The PA Infrastructure Investment Authority and the Department of Environmental Protection, along with financial information services company Markit, announced Wednesday they have held the second “forward” auction in 2014 for the sale and purchase of nutrient credits in Pennsylvania’s Chesapeake Bay Watershed.
A “forward” auction means that the certified credits sold on June 11 will be delivered later and applied to the 2014-15 compliance years. The auction affords wastewater treatment plants and other regulated entities the opportunity to purchase credits to meet their nitrogen and phosphorus discharge limits for these compliance years.
“PennVEST’s and DEP’s commitment to helping Pennsylvania meet its nutrient discharge goals for the Chesapeake Bay watershed were further enhanced by this auction, ” PennVEST executive director Paul Marchetti said. “We continue to work together and with all parties interested in trading to create a cost-effective and useful tool for Pennsylvania communities, farmers and, most importantly, our rivers, streams and ultimately the Bay.”
PennVEST hosts the auctions to encourage the trading of nutrient credits in the Susquehanna and Potomac watersheds. DEP’s nutrient credit trading program offers a cost-effective way for facilities that are subject to nitrogen and phosphorus limits to meet those limits by working with other facilities, non-point sources or both.
Nutrient credit auctions are one of many programs in Pennsylvania that aid in the effort to protect and restore the Chesapeake Bay.
For its auctions, PennVEST is supported by Markit, which provides the platform for enrollment and eligibility, auctions and registry services. Markit provides operations and infrastructure services to environmental programs worldwide.
The auction was a two-round auction, with the first round being held in the morning and the second in the afternoon. In the first round, the following credits were bought and sold:
-- Susquehanna nitrogen, 2014: 18,000 credits for $2.27 per credit
-- Susquehanna nitrogen, 2015: 12,000 credits for $2.27 per credit
In the second round, the following credits were bought and sold:
-- Susquehanna nitrogen, 2014: 5,000 credits for $2.01 per credit
-- Susquehanna nitrogen, 2015: 5,000 credits for $2.01 per credit
PennVEST encourages the trading of nutrient credits by acting as a clearinghouse in the credit market, entering into contracts to buy and sell credits. By participating in these transactions, PennVEST provides market certainty to buyers and sellers, which encourages more activity in the market. Hosting periodic auctions is one way for PennVEST to facilitate these nutrient credit trades.
PennVEST’s next auction is scheduled for September 10. This will be a forward auction of certified credits to be applied towards meeting nutrient discharge limits during the 2014-15 compliance years. The enrollment period for that auction is expected to begin on July 14 and close on August 6.
For more information, visit the PennVEST Nutrient Credit Trading or DEP’s Chesapeake Bay Program webpages or call 717-783-4493.
