Ontario's Cap and Trade Auction Results

Ontario's Cap and Trade Auction Results

100% of Ontario's Offset Credits were sold in the first auction of 2017.
April 4, 2017

Ontario held the first auction for it's Cap and Trade program on March 22, 2017 and the results were much better than expected. The results were released publicly April 3rd, 2017 and it indicated that all 25 Million allowances were purchased by capped market participants at a settlement price of $18.08 per allowance. 

Natural gas users can be optimistic as the majority of the credits were sold at a price near the settlement floor. However, many of the credits were sold well above floor pricing and if those were purchased by local utilities we will see the result of that pricing change on our July QRAM rates.

In reviewing the numbers we see that only 26% of credits allocated for 2020 were purchased. As expected, this stems from a fear of the programs longevity. We have seen major issues with the Cap and Trade Auctions in California and Quebec and we can only speculate that many in the industry are questioning the Cap and Trade approach. 

Going forward we have now injected over $400 Million into the Ontario Governments' climate change fund. As rate payers for the new program and fund, we can only hope that the money injected into this program will help Ontario's economy and work to reduce our ever growing energy costs. 

 

Auction Results:

https://files.ontario.ca/summary_results_report_english_2017-03-31.pdf

 

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