The Auction Reserve Price is a predetermined minimum price at which allowances will be sold to auction participants.
The Auction Reserve Price for vintage 2013 allowances auctioned in 2012 was $10 per allowance. For Advance Auctions conducted in 2012, the Reserve Price was $10 per allowance for vintage 2015 allowances.
The Auction Administrator announces the Auction Reserve Price for auctions to be conducted the following calendar year on the first day in December that is a business day in California. The Reserve Price is stated in U.S. dollars.
The Auction Administrator calculates the Auction Reserve Price using the following procedure:
(A) The Auction Reserve Price in U.S. dollars will be the U.S. dollar Auction Reserve Price for the previous calendar year increased annually by 5 percent plus the rate of inflation as measured by the most recently available twelve months of the Consumer Price Index for All Urban Consumers.
(B) Auction Reserve Price will be announced prior to the opening of the auction window on the day of the auction at 10 a.m. Pacific Standard Time (or Pacific Daylight Time when in effect), and will be in effect until the window closes at 1 p.m. Pacific Standard Time (or Pacific Daylight Time when in effect).
Pursuant to the foregoing rules, 2013 Annual Auction Reserve Price Notice issued by the California Air Resources Board on December 3, 2012 specified the 2013 auction reserve price at $10.71 for allowances to be auctioned in 2013 for the quarterly auctions as part of the current auction (2013 vintage allowances) and advance auction (2016 vintage allowances).
No allowances can be sold at bids lower than the Auction Reserve Price.
It is noteworthy that Californian Auction Platform will accept bids lower than the reserve price during the bidding window, however, bids lower than the auction reserve price will be rejected during settlement.
So, the parameters for 2013 Auction Data are as follows:
Auction Reserve Price
$10.71
Number of allowances to be auctioned in 2013 (2013 Vintage)
57,628,254
Number of advance allowances to be auctioned in 2013 (2016 Vintage)
38,240,000