Md. Code Regs. 26.09.02.07

Current through Register Vol. 51, No. 22, November 1, 2024

Section 26.09.02.07 - Long Term Contract Set-aside Account

A. The Department shall administer the Long Term Contract Set-aside Account in accordance with the procedures of this regulation.

B. A long term contract applicant may purchase allowances from the Long Term Contract Set-aside Account through direct sale from the Department at the long term contract price if:

(1) A long term contract with the applicant for the electrical output of its budget units has been in existence since January 1, 2001; and

(2) The applicant is unable to recover the cost of purchasing allowances through electricity pricing or other mechanism.

C. The number of allowances purchased from the Long Term Contract Set-aside Account by an applicant may not exceed the equivalent tons of CO₂ that the applicant emits in the prior calendar year.

D. To remain eligible to purchase allowances from the Long Term Contract Set-aside Account through direct sale from the Department, the applicant shall renegotiate the long term contract to include the cost of purchasing CO₂ allowances when the first opportunity to exercise any option in the existing contract occurs.

E. Each calendar year, the CO₂ authorized account representative for the compliance account, referred to in this subtitle as the LTC applicant, shall make all requests for purchase of allowances from the Long Term Contract Set-aside Account to the Department in writing by November 15 of each year.

F. If all the allowances are not sold from the Long Term Contract Set-aside Account by the end of the calendar year, the undistributed allowances shall remain in the account. On or before January 31 of the following year, the Department shall transfer from the Consumer Energy Efficiency Account the number of allowances needed to restore the balance of the Long Term Contract Set-aside Account to 1,600,000.

G. Allowances Available for Purchase by LTC Applicants.

(1) All allowances purchased by LTC applicants in accordance with §D of this regulation shall be maintained in the CO₂ budget source's compliance account and only used to demonstrate compliance for a control period.

(2) Allowances purchased by LTC applicants in accordance with §D of this regulation may not be resold.

H. The request shall include the following:

(1) A copy of the long term contract if it has not been provided to the Department previously, or if it has, a letter certifying that the contract has not changed; and

(2) A letter certifying that the LTC applicant is unable to recover the cost of allowances through electricity pricing or other mechanism.

I. Calculation of Long Term Contract Price.

(1) The Long Term Contract Price (LTCP) in calendar year 2012 shall be $1.93.

(2) For years subsequent to calendar year 2012, the LTCP shall be established as of the first day of each calendar year, and shall be calculated as follows:

The LTCP for a given year shall be the LTCP for the immediately preceding calendar year multiplied by the quotient of the sum of one plus the difference of the CPI for the given year minus the CPI for the immediately preceding calendar year divided by the CPI for the immediately preceding calendar year,

LTCP(2012+n) = LTCP(2012+(n-1)) x {1+[CPI(2012+n) " CPI(2012+(n-1))]/CPI(2012+(n-1))].

(a) "n" means the number of years since 2012;

(b) "CPI("amp;brvbar;)" means the CPI for the year determined by the calculation within the parentheses; and

(c) "LTCP("amp;brvbar;)" means the LTCP for the year determined by the calculation within the parentheses.

Md. Code Regs. 26.09.02.07

Regulation .07 amended effective January 21, 2013 (40:1 Md. R. 22)
Regulation .07N amended effective August 6, 2012 (39:15 Md. R. 964); amended effective 45:26 Md. R. 1249, eff. 12/31/2018