A. The Department shall administer the Long Term Contract Set-aside Account in accordance with the procedures of this regulation.
B. A long term contract applicant may purchase allowances from the Long Term Contract Set-aside Account through direct sale from the Department at the long term contract price if:
(1) A long term contract with the applicant for the electrical output of its budget units has been in existence since January 1, 2001; and
(2) The applicant is unable to recover the cost of purchasing allowances through electricity pricing or other mechanism.
C. The number of allowances purchased from the Long Term Contract Set-aside Account by an applicant may not exceed the equivalent tons of CO2 that the applicant emits in the prior calendar year.
D. To remain eligible to purchase allowances from the Long Term Contract Set-aside Account through direct sale from the Department, the applicant shall renegotiate the long term contract to include the cost of purchasing CO2 allowances when the first opportunity to exercise any option in the existing contract occurs.
E. Each calendar year, the CO2 authorized account representative for the compliance account, referred to in this subtitle as the LTC applicant, shall make all requests for purchase of allowances from the Long Term Contract Set-aside Account to the Department in writing by November 15 of each year.
F. If all the allowances are not sold from the Long Term Contract Set-aside Account by the end of the calendar year, the undistributed allowances shall remain in the account. On or before January 31 of the following year, the Department shall transfer from the Consumer Energy Efficiency Account the number of allowances needed to restore the balance of the Long Term Contract Set-aside Account to 1,600,000.
G. Allowances Available for Purchase by LTC Applicants.
(1) All allowances purchased by LTC applicants in accordance with §D of this regulation shall be maintained in the CO2 budget source's compliance account and only used to demonstrate compliance for a control period.
(2) Allowances purchased by LTC applicants in accordance with §D of this regulation may not be resold.
H. The request shall include the following:
(1) A copy of the long term contract if it has not been provided to the Department previously, or if it has, a letter certifying that the contract has not changed; and
(2) A letter certifying that the LTC applicant is unable to recover the cost of allowances through electricity pricing or other mechanism.
I. Calculation of Long Term Contract Price.
(1) The Long Term Contract Price (LTCP) in calendar year 2013 shall be $1.98.
(2) The LTCP in calendar year 2014 shall be $2.00.
(3) For years subsequent to calendar year 2014, the LTCP shall be established as of the first day of each calendar year, and each calendar year thereafter, the LTCP shall be the LTCP from the previous calendar year multiplied by 1.025, rounded to the nearest whole cent.