Or. Admin. Code § 340-253-1040 - Credit Clearance Market
(1) If a regulated
party did not retire sufficient credits to meet its compliance obligation under
OAR 340-253-1030(1)
- (6), exclusive of any deficits carried forward to the next compliance period
under OAR 340-253-1030(4),
it must enter and purchase its pro-rata share of credits in the credit
clearance market under section (5).
(a) The
credit clearance market is separate from the normal year-round market
opportunities for parties to engage in credit transactions.
(b) DEQ will consider a regulated party in
compliance with OAR 340-243-1030 if it acquires its pro-rata obligation in the
credit clearance market and retires that number of credits within 30 days of
the end of the credit clearance market.
(2) The maximum price for the credit
clearance market will be:
(a) $200 per credit
for the markets held upon the submission of the annual reports for
2017.
(b) For markets held upon
submission of annual reports in 2018 and thereafter DEQ shall adjust the
maximum price for the credit clearance market annually for inflation at the end
of each January using the inflation rate as provided by the last twelve months
of data from the US Bureau of Labor Statistics West Region Consumer Price Index
for All Urban Consumers for All Items. The formula for that adjustment is as
follows: maximum price = [Last year's maximum price] * (1 + [CPI-U West]). DEQ
will publish the new maximum price on its webpage each year.
(3) Acquisition of credits in the
credit clearance market. The credit clearance market will operate from June 1
to July 31.
(a) Regulated parties subject to
section (1) must acquire their pro-rata share of the credits in the credit
clearance market calculated in section (5).
(b) A regulated party may only use credits
acquired in the credit clearance market to retire them against its unmet
compliance obligation from the prior year.
(c) To qualify for compliance through the
credit clearance market, the regulated party in question must have:
(A) Retired all credits in its possession;
and
(B) Have an unmet compliance
obligation for the prior year that has been reported to DEQ through submission
of its annual report in the CFP Online System.
(4) Selling credits in the clearance market.
(a) On the first Monday in April each year,
DEQ shall issue a call to all eligible registered parties in the CFP Online
System to pledge credits into the credit clearance market, or will issue a
notification that it will not hold a credit clearance market that year.
Registered parties are eligible to sell credits in the clearance market if they
will have excess credits upon the submission of their annual report. Parties
wanting to pledge credits into the credit clearance market will notify DEQ by
April 30. DEQ will announce if a clearance market will occur by May
15.
(b) In order to participate in
the credit clearance market, sellers must:
(A)
Agree that they will sell their credits for no higher than the maximum price as
published by DEQ for that year;
(B)
Agree to withhold any pledged credits from sale in any transaction outside of
the credit clearance market until the end of the credit clearance market on
July 31, or if no clearance market is held in a given year, then on the date
which DEQ announces it will not be held;
(C) Not reject an offer to purchase the
credits at the maximum price for that year as published by DEQ, unless the
seller has already sold or agreed to sell those pledged credits to another
regulated party participating in the credit clearance market; and
(D) Agree to replace any credits that the
seller pledges into the clearance market if those credits are later found to be
invalid by DEQ due to fraud or non-compliance by the generator of the credit,
unless the buyer of the credits was a party to that fraud or
non-compliance.
(5) Operation of the credit clearance market.
Prior to June 1, DEQ will inform each regulated party that failed to meet its
annual compliance obligation under OAR
340-253-1030 of its pro-rata
share of the credits pledged into the credit clearance market.
(a) Calculation of pro-rata shares.
(A) Each regulated party's pro-rata share of
the credits pledged into the credit clearance market will be calculated by the
following formula:
Regulated Party A's pro-rata share =
(A's total deficit / All parties' total deficits) X (the lesser of [pledged credits] or [All parties' total deficits])
(i) "Total
deficit" refers to the regulated party's total obligation for the prior
compliance year that has not been met under OAR
340-253-1030;
(ii) "All parties' total deficit" refers to
the sum of all of the unmet compliance obligations for regulated parties in the
credit clearance market; and
(iii)
"Pledged credits" refers to the sum of all credits pledged for sale into the
credit clearance market.
(B) If there is at least one large importer
of finished fuels participating in the credit clearance market, DEQ will
determine the pro-rata share of the available credits in two phases.
(i) The first phase will begin with all of
the credits pledged into the credit clearance market and the deficits from
large importers of finished fuels in place of "all parties' total deficit" in
(5)(a)(A)(ii).
(ii) The second
phase will begin with the remainder of the pledged credits into the credit
clearance market in place of "pledged credits" in (5)(a)(A)(iii) and the
deficits from all other regulated parties in place of "all parties' total
deficit" in (5)(a)(A)(ii).
(iii)
The calculation for each phase will be done as in paragraph (A).
(b) On or before June
1, DEQ will post the name of each party that is participating in the credit
clearance market as a buyer, and the name of each party that is participating
as a seller in the market and the number of credits they have pledged into the
market.
(c) Following the close of
the credit clearance market, each regulated party that was required to
purchased credits in the credit clearance market must submit an amended annual
compliance report in the CFP Online System by August 31 which shows the
acquisition and retirement of its pro-rata share of credits purchased in the
credit clearance market, and any remaining unmet deficits.
(6) If a regulated party has unmet deficits
upon the submission of the amended annual report, DEQ will increase the
regulated party's number of unmet deficits by five percent and the total unmet
deficits will be carried over into the next compliance period for that
regulated party.
(7) If the same
regulated party has been required to participate in two consecutive credit
clearance markets and carries over deficits under section (6) in both markets,
DEQ will conduct a root cause analysis into the inability of that regulated
party to retire the remaining deficits.
(a) If
multiple regulated parties are subject to this section in a single year, DEQ
may produce a single root cause analysis for those regulated parties if it
determines the same general set of causes contributed to those parties'
inability to retire those deficits. DEQ will also analyze whether there were
specific circumstances for the individual parties.
(b) Based on the results of the root cause
analysis, DEQ may issue a deferral under OAR
340-253-2000(6)(c)(A) through
(C) or craft a remedy that addresses the root
cause or causes. The remedy cannot:
(A)
Require a regulated party to purchase credits for an amount that exceeds the
maximum price for credits in the most recent credit clearance market;
or
(B) Compel a registered party to
sell credits.
Notes
Statutory/Other Authority: ORS 468.020, 468A.266, 468A.268 & 468A.277
Statutes/Other Implemented: ORS 468.020 & ORS 468A.265 through 468A.277
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