Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
In January, the Department of Energy Resources issued emergency regulations (under 225 CMR 14.00) requiring all retail electricity providers to meet a portion of their renewable portfolio standard using solar renewable energy credits.
The new regulations, intended to promote the development specifically of solar energy, may lead to an increase in energy bills for consumers.
Renewable requirements
Massachusetts law requires that a portion of electricity sold to customers in the state be sourced from renewable energy resources. Massachusetts has two renewable resource “portfolio” requirements:
• Class I applies to power from the following resources (with certain limitations): solar, wind, ocean thermal, wave or tidal, fuel cells, landfill gas, waste-to-energy, hydroelectric, biomass, and geothermal. Each year the Class I requirement increases, and for 2010 it will rise to 5 percent of energy consumed.
• Class II resources are similar to Class I, but include certain additions, in particular older hydroelectric plants that did not qualify before as Class I, and specific requirements around waste-to-energy facilities. The Class II resource requirement is currently set at 3.6 percent.
When energy suppliers quote prices for electric service in Massachusetts (and when utilities set basic service rates), the added cost of meeting these renewable resource requirements is part of the cost to customers.
The Green Communities Act, signed into law on July 2, 2008, gave the Department of Energy Resources broad authority to make changes to the Class I and Class II renewable resource obligations. Since last summer, the department has been in the process of developing specific regulations to promote solar energy within Massachusetts through the imposition of a new solar power purchase obligation.
What’s new for 2010
The emergency regulations addressing solar power, filed by the Department of Energy Resources on Jan. 8, have gone into effect for calendar year 2010. These emergency regulations can still be modified, and the department has scheduled a public hearing on the enactment of final regulations for March 2 and will accept comments through March 9.
The new regulations promote solar power by creating a “carve-out” within the existing Class I requirements. In other words, the regulations mandate that a portion of the Class I requirement be met with only solar power. For 2010, the “carve out” is around 1.5 percent of total energy consumed and is intended to support the development of approximately 30 megawatts of new solar generation. This percentage will be adjusted annually and is intended to reach an ultimate target of 400 megawatts.
Aspects of these new regulations have caused some controversy. Unlike past changes to the renewable resource obligations, current retail power contracts are not exempt from these regulations. Also, because the solar “carve-out” percentage is established each year, power customers won’t know in advance what they are obligated to purchase in future years. [The MMA is studying the regulations and their potential impact on cities and towns.]
Future implications
The initial cost impact of the annual solar carve-out requirement should be low, due to the relatively small percentage increase and lower power prices in recent years. But it is hard to predict how this will change in the coming years, as renewable resource requirements expand.
Communities may want to consider installing solar panels at their facilities as a means to stay ahead of increasing solar power requirements. With new Department of Energy Resources incentives, many suppliers and solar development companies can be expected to offer attractive arrangements in this area.
Constellation Energy has developed a number of solar installations for customers in Massachusetts, including a 400-kilowatt photovoltaic power system that serves about 16 percent of the energy requirements of Majilite’s headquarters and manufacturing facility in Dracut.
Constellation NewEnergy is the endorsed supplier to the MMA’s MunEnergy program. For more information, contact MunEnergy Program Manager Emily Neill at (617) 772-7513 or emily.neill@constellation.com.
Daniel Allegretti is vice president of energy policy in the Constellation Energy Commodities Group.