The reserve sale administrator will conduct sales from each tier in succession, beginning with the lowest priced tier and proceeding to the highest priced tier, until either all allowances are sold from the reserve or all the accepted bids are filled.
The Reserve sales window will open at 10 a.m. Pacific Standard Time (or Pacific Daylight Time, when in effect) on the day of sale, and bids may be submitted until the window closes at 1 p.m. Pacific Standard Time (or Pacific Daylight Time, when in effect).
Each bid will consist of the price, in U.S. dollars, equal to one of the three tiers and a quantity of allowances in multiples of 1,000 allowances. An entity may submit multiple bids.
The reserve sale administrator will only accept a bid for a bundle of 1,000 allowances:
(A) If acceptance of the bid would not result in violation of the
holding limit; or
(B) If acceptance of the bid would not result in a total value of accepted bids for a covered entity greater than the value of the bid guarantee submitted by the covered entity; or .
(C) If the bid entered by an entity for a tier is for a quantity less than or equal to the number of allowances available for sale in that tier.
If the sum of bids at the tier price which are accepted by the reserve sale administrator is less than or equal to the number of allowances in the tier, then:
(A) The reserve sale administrator will sell to each covered entity the number of allowances for which the entity submitted bids for that tier which were accepted by the reserve sale administrator; and
(B) If allowances remain in the tier after the above sales are completed, the reserve sale administrator will assign a random number to each bundle of 1,000 allowances for which entities submitted a bid for the tier above the current tier being sold.
Beginning with the lowest random number assigned and working in increasing order of the random numbers assigned, the reserve sale administrator will sell allowances to the bidder assigned the random number until the remaining allowances in the tier are sold or all bids have been fulfilled. The price for the allowances sold under this procedure will be the price for the tier from which they are sold, not the bid placed.
If the sum of bids accepted by the reserve sale administrator for a tier is greater than the number of allowances in the tier, the reserve sale administrator will determine the total amount to be distributed from the tier to each covered entity using the following procedure:
(A) The reserve sale administrator will calculate the share of the tier to be distributed to each bidding entity by dividing the quantity bid by that entity and accepted by the reserve sale administrator by the total quantity of bids which were accepted by the reserve sale administrator; and
(B) The reserve sale administrator will calculate the number of allowances distributed to each bidding entity from the tier by multiplying the bidding entity’s share calculated pursuant to letter 'A' above by the number of allowances in the tier, rounding the number down to the nearest whole number.
After completing the sales for each tier the reserve sale administrator will repeat the above processes for the next highest price tier until all bids have been filled or until the Reserve is depleted.