RGGI states sold all 14.8 million allowances on offer in its latest auction on Mar. 9 for $5.25 each, a slight discount to prevailing futures prices on the secondary market.

Vintage 2015 RGGI allowance (RGA) futures for delivery this month were valued at around $5.29-5.37 on ICE on the day of the auction, while the benchmark Dec-16 contract eventually settled up 2 cents at $5.46 on Wednesday, before sliding to $5.40 the following day.

Bids for the allowances on offer in the auction, the 31st to date, ranged from $2.10 to $10.46 per unit, scheme operator RGGI, Inc. said by email.

None of the 10 million cost containment reserve (CCR) allowances available for sale were sold, as prices were well off the 2016 trigger of $8/tonne.

RGGI Inc. said 67% of the allowances on offer were purchased by compliance entities and their affiliates, while 59% were bought by compliance-oriented companies.

Both figures were below the overall 77% of allowances purchased by compliance entities and their affiliates at auctions to date.

Compliance entities and their affiliates includes firms that have a parent-subsidiary relationship with a compliance entity, are subsidiaries of a parent company that has a large interest in a compliance entity, or have substantial control over the operation of a budget source and/or responsibility for acquiring RGAs to meet compliance obligations.

Compliance-oriented entities are a subcategory of compliance entities whose purchases are primarily for compliance obligations, rather than resale or some other investment purpose.

The sale generated $77.9 million in revenue, RGGI Inc. said, with cumulative auction proceeds rising to $2.45 billion.

RGA prices have collapsed more than 40% since hitting a record $8.60 on Jan. 26 on bearish sentiment surrounding the prospects for the Clean Power Plan and liquidation of speculative long positions.

By Ben Garside – ben@carbon-pulse.com