UPDATE 3-U.S. EPA auctions SO2 allowances for $79.7 million

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NEW YORK, March 27 (Reuters) - The U.S. Environmental Protection Agency auctioned sulfur dioxide allowances for $79.7 million, the federal agency said in a report Tuesday.

The auctions were for 125,000 allowances for 2007 and 125,000 allowances for 2014. Each allowance permits the holder to emit one ton of SO2.

"There were no surprises. The price of the current vintage was neutral. We were trading at $445 before the EPA released the results and the weighted average came in at $444," said Peter Zaborowsky, Managing Director at energy broker Evolution Markets LLC of White Plains, New York.

"The future auction was a bit bullish but that market is more illiquid. There are not a lot of companies that deal in allowances that far out," Zaborowsky noted.

The winning bidders in the spot auction included subsidiaries of Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) ($22.2 million), Koch Supply & Trading ($13.4 million), Saracen Energy ($6.8 million), TransAlta Corp. TA.TO ($4.5 million), South Carolina Public Service Authority ($3.3 million), Alpha ($2.2 million), Constellation Energy Group Inc. (CEG.N: Quote, Profile, Research, Stock Buzz) ($1.1 million) and Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz) ($1.1 million).

The winning bidders for the 2014 auction included American Electric Power Co Inc. (AEP.N: Quote, Profile, Research, Stock Buzz) ($16.0 million), DTE Energy Co. (DTE.N: Quote, Profile, Research, Stock Buzz) ($5.4 million), and Cantor Fitzgerald ($1.8 million).

In the spot 2007 auction, the weighted average price was $444.39 per allowance, with a high bid of $1,120 by an environmental organization and a clearing bid of $433.25. The clearing bid was the lowest successful bid.

In the spot 2013 auction, the weighted average price was $193.35 per allowance, with a high bid of $400 and a clearing bid of $176.