Not a moment too soon, the Massachusetts Legislature has enacted important new clean energy legislation that will maintain the state’s momentum in advancing clean renewable energy solutions like wind and solar energy. We breathed a sigh of relief as the final favorable votes were taken on July 31 – the very last day of the Legislature’s formal 2-year session – sending to Governor Patrick’s desk An Act Relative to Competitively Priced Electricity. The legislation includes key provisions that are essential for ensuring Massachusetts reaches its renewable energy targets. And this highly welcome development comes in the nick of time, just as existing programs are hitting their limits. This means we can avoid a solar slowdown and keep the wind blowing behind the state’s clean energy revolution.
CLF celebrates the new Massachusetts energy bill together with the Green Communities Act Coalition (GCA Coalition) – a diverse coalition of business, labor, environmental, clean energy, low-income and other stakeholders who advocate for strong clean energy policies in Massachusetts. The GCA Coalition, which is co-led by CLF and the New England Clean Energy Council, came together in Fall 2011 in the face of attacks by clean energy skeptics who wrongly suggested that Massachusetts cannot afford clean energy. Since then, the GCA Coalition has worked together to bring forward facts demonstrating that clean energy is one of the most promising areas of economic growth, and that it is delivering considerable economic benefits. (See here for a helpful myth v. fact sheet.)
The new energy legislation, which some have dubbed “Green Communities Act – Part II”, builds on the tremendous success of the 2008 Green Communities Act, which is delivering hundreds of millions of dollars of net economic benefits while dramatically boosting the deployment of energy efficiency and renewable energy. The new Energy Bill will ensure continued growth of the state’s renewable energy programs with an even greater focus on affordability. This is a win for the environment, public health, jobs and the economy.
So, what exactly will the new Massachusetts Energy Bill do?
Central to the Energy Bill are provisions that will extend two critically important renewable energy programs: long-term renewable energy contracts and “net-metering”:
- The Energy Bill requires electric utilities to work together to sign additional long-term (10-20 year) contracts for the purchase of renewable energy to meet 4% of total customer demand.
» This is in addition to the long-term renewable energy contracts the utilities already have signed under the existing 2008 Green Communities Act (which established a 3% minimum) — bringing the total amount of renewable energy long-term contracts to at least 7% of the electricity that is consumed in Massachusetts.
» Contrary to some confusing media reports, this requirement does not change the overall amount of new renewable energy that electric utilities must purchase each year (currently at 7% of all electricity consumed, and increasing by 1% per year). Instead, it only increases the extent to which utilities buy that energy using long-term contracts instead of spot-market purchases or alternative compliance payments.
» Long-term contracts are a win for renewable energy projects and customers alike. Such contracts have become essential for getting new renewable energy projects built because the developers can show lenders that they will be able to re-pay their loans. This translates into lower financing costs, and those savings are passed on to electric customers.
» The Energy Bill generally requires utilities to jointly solicit and enter long-term renewable energy contracts, and competitive bidding will be required. Based on prior experience in Massachusetts, land-based wind energy projects are likely to be particularly successful in securing long-term contracts under the new law. In addition, the mechanism for joint solicitation should provide opportunities for larger projects to compete to sell their power to all Massachusetts customers.
» This expanded renewable energy long-term contracting program is likely to be an important complement to the agreement reached on July 30 by the New England Governors to work together to implement a regional renewable energy purchasing commitment. Massachusetts already is ahead of the curve and well situated to help lead the region to success!
- The Energy Bill also will significantly expand existing renewable energy “net metering” programs, providing an important boost to smaller scale clean energy projects throughout Massachusetts:
» “Net-metering” makes small-scale renewable energy installations more affordable by ensuring that homeowners and small businesses will be compensated fairly – at retail rates – for excess power that they deliver into the electric grid.
» The Energy bill doubles the existing net-metering program limits, up to 6% of total electricity consumed in Massachusetts (3% from publicly owned facilities, 3% from privately owned).
» The bill also allows anaerobic digestors – projects that convert organic waste to energy – to qualify for the program for the first time, together with small wind and solar projects.
These provisions are hallmarks of a critically important clean energy bill that will maintain clean energy momentum as we enter the summer doldrums.
The Energy Bill also is noteworthy for what it does not include: e.g., significant clean energy program rollbacks that were championed by skeptics, and provisions that risked locking in new fossil fuel fired generation. Whew!
So please join us in applauding the Massachusetts Legislature and the Patrick Administration for advancing an important and balanced Energy Bill that will keep clean energy growing!