Carbon Sequestration Incentive

1
Carbon Sequestration Incentive

• EIX calls for the creation of an incentive
  program to encourage existing and new players to
  invest in carbon capture and sequestration (CCS)
  technology.
• The goal of the program is too ease financing of
  a risky capital intensive technology.
• Improve on bonus allowance allocations, by
  eliminating allowance price risk.
• Build on the success of the wind Production Tax
  Credit (PTC).
• Federal guarantee of revenue either as cash
  payments or a PTC.
• 10 year term of payment
• Reduce financing cost through accelerated
  depreciation
• Federal Department of Energy (or appropriate
  agency) takes title to and liability for
  long-term storage of CO2 from selected projects.
  
• Auction revenues fund payment for CO2 captured
  and geologically sequestered.
• Program size limited to funding stream created by
  BingamanSpecter CCS bonus allowances
• CCS Bonus allowances monetized in auction and
  used to back Federal payments
• Incentive payment per ton is calculated using
  either a
• Regional marginal emission rate at a level that
  makes the CCS unit competitive, from a marginal
  cost standpoint, with a combined cycle natural
  gas generator.
• Reverse auction where 10 year Federal fixed price
  contracts are awarded to the lowest offered cost
  of sequestration.
• To Qualify
• Project put in service before 2035.