The bill amends the Climate Commitment Act to enhance auction price containment mechanisms and establish a framework for market analysis related to compliance instruments. A new section is added to require the Department of Ecology to analyze and forecast compliance instrument markets, including pricing trends and market activities. Additionally, the bill modifies existing regulations regarding auction floor prices and the allowance price containment reserve, mandating that a minimum of two percent of allowances be reserved for the years 2023 through 2026, and between two to five percent from 2027 to 2040. The department is also tasked with adjusting the schedule of allowance allocations to ensure effective price containment in anticipation of linking with other jurisdictions.

Further amendments include setting a price ceiling for compliance instruments at $80 for the year 2026, with provisions for annual increases tied to the reserve auction floor price. The bill stipulates that if the department enters into linkage agreements with other jurisdictions, it may adjust the price ceiling accordingly. It also establishes a price ceiling unit emission reduction investment account to manage funds from the sale of price ceiling units, ensuring that these funds are used for real and verifiable emissions reductions. The bill includes a severability clause to maintain its validity even if certain provisions are found invalid.

Statutes affected:
Original Bill: 70A.65.150, 70A.65.070, 70A.65.110