (2020), where ‘vintage’ refers to the year for which they are created. The March 2017 Ontario Auction #1 will offer year 2017 vintage allowances in the Current Auction and year 2020 future vintage allowances in the Advance Auction.
Allowances offered for sale are as follows:
• Current Auction (2017 vintage): 25,296,367 allowances
• Advance Auction (2020 vintage) 3,116,700 allowances.
There will be a minimum Reserve Price, to be determined as the higher of the most recently published California and Québec Annual Auction Reserve Price after applying the exchange rate established for the auction.
2017 Annual Auction Reserve Prices
| Auction | CA Annual Auction Reserve Price (USD) | QC Annual Auction Reserve Price (CAD) |
| Current Auction | $13.57 | $13.56 |
| Advance Auction | $13.57 | $13.56 |
The Detailed Auction Requirements and Instructions document, at https://files.ontario.ca/detailed_auction_requirements.pdf, provides background information on the Ontario Cap and Trade Program as well as detailed requirements and instructions for participating in an auction, including:
• eligibility;
• applicant requirements;
• administrative requirements;
• submitting a bid guarantee;
• bidding; and
• a description of the process to complete auction financial settlement and transfer allowances to successful bidders’ accounts in the Compliance Instrument
For more information see “Cap and Trade Basics for Combined Heat and Power,” IPPSO FACTO, November 2016.