Monday, October 15, 2007

Maryland Proposes 90% Auction Of CO2 Allowances

They get it 9/10's right.

From Dow Jones via CNN Money:

Maryland has proposed auctioning 90% of carbon dioxide allowances to the state's power plants under the Regional Greenhouse Gas Initiative, an agreement among 10 Northeastern states to limit global warming emissions from the power sector.

An auction would add at least tens of millions of dollars in annual costs to the balance sheets of Constellation Energy Group Inc. (CEG) and Mirant Corp. ( MIR), the state's two largest power plant owners. The two companies would be forced to buy most of the allowances needed to offset emissions from their large coal-burning power plants, instead of getting them for free from the government.

Maryland said it would consider a lower auction level if "additional analyses or public comments clearly demonstrate that a phased auction process is needed to ensure that the auction process will not lead to concerns over reliability or to increase cost to consumers," according to a draft of the proposal released last week by the Maryland Department of the Environment....MORE

We like Matthew Dalton's nose for news, he's very good on the oil markets.