Breaking down the new clean energy bill

Breaking down the new clean energy bill

Eversource, AIM call it a ‘measured approach;’ one rep calls it ‘terrible’

THE CLEAN ENERGY BILL approved by the Legislature on Tuesday adopted the go-slow approach favored by many of the state’s business groups and utilities, leaving a price on carbon and stronger support for solar and wind on the cutting room floor while greenlighting a number of less flashy provisions designed to give renewable energy a bigger role in the region’s energy future.

The legislation adopted the House’s less aggressive position on renewable energy subsidies and provided no additional incentives for solar power development, the two top priorities of renewable energy developers. But it did nix a reliability charge that Eversource Energy, with the approval of the Department of Public Utilities, was preparing to assess on solar customers and created a new mechanism for encouraging what the bill calls clean peak energy.

Michael Durand, a spokesman for Eversource Energy, issued a statement describing the legislation as “a measured approach after last session’s landmark clean energy bill.” Regarding the clean peak standard and the reliability charge, Durand said the company was carefully studying the bill to determine its impacts.

Robert Rio, a senior vice president at Associated Industries of Massachusetts, used the very same language to describe the Legislature’s bill. “By following this measured approach, Massachusetts avoids disrupting the energy sector by making significant changes to programs that are themselves in the middle of being finalized,” Rio said in a statement. “AIM feared that course could have delayed our effectiveness in meeting our greenhouse gas reduction goals.”

Kevin O’Shea, a spokesman for National Grid, said the clean energy legislation “represents a balanced approach to securing the Commonwealth’s clean energy future.”

Those who wanted more from the legislation were not pleased. Rep. Frank Smizik, the chairman of the House Committee on Global Warming and Climate Change, didn’t mince words in a brief interview with the State House News Service. “It’s terrible,” he said of the bill before casting the only no vote when the House approved the measure 151-1. The Senate vote on the bill was 36-0.

Sen. Jamie Eldridge of Acton voted for the bill but said on the Senate floor that he was disappointed it was not bolder and more comprehensive. “We need to do a better job standing up to the utilities and the fossil fuel industry,” he said.

Sen. Michael Barrett, the lead Senate negotiator on the bill, declined to discuss the internal discussions of the conference committee. The Lexington senator acknowledged in a telephone interview that “we didn’t find a consensus with respect to most of our stuff,” but he insisted the legislation has many important features. “I don’t parse how good is good,” he said.

Barrett also made clear that the Senate got what it could in this bill and will be back for more next session. Indeed, he thinks energy is coming to resemble health care, an issue so complicated and with such a major impact on society that it requires attention during every legislative session.

“Do I think this is the end slate of what the Senate will push for?” Barrett asked. “No I do not.”

Here is a breakdown of the key elements of the bill:

Renewable portfolio standard – Under current law, companies selling electricity to customers in Massachusetts are required to buy certificates from renewable energy developers to prove that a mandated percentage of their power is coming from renewable sources. The payments for the certificates represent a subsidy for the renewable energy, mostly solar and wind. The current percentage is 13 percent, increasing one percentage point each year. The Senate wanted to increase the growth to three percentage points a year, while the House favored raising it to two percentage points a year for a decade and then lowering it back to one percentage point a year after that. Business groups favored a go-slow approach, arguing that rapid increases could end up squeezing hydro-electricity from Canada out of the state’s clean energy mix. The conference committee opted for the House position. Barrett said the Senate will keep pushing for more. Noting the increase in renewable energy won’t revert to one-percentage-point-a-year for a decade, he said: “That gives us 10 years to relitigate that issue, which is plenty of time.”

Offshore wind procurement – The state recently selected Vineyard Wind to build an 800-megawatt wind farm off the coast of Martha’s Vineyard, half of the 1,600 megawatt procurement the Legislature approved in 2016. The new clean energy legislation authorizes but does not require state officials to proceed with another 1,600 megawatt procurement by December 31, 2035. The provision is a strong signal that Massachusetts wants to be a big player in offshore wind. The legislation also encourages state officials to consider a different type of offshore wind procurement in the future. Instead of each developer building a separate transmission line to their own wind farm, the legislation urges consideration of building one transmission line to the area to serve multiple wind farms. Ed Krapels, the CEO of transmission line developer Anbaric and an advocate for the single-line approach, said the provision makes Massachusetts “the first state in the nation to legislatively recognize the importance of independent transmission as a critical driver in the growth of offshore wind resources.”

Solar  – Solar advocates have been saying for months that the industry needs help. Thousands of solar workers have been laid off and the prospects for future growth are slim. The advocates wanted the Legislature to lift the cap on how much solar can be installed in the state and they wanted the three percentage-points-a-year increase in the renewable portfolio standard, neither of which they got. “Small commercial and business solar projects across the Commonwealth will remain stalled as the legislation leaves a needless barrier to customer adoption of solar, caps on Massachusetts’ most successful solar program, net metering, in place. With just hours left in the session, it appears the urgent action needed to get solar back to work for the Commonwealth will wait for another year,” a group of pro-solar organizations said in a joint statement.

Reliability charges – Two years ago the Legislature opened the door to utilities charging customers with solar a minimum monthly reliability charge to make sure they were paying their share of the cost of operating the regional power grid. Barrett, who has solar panels on his roof, said the charge makes sense because without it he wouldn’t pay anything for access to the grid five months out of the year because his panels produce all the power he needs. Eversource proposed, and the Department of Public Utilities approved, a charge that would be based on the customer’s peak energy usage. “That made no sense,” said Barrett, who said the customer has no way of knowing when his peak usage occurs and his personal peak may be unrelated to the system’s peak. He said the purpose of the charge should be to reduce energy usage at peak demand times and the best way to do that is to incentivize customers to reduce their electricity consumption at those times. Barrett, who said he personally wrote the section of the bill dealing with reliability charges, said the new legislation allows a reliability charge but only when it is based on usage at peak demand periods. He said regulators will need to work out how customers will be informed when those peak demand periods are occurring.

Clean peak standard – The one big drawback of most forms of renewable energy is that they depend on the wind blowing and the sun shining and aren’t always available when demand for electricity is at its peak. The clean peak standard, a priority of the Baker administration, is an attempt to incorporate more clean energy into the mix of power sources needed to meet peak demand. The legislation creates another system of subsidies to support energy developers who can produce clean energy when needed. The state will set an initial target and then increase the amount by .25 percent of sales each year. Presumably, storage systems will play a key role in “firming up” the delivery of renewable energy, although the legislation indicates mechanisms for reducing demand for electricity at peak periods would also qualify for financial support. Several senators said they were worried that the electricity from waste-to-energy plants could be used to meet the clean peak standard, which would mean the state would be subsidizing what one senator called “dirty energy companies.”

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Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Battery storage – The bill focuses a lot of attention on battery storage, which is key to making renewable forms of energy such as wind and solar key parts of the grid. The bill increases the energy storage target from 200 megawatts to 1,000 megawatts by December 31, 2025. It also provides other incentives for storage development.

Natural gas leaks – The bill requires gas utilities to report all “lost and unaccounted gas for each year” in a bid to find out how much of the fuel is leaking out of the pipeline and distribution system. Barrett said the natural gas provision was inserted largely because of advocacy by the Cambridge group Mothers Out Front.