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HOUSE DOCKET, NO. 2800 FILED ON: 1/19/2023
HOUSE . . . . . . . . . . . . . . . No. 3216
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Jeffrey N. Roy
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act relative to clean energy generation.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :DATE ADDED:Jeffrey N. Roy10th Norfolk1/19/2023 1 of 9
HOUSE DOCKET, NO. 2800 FILED ON: 1/19/2023
HOUSE . . . . . . . . . . . . . . . No. 3216
By Representative Roy of Franklin, a petition (accompanied by bill, House, No. 3216) of Jeffrey
N. Roy relative to clean energy generation. Telecommunications, Utilities and Energy.
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act relative to clean energy generation.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Section 83B of chapter 169 of the acts of 2008, as most recently amended
2by section 60 of chapter 179 of the acts of 2022, is hereby further amended by striking out, in
3line 1, the words “83C and 83D” and inserting in place thereof the following words:- 83C, 83D,
4and 83E
5 SECTION 2. Section 83B of Chapter 169, as so appearing, is hereby further amended by
6striking out the definition of “clean energy generation” and inserting in place thereof the
7following definition:-
8 “Clean energy generation”, (i) firm service hydroelectric generation from hydroelectric
9generation alone; (ii) new Class I RPS eligible resources that are firmed up with firm service
10hydroelectric generation; (iii) new Class I renewable portfolio standard eligible resources or (iv)
11nuclear power generation that is located in the control area of the regional independent system
12operator and commenced commercial operation before January 1, 2011. 2 of 9
13 SECTION 3. Said section 83B of chapter 169, as so appearing, is hereby further amended
14by inserting after the word “83D,” in line 12, the following words:- or 83E.
15 SECTION 4. Said chapter 169, as amended by chapter 188 of the acts of 2016, is hereby
16further amended by inserting after section 83D the following section:-
17 Section 83E. (a) For the purposes of this section, “Clean energy generation”, (i) firm
18service hydroelectric generation from hydroelectric generation alone; (ii) new Class I RPS
19eligible resources that are firmed up with firm service hydroelectric generation; (iii) new Class I
20renewable portfolio standard eligible resources or (iv) nuclear power generation that is located in
21the control area of the regional independent system operator and commenced commercial
22operation before January 1, 2011. In order to facilitate the financing or continued operation of
23clean energy generation resources, not later than December 31, 2025, every distribution company
24shall, in coordination with the department of energy resources, jointly and competitively solicit
25proposals for clean energy generation and, provided that reasonable proposals have been
26received, shall enter into cost-effective long-term contracts for clean energy generation for an
27annual amount of electricity up to approximately 9,450,000 megawatt-hours. Long-term
28contracts executed pursuant to this section shall be subject to the approval of the department of
29public utilities and shall be apportioned among the distribution companies under this section.
30 (b) The timetable and method for solicitation of long-term contracts shall be proposed by
31the department of energy resources in coordination with the distribution companies using a
32competitive bidding process and shall be subject to review and approval by the department of
33public utilities. The department of energy resources shall consult with the distribution companies
34and the attorney general’s office regarding the choice of solicitation methods. A solicitation may 3 of 9
35be coordinated and issued jointly with other New England states or entities designated by those
36states. The distribution companies, in coordination with the department of energy resources, may
37conduct 1 or more competitive solicitations through a staggered procurement schedule developed
38by the department of energy resources; provided, that the schedule shall ensure that the
39distribution companies enter into cost-effective long-term contracts for the delivery of clean
40energy generation up to approximately 9,450,000 megawatt-hours by December 31,
412030. Proposals received pursuant to a solicitation under this section shall be subject to review
42by the department of energy resources and the executive office of housing and economic
43development in consultation with the independent evaluator and the electric distribution
44companies shall offer technical advice. If the department of energy resources, in consultation
45with the independent evaluator, determines that reasonable proposals were not received pursuant
46to a solicitation, the department may terminate the solicitation, and may require additional
47solicitations to fulfill the requirements of this section.
