Power subsidy settlement OK’d
Bowles says settlement removes cloud
CORRECTION: Because of incorrect information supplied to CommonWealth by the Patrick administration, the initial version of this story said the premium for Massachusetts-generated solar was roughly 30 cents per kilowatt hour. The actual premium is a floor of 30 cents per kilowatt hour and a ceiling of 60 cents.
The Patrick administration today partially settled a legal challenge to its renewable power initiative, letting some electricity suppliers avoid the payment of hefty subsidies to Massachusetts-based solar projects.
TransCanada Power Marketing Ltd. of Calgary sued top officials in the Patrick administration in late April for steering subsidies to renewable energy projects in Massachusetts while excluding projects outside the state. TransCanada was affected by the state’s program in two ways: It sells electricity to Massachusetts customers, who would have had to pay the subsidies, and it also operates a major wind farm in Maine.
Under the state’s solar subsidy program, power sellers are required to buy a small portion of their electricity from Massachusetts-based solar companies and pay a premium of 30 to 60 cents per kilowatt hour, which is three top nearly seven times what electricity currently costs. Under terms of the partial settlement, the subsidy will be reduced to 6 cents per kilowatt hour on power contracts that were signed or renewed before Jan. 1.
Bill Taylor, senior vice president of US power for TransCanada, said the company is continuing to challenge another Massachusetts subsidy program requiring electricity sellers to negotiate long-term contracts with Massachusetts-based renewable energy suppliers. Under that subsidy program, National Grid negotiated a contract to buy power from Cape Wind at 20.7 cents per kilowatt hour starting in 2013, with a provision to increase the price 3.5 percent a year for 15 years.Ian Bowles, the Massachusetts secretary of energy and environment and one of the officials named in the TransCanada lawsuit, said in a statement that he was pleased with the settlement and confident the state would prevail on the challenge to its long-term contracts provision.
“This settlement removes the cloud from the Commonwealth’s solar credit program and allows this innovative financing mechanism to go forward, continuing the momentum toward Gov. Patrick’s goal of 250 megawatts of installed solar power by 2017,” he said in a statement.