BOSTON – Massachusetts is poised to purchase more of its energy from renewable sources than ever before, under a new law signed Monday by Gov. Charlie Baker.
“Through solicitation and procurement of long-term contracts for hydro and wind power, Massachusetts and New England can remain a leader in clean and renewable energy production,” Baker said.
Baker, a Republican, said the work is just beginning. “The real heavy lifting on this starts now,” Baker said. “They’ve given us a framework to work with, but now we actually have to do something with it.”
Energy usage is a major issue in Massachusetts, which has soaring energy costs and cold winters and will see several coal and nuclear power plants retire in the coming years. To avoid further cost spikes, the state will need to replace that energy. Due to environmental concerns, Massachusetts passed a state law several years ago that requires the state to get a growing percentage of its energy from renewable sources.
The new law requires Massachusetts to solicit long-term contracts – lasting 15 or 20 years – to procure 1,600 megawatts of offshore wind power and another 1,200 megawatts of hydropower or other renewable resources, such as land-based wind or solar.
The requirement for procuring offshore wind is expected to pave the way to build the first commercially scaled wind farm in the U.S., and several companies are talking about building new wind farms on federal waters off Massachusetts.
Baker signed the bill under blazing sunshine on the Statehouse lawn, surrounded by lawmakers and lobbyists, with a soundtrack of songs about renewable energy playing on speakers.
State Sen. Ben Downing, D-Pittsfield, Senate chairman of the Joint Committee on Telecommunications, Utilities, and Energy, said the bill will not only help Massachusetts reduce the use of energy, use energy in a smarter way and move from fossil fuels to clean energy. It will also, he said, “do so in a way each of the other 49 states will be looking at Massachusetts once again and thinking how can we do what they just did.”
Baker said the goal is to solicit the bids for the new renewable energy in 2017. It could take anywhere from 18 months to three or four years after that for the energy to be delivered, depending on how the procurement process goes. “The Legislature set some legitimate and appropriate standards around cost effectiveness and reasonableness in this,” Baker said. “If the bids don’t meet that test, the answer’s going to be to go back out and re-procure.”
Baker signed the bill into law more than a year after he first proposed requiring the state to solicit long-term contracts to import Canadian hydropower. Over the last year, separate proposals emerged from the House and Senate, with major differences between them, and it took lawmakers until the final day of the legislative session on July 31 to hammer out and vote on a compromise bill.
In addition to the procurement requirements, the new law requires the state to develop a plan to repair gas leaks. It includes provisions to increase the use of energy storage technology. Small in-state hydropower projects will receive a slight increase in a tariff paid by ratepayers. There will be a panel created to guide the decommissioning of the Pilgrim nuclear power plant in Plymouth. It creates a program where commercial and industrial property owners can get tax incentives to pay for energy efficiency upgrades.
“The future of Massachusetts is going to be the diversification of our entire energy portfolio,” said State Rep. Thomas Golden, D-Lowell, House chairman of the Joint Committee on Telecommunications, Utilities, and Energy.
The New England Power Generators Association criticized the bill for limiting competition by locking up part of the market in long-term contracts, which could potentially raise energy prices. “This energy bill represents the single biggest step away from a competitive electricity market ever taken in New England,” said NEPGA President Dan Dolan.
Baker pointed out that the new law could save ratepayers money by providing new 24/7 capacity instead of New England states having to buy expensive energy on the “spot market” at peak times of high energy use.
The companies producing offshore wind and building transmission lines for wind and hydropower have praised the bill. So have several environmental groups.
George Bachrach, president of the Environmental League of Massachusetts, called the bill, “a victory for diversifying our energy portfolio away from fossil fuels by adding both wind and hydro.”
Veronica Eady, vice president and director of Conservation Law Foundation’s Massachusetts office, said it is an “exciting day” for Massachusetts with the new offshore wind commitment and the commitment to address gas leaks. But, Eady added, “We have some work to do still.”
Some provisions favored by environmentalists did not make it into the final version of the bill. The final law will not bar utilities from charging customers fees to cover the cost of building new natural gas pipelines. It also does not increase the amount of energy the state requires utilities to buy from renewable sources.
Downing, who supported several provisions that did not make into the law, said, “There’s no perfect bill.” Downing called the new law “a bill that can be built on” in the future. “This is going to be a constant renewal process every session … if we’re going to turn around climate change,” Downing said.
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