48 (c) In developing proposed long-term contracts, the distribution companies shall
49consider long-term contracts for clean energy certificates, for energy and for a combination of
50both clean energy certificates and energy. A distribution company may decline to pursue a
51contract if the contract’s terms and conditions would require the contract obligation to place an
52unreasonable burden on the distribution company’s balance sheet after consultation with the
53department of energy resources; provided, however, that the distribution company shall take all
54reasonable actions to structure the contracts, pricing or administration of the products purchased
55under this section to prevent or mitigate an impact on the balance sheet or income statement of
56the distribution company or its parent company, subject to the approval of the department of
57public utilities; and provided further, that mitigation shall not increase costs to ratepayers. If a 4 of 9
58distribution company deems all contracts to be unreasonable, the distribution company shall
59consult with the department of energy resources and, within 20 days of the date of its decision,
60submit a filing to the department of public utilities. The filing shall include, in the form and
61detail prescribed by the department of public utilities, documentation supporting the distribution
62company’s decision to decline the contract. Following a distribution company’s filing, and
63within 4 months of the date of filing, the department of public utilities shall approve or reject the
64distribution company’s decision and may order the distribution company to reconsider any
65contract. The department of public utilities shall take into consideration the department of energy
66resources’ recommendations on the distribution company’s decision. The department of energy
67resources may require additional solicitations to fulfill the requirements of this section.
68 (d) The department of public utilities shall promulgate regulations consistent with this
69section. The regulations shall: (1) allow developers or owners of clean energy generation
70resources to submit proposals for long-term contracts; (2) require that contracts executed by the
71distribution companies under such proposals are filed with, and approved by, the department of
72public utilities before they become effective; (3) provide for an annual remuneration for the
73contracting distribution company equal to 2.25 per cent of the annual payments under the
74contract to compensate the company for accepting the financial obligation of the long-term
75contract; provided, however, that such provision shall be acted upon by the department of public
76utilities at the time of contract approval; (4); require associated transmission costs to be
77incorporated into a proposal; provided, however, that, to the extent there are regional or project-
78specific transmission costs included in a bid, the department of public utilities may, if it finds
79such recovery to be in the public interest, authorize or require the contracting parties to seek
80recovery of such transmission costs from other states or from benefitted entities or populations in 5 of 9
81other states through federal transmission rates, consistent with policies and tariffs of the Federal
82Energy Regulatory Commission and (5) require that the clean energy resources to be used by a
83developer or owner under the proposal meet the following criteria: (i) provide enhanced
84electricity reliability, system safety and energy security; (ii) contribute to reducing winter
85electricity spikes; (iii) are cost effective to electric ratepayers in the commonwealth over the term
86of the contract taking into consideration potential costs and benefits to the ratepayers, including
87potential economic and environmental benefits and opportunities to equitably allocate costs to,
88and equitably share costs with, other states and populations within other states that may benefit
89from clean energy generation procured by the commonwealth;; (iv) avoid line loss and mitigate
90transmission costs to the extent possible and ensure that transmission cost overruns, if any, are
91not borne by ratepayers; (iv) allow long-term contracts for clean energy generation resources to
92be paired with energy storage systems, including new and existing mid-duration and long-
93duration energy storage systems; (v) adequately demonstrate project viability in a commercially
94reasonable timeframe; (vi) include benefits to environmental justice populations and low-income
95ratepayers in the commonwealth ; and (vii) include opportunities for diversity, equity and
96inclusion, including, at a minimum, a workforce diversity plan and supplier diversity program
97plan.
98 (e) A proposed long-term contract shall be subject to the review and approval of the
99department of public utilities and shall be apportioned among the distribution companies. As part
100of its approval process, the department of public utilities shall consider recommendations by the
101attorney general, which shall be submitted to the department within 45 days following the filing
102of a proposed long-term contract with the department. The department of public utilities shall
103take into consideration the department of energy resources’ recommendations on the potential 6 of 9
104costs and benefits to the rate payers, including opportunities to equitably allocate costs to, and
105equitably share costs with, other states and populations within other states that may benefit from
106clean energy generation procured by the commonwealth, and the requirements of chapter 298 of
107the acts of 2008 and chapter 21N of the General Laws. The department of public utilities shall
108consider the potential costs and benefits of the proposed long-term contract and shall approve a
109proposed long-term contract if the department finds that the proposed contract is in the public
110interest and is a cost-effective mechanism for procuring beneficial, reliable clean energy on a
111long-term basis, taking into account the factors outlined in this section. A distribution company
112shall be entitled to cost recovery of payments made under a long-term contract approved under
113this section.
