SUBCOMMITTEE
1. After line 94, substitute
insert
"Preexisting contractual arrangement" means a power
purchase agreement or similar commercial arrangement, including options contracts,
entered into in connection with a power generation facility subject to the RGGI
that was entered into on or before May 16, 2017, and continuing in force and
effect on July 1, 2020. "Preexisting contractual arrangement" does
not include any life-of-the-unit contractual relationship.
SUBCOMMITTEE
2. After line 134, substitute
insert
E. The Director shall establish and administer a preexisting
contractual arrangement reserve account (Reserve Account). At least once per
year, an entity may obtain allowances at a cost not exceeding 25 percent of the
previous auction price from the Reserve Account to satisfy the total allowance
obligation attributable to the preexisting contractual arrangement. Allowances
placed into the Reserve Account shall not exceed (i) 2,000,000 allowances per
year in 2021 and 2022; (ii) 1,250,000 allowances per year in 2023 and 2024,
(iii) 600,000 allowances per year in 2025; and (iv) zero allowances for 2026
and every subsequent year. If the number of available allowances does not
satisfy the requirements of every eligible entity, the Director shall make
allowances available from the Reserve Account to eligible entities pro rata
according to the allowances attributable to their preexisting contractual
arrangements that they have not yet obtained from the Reserve Account.
F. An entity with a preexisting contractual arrangement may
purchase allowances from the Reserve Account if:
1. A preexisting contractual arrangement exists and the entity
is unable to pass through or recover its RGGI costs from the counterparty or
other mechanism;
2. The number of allowances purchased from the Reserve Account
by the entity does not exceed the equivalent tons of carbon dioxide that the
entity emitted in the prior calendar year;
3. Such entity exercises any option that exists in the
preexisting contractual arrangement to renegotiate the contract to include the
cost of purchasing carbon dioxide allowances when the first opportunity to
exercise any such option occurs; and
4. Each calendar year, the carbon dioxide authorized account
representative for the compliance account makes all requests for purchase of
allowances from the Reserve Account to the Department, and the requests include
(i) a copy of the contractual arrangement if it has not been provided to the
Department previously or, if it has, a letter
certifying that the contract has not changed and (ii) a letter certifying that
the entity is unable to recover the cost of allowances through electricity
pricing or another mechanism.
G. Any allowances purchased from the Reserve Account in a year
that are in excess of the entity's equivalent tons of carbon dioxide emissions
in that year shall be forfeited by the entity and returned to the Department.
H. The Director shall require that an entity purchasing
allowances from the Reserve Account certify at least
once a year that it has made purchases of equipment or services in Virginia
during the year or has a plan to make purchases of equipment or services in
Virginia, including by any affiliated entities, equal to the value of the
discount in price of allowances purchased from the Reserve Account as
determined by the most recent auction price.