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SENATE DOCKET, NO. 2578 FILED ON: 1/17/2025
SENATE . . . . . . . . . . . . . . No. 2263
The Commonwealth of Massachusetts
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PRESENTED BY:
William J. Driscoll, Jr.
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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 the clean heat standard.
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PETITION OF:
NAME:DISTRICT/ADDRESS :William J. Driscoll, Jr.Norfolk, Plymouth and Bristol 1 of 11
SENATE DOCKET, NO. 2578 FILED ON: 1/17/2025
SENATE . . . . . . . . . . . . . . No. 2263
By Mr. Driscoll, a petition (accompanied by bill, Senate, No. 2263) of William J. Driscoll, Jr. for
legislation relative to the clean heat standard and reducing greenhouse gas emmissions.
Telecommunications, Utilities and Energy.
The Commonwealth of Massachusetts
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In the One Hundred and Ninety-Fourth General Court
(2025-2026)
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An Act relative to the clean heat standard.
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. Chapter 21A of the General Laws are hereby amended by adding the
2following new section:-
3 Section 29. Clean Heat Standard
4 (a) For the purposes of this section, as well as Sections 29A, 29B, and 29C, the following
5words shall have the following meanings:
6 “Clean Heat Credit,” means a tradeable, non-tangible commodity that represents the
7amount of greenhouse gas reduction caused by a clean heat measure.
8 “Clean heat measure,” means fuel and technologies delivered and installed to end-use
9customers in Massachusetts that reduce greenhouse gas emissions. Clean heat measures shall not
10include 2 of 11
11 switching from one fossil fuel use to another fossil fuel use, or the use of Renewable
12Natural Gas or Hydrogen. The department may adopt a list of acceptable actions that qualify as
13clean heat measures.
14 “The department” or “department,” shall mean the Massachusetts Department of
15Environmental Protection. “Default delivery agent,” shall mean the entity designated by the
16department to provide services that generate tradeable clean heat credits.
17 “entity” shall mean any individual, trustee, agency, partnership, association, corporation,
18company, municipality, political subdivision, or any other form of organization.
19 “Heating fuel” shall mean fossil-based heating fuel, including oil, propane, natural gas,
20coal, and kerosene.
21 “Obligated party” shall mean (a) a natural gas utility, whether investor-owned or a
22municipal utility, serving customers in Massachusetts; or (b) for other heating fuels, the entity
23that makes the first sale of heating fuel into or in the sate for consumption within the state.
24Electricity suppliers shall not be obligated parties.
25 “Thermal sector” shall mean the residential, non-residential, commercial, and industrial
26fuel use sectors.
27 “Energy Burden” shall mean the annual spending on thermal energy as a percentage of
28household income.
29 (b) The Clean Heat Standard is hereby established. Under this program, obligated parties
30shall reduce greenhouse gas emissions attributable to the Massachusetts thermal sector by 3 of 11
31retiring required amounts of clean heat credits to meet the thermal sector portion of the
32greenhouse Global Warming Solutions Act.
33 (c) By rule or order, the Department shall establish or adopt a system of tradeable clean
34heat credits earned from the delivery of clean heat measures that reduce greenhouse gas
35emissions.
36 (d) An obligated party may obtain the required amount of clean heat credits through
37delivery of eligible clean heat measures, through contracts for delivery of eligible clean heat
38measures, through the market purchase of clean heat credits, or through delivery of eligible clean
39heat measures by a designated statewide default delivery agent.
40 (e) The department shall establish a system of recognition for clean heat credits pursuant
41to this section.
42 SECTION 2. Said Chapter 21N of said General Laws is further amended by inserting the
43following new section:
44 Section 29A. Compliance with the Clean Heat Standard
45 (a) Required Amounts:
46 (1) The department shall establish the number of clean heat credits that each obligated
47party is required to retire each calendar year. The size of the annual requirement shall be set at a
48pace sufficient for the thermal sector to achieve lifecycle carbon dioxide equivalent (CO2e)
49emission reductions consistent with the building sector sub-sector limits for 2030 and thereafter.
50 (2) Annual requirements shall be expressed as a percent of each obligated party’s
51contribution to the thermal sector’s lifecycle CO2e emissions in the previous year with the 4 of 11
52annual percentages being the same for all parties. To ensure understanding among obligated
53parties, the Department shall, in a timely manner, publicly provide a description of the annual
54requirements in plain terms.
55 (3) The Department may adjust the annual requirements for good cause after notice and
56opportunity for public process. Good cause may include a shortage of clean heat credits or undue
57adverse financial impacts on particular customers or demographic segments. Any downward
58adjustment shall be allowed for only a short, temporary period.
59 (b) Annual Registration:
60 (1) The Department may adjust the annual requirements for good cause after notice and
61opportunity for public process. Good cause may include a shortage of clean heat credits or undue
62adverse financial impacts on particular customers or demographic segments. Any downward
63adjustment shall be allowed for only a short, temporary period.
64 (2) At a minimum, the Department shall require registration information to include legal
65name, doing business as name if applicable, municipality, state, type of heating fuel sold, and the
66volume of sales of heating fuels into or in the State for final sale or consumption in the State in
67the calendar year immediately preceding the calendar year in which the entity is registering with
68the Department.
