World Energy Solutions Inc, an operator of online exchanges for energy and environmental commodities, hopes to conduct auctions should a U.S. cap and trade market in greenhouse gases develop, its chief executive said in an interview.
If you look at typically how government customers award contracts they will weigh heavily on past experience, so I think we are well-positioned, Richard Domaleski, World Energy's CEO, said by telephone.
World Energy, whose shares were listed on the Nasdaq stock market on Monday under the ticker, is the sole conductor of auctions of permits for power plants to release carbon dioxide for the Regional Greenhouse Gas Initiative (RGGI).
The RGGI, a group of 10 eastern U.S. states, became the first U.S. entity to regulate a greenhouse gas when it began regulating carbon from power plants at the beginning of the year.
So far World Energy has conducted three quarterly auctions for RGGI, which have raised a total of about $263 million for the states.
Momentum is growing for a national cap and trade market as the House of Representatives mulls draft legislation that would set a limit on pollution from big emitters like power plants, cement makers and steel factories. Eventually, pollution from vehicles would also be regulated under the legislation.
President Barack Obama said during his campaign that he wanted the United States to auction 100 percent of the permits to emit under any federal cap and trade program. His budget proposal released in February included about $646 billion in revenues from 2012 to 2019 from a program that auctioned all of the permits.
Obama has since indicated the percentage of permits to be auctioned could be lowered to make any program more politically acceptable.
The draft legislation did not largely consider the issue of auctions.
Whether they decide to auction 1 percent or 100 percent of the allocations, you still have to put the infrastructure in place, which we provide and we're the only company ... that has put volume through in a compliance market, said Domaleski.
The company also conducts auctions for energy commodities such as natural gas and electricity markets.
World Energy has grown recently, particularly as Canada, Australia and the European Union look to use auctions to distribute greenhouse gas pollution permits instead of giving them away for free as the EU did in its initial emissions trading plan. In the past 30 months his company has grown from 20 employees to 60, Domaleski said.
(Reporting by Timothy Gardner, editing by Jim Marshall)