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Senators eying utility regulation, clean energy law changes

Boston – In addition to rethinking the way energy contracts are awarded to utility companies, a bill being crafted by the Senate to tackle surging Massachusetts energy costs may include an update on the way utilities are regulated and a fresh look at whether the rules that govern energy efficiency are effective, according to the Senate’s point-man on the legislation.

“We’re looking at oversight of utilities, and especially the oversight of what the utilities have been tasked with under the Green Communities Act,” said Sen. Benjamin Downing (D-Pittsfield), referring to the 2008 law aimed largely at bolstering the state’s renewable energy infrastructure and supply.

Downing, co-chair of the Legislature’s Telecommunications, Utilities and Energy Committee, said the Green Communities Act left many of the details of renewable energy regulation up to the Department of Public Utilities, a state agency.

“We want to make sure that the resting point that they’ve come to is the right one,” he said.

Downing’s remarks were the clearest insight yet into an effort to curb rising energy costs foreshadowed by Senate President Therese Murray last year. Business groups have often cited the high cost of energy as a barrier to growth in Massachusetts.

His comments also came a day after Attorney General Martha Coakley called for an end to “sweetheart deals currently offered to utility companies.”

“We should continue to lead the nation on energy and environmental policy,” she said in an address to the Greater Boston Chamber of Commerce on Wednesday, “but we must do this while working with businesses to control costs.”

Coakley called to subject renewable energy contracts to competitive bidding, contending that the Green Communities Act – which sanctions direct, no-bid negotiations between utilities and energy suppliers – will cost $4 billion over the next four years. A no-bid deal between Cape Wind and National Grid, which opponents have argued will drive up Massachusetts residents’ energy bills, was reached under the auspices of the Green Communities Act. Backers of the project argue that the criticism is misguided and that the project will result in a major source of clean energy and diminish reliance on foreign oil.

When the Cape Wind-National Grid deal was announced, Coakley hailed the agreement and cited the potential for “a savings of up to $456 million during the 15 year life of the project,” according to a press release her office issued at the time. Her support for the deal came only after her office intervened and pressed for a reduced price.

Although Coakley emphasized in her Wednesday remarks that she still supports the Green Communities Act, her comments drew an immediate rebuke from former energy secretary Ian Bowles, who said she was “grandstanding” and ignoring the benefits of the law.

In a statement, the state’s current energy and environmental affairs secretary, Richard Sullivan, praised Coakley for continuing to support the Green Communities Act, sidestepping her criticism of the law’s bidding procedures.

“The tired policies that maintain our reliance on fossil fuels don’t work in our modern energy landscape. Instead, we’re banking on home-grown energy solutions like energy efficiency and renewable energy to fuel the Commonwealth’s energy future by creating local jobs, cutting greenhouse gas emissions, and reducing our dependence on volatile fossil fuel markets,” he said. “The Department of Public Utilities acts in ratepayers’ interest and rigorously reviews all contracts to determine consumer benefits with input from the Attorney General.”

Sullivan emphasized that Coakley ultimately recommended that the Department of Public Utilities approve the Cape Wind-National Grid energy deal in 2010. Under the deal, National Grid agreed to purchase half of the energy generated by the project.

“That contract was recently determined by the SJC to be in the interest of ratepayers, demonstrating that this process works to protect consumers,” Sullivan noted. “Here in Massachusetts, we are at the end of the energy pipeline – lacking indigenous supplies of traditional fuels such as coal, natural gas, and oil. Our energy costs are among the highest [in] the nation and we are vulnerable to fossil fuel pricing and supply volatility … Long-term renewable energy contracts – which protect the environment and cut energy use – are an important way the Commonwealth [can] break free from this old paradigm and become energy self-reliant.”

Downing said lawmakers working on an energy bill are eyeing provisions of the Green Communities Act that Coakley spoke to at the chamber breakfast.

“The issues that she brings up are certainly issues that we’re looking at, issues about how we procure renewable energy,” he said, adding that the bill may also include “improvements that we can make in our energy efficiency programs,” such as whether rebates are structured “to get the most bang for their buck.

“If our rebates aren’t structured right under some of our energy efficiency programs, we’re not putting as many people to work,” he said.

Downing emphasized that he isn’t interested in rewriting the Green Communities Act but views it like the state’s 2006 health care law – which framers described as an initial step in a process that requires fine-tuning and updating over the years.