69 (3) Each year, and not later than 30 days following the annual registration deadline
70established by the Department, the Department shall share complete registration information of
71obligated parties with the Department of Environmental Protection for purposes of conducting
72the Massachusetts Greenhouse Gas Emissions Inventory and Forecast. 5 of 11
73 (4) The Department shall maintain, and update annually, a list of registered entities on its
74website that contains the required registration information, except that the public list shall not
75include heating fuel volumes reported.
76 (5) For any entity not registered, the first registration form shall be due 30 days after the
77first sale of heating fuel to a location in Massachusetts.
78 (6) Clean heat requirements shall transfer to entities that acquire an obligated party.
79 (c) Equitable distribution of clean heat measures:
80 (1) The Clean Heat Standard shall be designed and implemented to enhance social equity
81by minimizing adverse impacts to low-income and moderate-income customers and those
82households with the highest energy burdens. The design shall ensure all customers have an
83equitable opportunity to participate in, and benefit from, clean heat measures regardless of
84heating fuel used, income level, geographic location, or homeownership status.
85 (2) A substantial portion of clean heat credits retired by each obligated party shall be
86sourced from clean heat measures delivered to low-income and moderate-income customers. The
87portion of each obligated party’s required amount needed to satisfy the annual Clean Heat
88Standard requirement shall be at least 20 percent from low-income customers and 20 percent
89from moderate-income customers. The definitions of low-income customer and moderate-
90income customer shall be set by the Department in consultation with the Equity Advisory Group
91and in alignment with other existing definitions 6 of 11
92 (3) The Department may consider frontloading the credit requirements for low-income
93and moderate-income customers so that the greatest proportion of clean heat measures reach
94lowincome and moderate-income customers in the earlier years.
95 (4) In order to best serve low-income and moderate-income customers, the Department
96shall have authority to change these portions and the criteria used to define low-income and
97moderateincome customers for good cause, after notice and opportunity for public process.
98 (5) In determining whether to exceed the minimum percentages of clean heat measures
99that must be delivered to low-income and moderate-income customers, the Department shall take
100into account participation in other government-sponsored low-income and moderate-income
101weatherization programs.
102 (6) A clean heat measure delivered to a customer qualifying for a government-sponsored,
103low-income energy subsidy shall qualify for clean heat credits required by subdivision (2) of this
104subsection.
105 (d) The Department shall designate the default delivery agent. The default delivery agent
106shall be a single statewide entity capable of providing a variety of clean heat measures and
107contracted for a multiyear period through a competitive procurement process. The entity selected
108as the default delivery agent may also be a market participant but shall not be an obligated party.
109 (1) By rule or order, the Department shall adopt annually the cost per clean heat credit to
110be paid to the default delivery agent by an obligated party that chooses this option. In adjusting
111the default delivery agent credit cost, the Department shall consider the default delivery agent’s
112anticipated costs to deliver clean heat measures and costs borne by customers, among other 7 of 11
113factors determined by the Department. Changes to the cost of credits shall take effect not less
114than 180 days after adopted.
115 (2) All funds received from noncompliance payments pursuant to subsection (e)(2) of this
116section shall be used by the default delivery agent to provide clean heat measures to low-income
117customers.
118 (e) Enforcement: (1) The Department shall have the authority to enforce the requirements
119of this section and any rules or orders adopted to implement the provisions of this section. The
120Department may use its existing authority under this title. As part of an enforcement order, the
121Department may order penalties and injunctive relief.
122 (2) The Department may order an obligated party that fails to retire the number of clean
123heat credits required in a given year, including the required amounts from low-income and
124moderate-income customers, to make a noncompliance payment to the default delivery agent.
125The per-credit amount of the noncompliance payment shall be three times the amount established
126by the Department under this section for timely per-credit payments to the default delivery agent.
127 (3) Any statements or other representations made by obligated parties related to
128compliance with the Clean Heat Standard are subject to the Department’s enforcement authority,
129including the power to investigate and assess penalties, under this title.
130 (f) The Department shall establish requirements for the types of records to be submitted
131by obligated parties, a record retention schedule for required records, and a process for
132verification of records and data submitted in compliance with the requirements of this section. 8 of 11
133 (g) After the adoption of the rules implementing this section, the Department shall submit
134a written report to the joint Committee on Telecommunications, Utilities, and Energy detailing
135the efforts undertaken to establish the Clean Heat Standard pursuant to this section. On or before
136August 31 of each year following the year in which the rules are first adopted under this section,
137the Department shall submit to the standing committees a written report detailing the
138implementation and operation of the Clean Heat Standard. This report shall include an
139assessment on the equitable adoption of clean heat measures required by this section, along with
140recommendations to increase participation for the households with the highest energy burdens.
