Nov. 20 (Bloomberg) -- Carbon dioxide permits for power plants in the U.S. Northeast’s “cap-and-trade” program fell to their fifth low in 11 trading days on delays in setting up a national emissions market.

December contracts for Regional Greenhouse Gas Initiative, or RGGI, permits fell 6 cents, or 2.7 percent, to settle at $2.16 on the Chicago Climate Futures Exchange. Each permit gives a power plant the right to emit one ton of carbon dioxide.

Permit prices have fallen because providers are generating less electricity than expected and using more natural gas, Paul Tesoriero, director of environmental trading at Evolution Markets LLC in White Plains, New York, said in an e-mail. Natural gas burns more cleanly than coal, reducing the need for generators to buy emission permits.

“The fact that a U.S. carbon bill will not be voted on and passed in 2009” has further weakened demand for the permits, Tesoriero said. The cap-and-trade legislation before Congress would help the surplus RGGI permits retain their value by converting them into federal allowances.

Since the U.S. House passed a cap-and-trade bill in June, the price of RGGI permits has fallen 33 percent as the Senate postponed action on the measure to focus on health-care legislation. Senate Majority Leader Harry Reid, a Nevada Democrat, said Nov. 17 a climate-change bill won’t get a vote until the spring.

Senator Barbara Boxer, a California Democrat and cosponsor of the cap-and-trade measure, said lawmakers will be focused on health-care legislation, job creation and financial services regulation before they turn to climate-change legislation in 2010.

The RGGI program is due to auction 30.8 million permits Dec. 2, the regional carbon trading system’s sixth such sale. The states participating in RGGI are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.

To contact the reporter on this story: Simon Lomax in Washington at slomax@bloomberg.net.

Last Updated: November 20, 2009 17:36 EST