(NEW YORK, NY) The RGGI market isn’t getting off the floor. Auction prices for carbon allowances in the northeastern compact has been at or below the minimum reserve for two full years, and the number of bidders participating in RGGI has dropped to just a quarter of what it used to be.

The latest quarterly auction, held last week, sold just 53% of the available allowances put up for sale by the nine states that remain in RGGI. Bidders bought 20.9 million of the 36.4 million allowances on the auction block at the reserve price of $1.93 each, netting just over $40 million in revenue. Since the program’s inception in 2008, the RGGI program has generated just over $1 billion from selling the rights to emit carbon dioxide from fossil-fueled power plants, the cost of which is ultimately borne by ratepayers across the Northeast.

Weak demand has plagued the RGGI program since the summer of 2010, as the lengthy economic downturn reduced demand for electricity, and CO2 emissions. A switch from coal to less carbon-intense natural gas also left covered utilities with less need to purchase RGGI credits. The low auction prices, and collapse of the secondary RGGI market, has mitigated the impact on ratepayers, but also slowed a revenue stream that states had been counting on the subsidize green energy projects.

The number of bidders participating in the program has also collapsed, from a high of 84 in the December 2008 auction to just 20 in March 2012. Just 24 bidders submitted bids last week.

New Hampshire will receive just over $2 million from the June quarterly auction, bringing the Granite State’s total RGGI revenues to $38.7 million since it began participating in the auctions in December 2010. State officials spent those revenues quicker than they came in over the program’s first three-year compliance period, generating a $600,000 RGGI deficit, which has since been closed with revenues from this year’s auction.

RGGI’s first three-year compliance period closed in January. Covered utilities released an average of 126 million tons of CO2 annually over that period, well below the cap of 188 million tons. RGGI supporters claim this drop in emissions shows the program is a success, but there is scant evidence to suggest the RGGI program has anything to do with the drop in demand for electricity across the Northeast. Plunging natural gas prices and lower electric usage are more plausible explanations for carbon emissions dropping so quickly.

As RGGI prices remained flat, the secondary market collapsed. The Chicago Climate Futures Exchange stopped trading RGGI credits at the end of 2010, facing minimal interest in the contracts. According to Reuters Point Carbon, secondary RGGI allowances prices are stable at just two cents above the market reserve.

New Jersey Governor Chris Christie withdrew his state from RGGI last year, prompting a lawsuit from two environmental advocacy groups. New Hampshire’s Legislature approved a bill last year to withdraw from RGGI, but failed to override a veto from Governor John Lynch. This year, the Legislature sent Lynch a compromise bill, HB 1490, that amends how RGGI revenues are handed out, and triggers withdrawal if Massachusetts or two other New England states leave first. Lynch has yet to sign or veto HB 1490.