141 SECTION 3. Said Chapter 25A of said General Laws is further amended by inserting the
142following new section:
143 Section 29B. Tradeable Clean Heat Credit
144 (a) By rule or order, the Department shall establish or adopt a system of tradeable clean
145heat credits that may be earned by reducing greenhouse gas emissions through the delivery of
146clean heat measures. While credit denominations may be in simple terms for public
147understanding and ease of use, the underlying value shall be based on units of carbon dioxide
148equivalent (CO2e). The system shall provide a process for the recognition, approval, and
149monitoring of the clean heat credits. The Department shall perform the verification of clean heat
150credit claims.
151 (b) Clean heat credits shall be based on the lifecycle CO2e emission reductions that result
152from the delivery of eligible clean heat measures to end-use customer locations into or in
153Massachusetts. For clean heat measures that are installed, the value of the clean heat credits in 9 of 11
154each year shall be the lifecycle CO2e emissions of the heating fuel avoided by the installation of
155the measure, minus the lifecycle CO2e emissions of the energy that is used instead.
156 (c) To promote certainty for obligated parties and clean heat providers, the Department
157shall, by rule or order, establish a schedule of lifecycle emission rates for heating fuels and
158eligible clean heat measures. The schedule shall be based upon the best available science and
159determined subsequent to notice and an opportunity for public comment. Clean heat measures
160eligible to meet the standard shall include air- and water-sourced heat pumps, ground-source heat
161pumps, networked geothermal systems, heat pump water heaters, induction stoves, and heat
162pump clothes dryers.
163 (d) Clean heat credits shall be “time stamped” for the year in which the clean heat
164measure is delivered as well as each subsequent year during which the measure produces
165emission reductions. Only clean heat credits with the current year time stamp, and credits banked
166from previous years, shall be eligible to satisfy the current year obligation.
167 (e) Clean heat credits can be earned only in proportion to the deemed or measured
168thermal sector greenhouse gas emission reductions achieved by a clean heat measure delivered in
169Massachusetts. Other emissions offsets, wherever located, shall not be eligible measures.
170 (g) All eligible clean heat measures that are delivered in Massachusetts shall be eligible
171for clean heat credits and may be retired and count towards an obligated party’s emission
172reduction obligations, regardless of who creates or delivers them and regardless of whether their
173creation or delivery was required by other State policies and programs. The Department shall
174determine whether the total value of a clean heat credit for an installed measure shall be claimed
175in the year it is installed or whether the annual value of that credit shall be applied each year of 10 of 11
176the measure’s life. The Department shall determine whether to require a certain portion of clean
177heat credits be acquired each year from weatherization projects in order to further the State’s
178building efficiency goals. The Department shall recommend legislative changes, if needed, to
179accomplish this.
180 (h) The Department shall create a registration system to lower administrative barriers to
181individuals and businesses seeking to register qualified actions eligible to earn clean heat credits
182and to facilitate the transfer of credits to obligated parties. The Department may hire a third-party
183consultant to evaluate, develop, implement, maintain, and support a database or other means for
184tracking clean heat credits and compliance with the annual requirements of obligated parties. The
185system shall require entities to submit the following information to receive the credit: the
186location of the clean heat measure, whether the customer or tenant has a low or moderate
187income, the type of property where the clean heat measure was installed or sold, the type of clean
188heat measure, and any other information as required by the Department
189 SECTION 4. Said Chapter 25A of said General Laws is further amended by inserting the
190following new section:
191 Section 29C. Clean Heat Standard Equity Advisory
192 (a) The Department shall establish the Clean Heat Standard Equity Advisory Group to
193assist the Department in developing and implementing the Clean Heat Standard in a manner that
194ensures an equitable share of clean heat measures are delivered to low-income and moderate
195income consumers, and that low-income and moderate-income consumers who are not early
196participants in clean heat measures are not negatively impacted in their ability to afford heating
197fuel. Its duties shall include: providing feedback to the Department on strategies for engaging 11 of 11
198low-income and moderate-income consumers in the public process around development of the
199Clean Heat Standard, supporting the Department in assessing whether customers are equitably
200served by clean heat measures and how to increase equity in this area, identifying actions needed
201to provide better service to and mitigate the fuel price impacts calculated in section 8125 of this
202title on low-income and moderate-income customers, assisting the Department in defining low
203income and moderate income customers, recommending any additional programs, incentives, or
204funding needed to support low-income and moderate-income customers, and organizations that
205provide social services to Consumers, in affording heating fuel and other heating expenses,
206providing feedback to the Department on the impact of the Clean Heat Standard on the everyday
207experience of low-income and moderate income Consumers, and providing information to the
208Department on the challenges renters face in being equitably served by clean heat measures and
209recommendations to ensure that renters have equitable access to clean heat measures.
210 (b) The Clean Heat Standard Equity Advisory Group shall consist of up to 10 members
211appointed by the Department. SECTION 5. If any provision of this section or its application are
212held invalid or in violation of the Constitution or laws of the United States or Massachusetts, the
213invalidity or the violation shall not affect other provisions of this section that can be given effect
214without the invalid provision or application, and to this end, the provisions of this section are
215severable.
216 SECTION 6. Within 90 days following the enactment of this act, the Department shall
217commence any necessary proceedings to implement this act.
218 SECTION 7. This act shall take effect on passage.