114 (f) The department of energy resources and the attorney general shall jointly select,
115and the department of energy resources shall contract with, an independent evaluator to monitor
116and report on the solicitation and bid selection process in order to assist the department of energy
117resources in determining whether a proposal received pursuant to subsection (b) is reasonable
118and to assist the department of public utilities in its consideration of long-term contracts or filed
119for approval. To ensure an open, fair and transparent solicitation and bid selection process that is
120not unduly influenced by an affiliated company, the independent evaluator shall: (1) issue a
121report to the department of public utilities analyzing the timetable and method of solicitation and
122the solicitation process implemented by the distribution companies and the department of energy
123resources under subsection (b) and include recommendations, if any, for improving the process;
124and (2) upon the opening of an investigation by the department of public utilities into a proposed
125long-term contract for a winning bid proposal, file a report with the department of public utilities
126summarizing and analyzing the solicitation and the bid selection process, and providing its 7 of 9
127independent assessment of whether all bids were evaluated in a fair and non-discriminatory
128manner. The independent evaluator shall have access to all information and data related to the
129competitive solicitation and bid selection process necessary to fulfill the purposes of this
130subsection but shall ensure all proprietary information remains confidential. The department of
131public utilities shall consider the findings of the independent evaluator and may adopt
132recommendations made by the independent evaluator as a condition for approval. If the
133independent evaluator concludes in the findings that the solicitation and bid selection of a long-
134term contract was not fair and objective and that the process was substantially prejudiced as a
135result, the department of public utilities shall reject the contract.
136 (g) The distribution companies shall each enter into a contract with the winning
137bidders for their apportioned share of the market products being purchased from the project. The
138apportioned share shall be calculated and based upon the total energy demand from all
139distribution customers in each service territory of the distribution companies.
140 (h) An electric distribution company may elect to use any energy purchased under
141such contracts for resale to its customers, and may elect to retain clean energy certificates to
142meet any applicable annual portfolio standard requirements, including section 11F of said
143chapter 25A, and other clean energy compliance standards as applicable. If the energy and clean
144energy certificates are not so used, such companies shall sell such purchased energy into the
145wholesale market and shall sell such purchased clean energy certificates attributed to any
146applicable portfolio standard eligible resources to minimize the costs to ratepayers under the
147contract. The department of energy resources shall conduct periodic reviews to determine the
148impact on the energy and clean energy certificate markets of the disposition of energy and clean
149energy certificates under this section and may issue reports recommending legislative changes if 8 of 9
150it determines that actions are being taken that will adversely affect the energy and clean energy
151certificate markets.
152 (i) If a distribution company sells the purchased energy into the wholesale spot market
153and auctions the clean energy certificates as described in this section, the distribution company
154shall net the cost of payments made to projects under the long-term contracts against the net
155proceeds obtained from the sale of energy and clean energy certificates, and the difference shall
156be credited or charged to all distribution customers through a uniform fully reconciling annual
157factor in distribution rates, subject to review and approval of the department of public utilities.
158 (j) A long-term contract procured under this section shall utilize an appropriate
159tracking system to ensure a unit specific accounting of the delivery of clean energy, to enable the
160department of environmental protection, in consultation with the department of energy resources,
161to accurately measure progress in achieving the commonwealth’s goals under chapter 298 of the
162acts of 2008 or chapter 21N of the General Laws.
163 (k) The department of energy resources and the department of public utilities may
164jointly develop requirements for a bond or other security to ensure performance with
165requirements under this section.
166 (l) The department of energy resources may promulgate regulations necessary to
167implement this section.
168 (m) If this section is subjected to a legal challenge, the department of public utilities
169may suspend the applicability of the challenged provision during the pendency of the action until
170a final resolution, including any appeals, is obtained and shall issue an order and take other 9 of 9
171actions as are necessary to ensure that the provisions not subject to the challenge are
172implemented expeditiously to achieve the public purposes of this section.