Cal. Code Regs. Tit. 17, § 95871 - Disposition of Allowances from Vintage Year 2021 and Beyond

(a) Allowance Price Containment Reserve. The Executive Officer shall transfer the number of California GHG allowances from budget years 2021 to 2031 to the Allowance Price Containment Reserve as specified in Table 8-2.

(b) Advance Auction. The Executive Officer shall transfer 10 percent of the allowances from budget years 2021 and beyond to the Auction Holding Account.

(1) These allowances will be eligible to be sold pursuant to section 95910(c)(2).

(2) All Advance Auction allowances not sold pursuant to section 95910(c)(2) will be auctioned pursuant to section 95910.

(3) The proceeds from the sale of these allowances will be deposited into the Greenhouse Gas Reduction Fund created pursuant to Government Code section 16428.8, and will be available for appropriation by the Legislature for the purposes designated in California Health and Safety Code sections 38500 et seq. and consistent with the requirements of Chapter 4.1 (commencing with Section 39710) of Part 2 of Division 26 of the California Health and Safety Code and Article 9.7 (commencing with Section 16428.8) of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code.

(c) Electricity Related Allocation.

(1) Electrical Distribution Utility Sector Allocation for Budget Years 2021 through 2030. Allowance amounts allocated to each eligible electrical distribution utility will be determined pursuant to section 95892(a). The Executive Officer will allocate to the limited use holding account and/or allowance allocation holding account pursuant to sections 95892(b) and 95831(a)(6) for each electrical distribution utility by October 24, of each calendar year beginning in 2020 for allocation from the 2021 annual allowance budget and continuing through 2029 for allocation from the 2030 annual allowance budget.

(2) Allocation to Public Wholesale Water Agencies. The Executive Officer will place an annual individual allowance allocation in the allowance allocation holding account, pursuant to sections 95895 and 95831(a)(6), of a public wholesale water agency by October 24 of each calendar year beginning in 2020 for allocation from the 2021 annual allowance budget.

(d) Allocation to Industrial Covered Entities. Allowances allocated for the purposes of industry assistance shall be transferred to annual allocation holding accounts for industrial sectors listed in Table 8-1. Allowances in the annual allocation holding account are transferred to the holding account on January 1 of the vintage year of the allowances.

(1) The Executive Officer will allocate allowances to each eligible covered entity by October 24 of each calendar year beginning in 2020 for allocation from the 2021 annual allowance budget.

(2) Allocation to eligible covered entities shall be conducted using the assistance factors specified for each listed industrial activity found in Table 8-1 and the methodology set forth in section 95891.

(3) The total amount of allowances allocated for the purposes of industry assistance shall not exceed the available amount of allowances after accounting for allocations made pursuant to sections 95871(a) through (c) and sections 95871(e) and (g). If the amount calculated under the methodology set forth in section 95891 exceeds the amount of allowances available, the number of allowances available will be prorated equally across all eligible industrial covered entities. The proration will be calculated using the share of allowances available after accounting for all allocations made pursuant to sections 95871(a) through (c) and sections 95871(e) and (g) compared to total allowances that would be distributed according to the methodology set forth in section 95891.

(4) Industrial entities that purchase electricity or legacy contract qualified thermal output pursuant to a legacy contract and who receive allocation under this section shall have their allocation reduced as specified in section 95891(e).

(e) Allocation to University Covered Entities and Public Service Facilities. The Executive Officer will place an annual individual allocation in the annual allocation holding account of each eligible university covered entity and public service facility by October 24 of each calendar year beginning in 2020 for allocation from the 2021 annual allowance budget. A public service facility providing steam to a publicly owned educational facility is not eligible for any allocation of allowances provided under other provisions of this regulation. In the event a publicly owned educational facility that receives qualified thermal output from a public service facility becomes an opt-in covered entity and receives allowances for the emissions from qualified thermal output sold to the university by the public service facility pursuant to section 95891(d), the publicly owned educational facility shall unconditionally transfer to the public service facility allowances relating to the qualified thermal output provided by such public service facility. So long as the publicly owned educational facility remains an opt-in covered entity and provides such allowances to the public service facility, such public service facility will not be eligible for any disposition of allowances provided under this section.

(f) Allocation to Legacy Contract Generators. Allowances will be allocated to legacy contract generators with an industrial counterparty and legacy contract generators without an industrial counterparty pursuant to section 95894 for the term of the contract. The Executive Officer will transfer allowance allocations into each eligible generator's annual allocation holding account by October 24 of each calendar year during the term of the contract for eligible legacy contract emissions pursuant to the methodology set forth in section 95894 beginning in 2020 for allocation from the 2021 annual allowance budget.

(g) Natural Gas Supplier Sector Allocation. Allowances available for allocation to natural gas suppliers each budget year shall be calculated as set forth in section 95893. The Executive Officer will transfer allowances into each eligible natural gas supplier's allowance allocation holding account and/or limited use holding account pursuant to sections 95893(b) and 95831(a)(6) by October 24 of each calendar year beginning in 2020 for allocation from the 2021 annual allowance budget.

(h) Auction Proceeds for AB 32 Statutory Objectives. All remaining allowances not allocated for uses specified in sections 95871(a)-(g), section 95871(i), or section 95911(h) will be designated for sale at auction. The proceeds from the sale of these allowances will be deposited into the Greenhouse Gas Reduction Fund created pursuant to Government Code section 16428.8, and will be available for appropriation by the Legislature for the purposes designated in California Health and Safety Code sections 38500 et seq. and consistent with the requirements of Chapter 4.1 (commencing with Section 39710) of Part 2 of Division 26 of the California Health and Safety Code and Article 9.7 (commencing with Section 16428.8) of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code.

(i) Allocation to Waste-to-Energy Facilities. Allowances available for allocation to waste-to-energy facilities each budget year shall only be calculated as set forth in section 95891(f). The Executive Officer will place an annual individual allocation in the annual allocation holding account of each eligible waste-to-energy facility by October 24 of each calendar year beginning in 2020 for allocation from the 2021 annual allowance budget and ending in 2023 for allocation from the 2024 annual allowance budget.

Table 8-2: Number of California GHG Allowances Allocated to the APCR for Budget Years 2021 to 2030

Budget year	Number of California GHG Allowances Allocated to the APCR
2021	12,772,600
2022	11,572,600
2023	10,372,600
2024	9,272,600
2025	8,072,600
2026	6,972,600
2027	5,772,600
2028	4,572,600
2029	3,472,600
2030	2,272,600

Notes

Cal. Code Regs. Tit. 17, § 95871

1. New section filed 9-18-2017; operative 10-1-2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 38).
2. Amendment of subsections (b)(1)-(2) and (d), new subsections (d)(1)-(4), amendment of subsections (f) and (h), repealer of subsection (h)(1), new subsection (i) and amendment of Table 8-2 filed 3-29-2019; operative 3-29-2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 13).

Note: Authority cited: Sections 38510, 38560, 38562, 38570, 38571, 38580, 39600 and 39601, Health and Safety Code. Reference: Sections 38530, 38560.5, 38564, 38565, 38570 and 39600, Health and Safety Code and Section 16428.8, Government Code.

1. New section filed 9-18-2017; operative 10/1/2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 38).
2. Amendment of subsections (b)(1)-(2) and (d), new subsections (d)(1)-(4), amendment of subsections (f) and (h), repealer of subsection (h)(1), new subsection (i) and amendment of Table 8-2 filed 3-29-2019; operative 3/29/2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 13).