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CCAs fall to $19 amid conflicting nuclear plant reports
SAN FRANCISCO |
SAN FRANCISCO Aug 3 (Reuters Point Carbon) - California carbon allowances (CCAs) for delivery in 2013 fell as low as $18 per tonne this week, but rebounded to $19 on Thursday after the owner of a key nuclear plant discredited a report that the plant could restart later this year.
Last week, CCAs finished at $20/t.
CCA prices have been supported by the shutdown of the carbon-free San Onofre nuclear power plant in Orange County, which is majority-owned by Southern California Edison (SCE), the largest emitting utility in the state.
The plant's Unit 3 generator was taken offline after a small radiation leak was discovered on Jan. 31. The plant's only other unit was offline for maintenance at the time the leak was discovered and has remained inactive since.
On Monday, the Associated Press reported that both of the plant's units could be restarted by the end of the year, citing documents filed by SCE with state power regulators last month.
That news sent carbon prices down as much as $2 from last week's high of $20/t, sources said.
But during an earnings call on Tuesday, SCE Chief Executive Ted Craver clarified that there is no timeline for restart of the 2,150 MW plant, and SCE officials said the company only submitted restart dates because it was required to do so.
A restart of the troubled plant will require the approval of the U.S. Nuclear Regulatory Commission, Craver said.
That prompted a rebound in CCA prices, one broker said Thursday.
"What brought prices down was the announcement that it was coming back by 2012, and then SCE came out saying they don't have a specific timeline," the broker said. "So it sold off to $18 and then popped back up to $19."
A total of 171,000 CCA forward contracts traded on the IntercontinentalExchange (ICE) this week, less than half the previous week's number, as some market participants are taking summer vacations, sources said.
An additional 50,000 CCAs traded as part of a $20/t call option with a $3.15 premium.
A small number of offset credits derived from the destruction of agricultural methane emissions also changed hands for $8.40 per credit this week, according to market sources.
California will count those credits for compliance with the cap-and-trade program.
No trades were reported in the market for Regional Greenhouse Gas Initiative (RGGI) allowances.
RGGI permits were bid at $1.92 with an asking price of $1.95 on Thursday, unchanged from the price seen in the market throughout July. (Reporting by Rory Carroll, Editing by Bob Burgdorfer)
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