MA
Massachusetts Senate Bill S2263

Massachusetts 2025-2026 Regular Session

Massachusetts Senate Bill S2263 Compare Versions

Only one version of the bill is available at this time.
OldNewDifferences
11 1 of 1
22 SENATE DOCKET, NO. 2578 FILED ON: 1/17/2025
33 SENATE . . . . . . . . . . . . . . No. 2263
44 The Commonwealth of Massachusetts
55 _________________
66 PRESENTED BY:
77 William J. Driscoll, Jr.
88 _________________
99 To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
1010 Court assembled:
1111 The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
1212 An Act relative to the clean heat standard.
1313 _______________
1414 PETITION OF:
1515 NAME:DISTRICT/ADDRESS :William J. Driscoll, Jr.Norfolk, Plymouth and Bristol 1 of 11
1616 SENATE DOCKET, NO. 2578 FILED ON: 1/17/2025
1717 SENATE . . . . . . . . . . . . . . No. 2263
1818 By Mr. Driscoll, a petition (accompanied by bill, Senate, No. 2263) of William J. Driscoll, Jr. for
1919 legislation relative to the clean heat standard and reducing greenhouse gas emmissions.
2020 Telecommunications, Utilities and Energy.
2121 The Commonwealth of Massachusetts
2222 _______________
2323 In the One Hundred and Ninety-Fourth General Court
2424 (2025-2026)
2525 _______________
2626 An Act relative to the clean heat standard.
2727 Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
2828 of the same, as follows:
2929 1 SECTION 1. Chapter 21A of the General Laws are hereby amended by adding the
3030 2following new section:-
3131 3 Section 29. Clean Heat Standard
3232 4 (a) For the purposes of this section, as well as Sections 29A, 29B, and 29C, the following
3333 5words shall have the following meanings:
3434 6 “Clean Heat Credit,” means a tradeable, non-tangible commodity that represents the
3535 7amount of greenhouse gas reduction caused by a clean heat measure.
3636 8 “Clean heat measure,” means fuel and technologies delivered and installed to end-use
3737 9customers in Massachusetts that reduce greenhouse gas emissions. Clean heat measures shall not
3838 10include 2 of 11
3939 11 switching from one fossil fuel use to another fossil fuel use, or the use of Renewable
4040 12Natural Gas or Hydrogen. The department may adopt a list of acceptable actions that qualify as
4141 13clean heat measures.
4242 14 “The department” or “department,” shall mean the Massachusetts Department of
4343 15Environmental Protection. “Default delivery agent,” shall mean the entity designated by the
4444 16department to provide services that generate tradeable clean heat credits.
4545 17 “entity” shall mean any individual, trustee, agency, partnership, association, corporation,
4646 18company, municipality, political subdivision, or any other form of organization.
4747 19 “Heating fuel” shall mean fossil-based heating fuel, including oil, propane, natural gas,
4848 20coal, and kerosene.
4949 21 “Obligated party” shall mean (a) a natural gas utility, whether investor-owned or a
5050 22municipal utility, serving customers in Massachusetts; or (b) for other heating fuels, the entity
5151 23that makes the first sale of heating fuel into or in the sate for consumption within the state.
5252 24Electricity suppliers shall not be obligated parties.
5353 25 “Thermal sector” shall mean the residential, non-residential, commercial, and industrial
5454 26fuel use sectors.
5555 27 “Energy Burden” shall mean the annual spending on thermal energy as a percentage of
5656 28household income.
5757 29 (b) The Clean Heat Standard is hereby established. Under this program, obligated parties
5858 30shall reduce greenhouse gas emissions attributable to the Massachusetts thermal sector by 3 of 11
5959 31retiring required amounts of clean heat credits to meet the thermal sector portion of the
6060 32greenhouse Global Warming Solutions Act.
6161 33 (c) By rule or order, the Department shall establish or adopt a system of tradeable clean
6262 34heat credits earned from the delivery of clean heat measures that reduce greenhouse gas
6363 35emissions.
6464 36 (d) An obligated party may obtain the required amount of clean heat credits through
6565 37delivery of eligible clean heat measures, through contracts for delivery of eligible clean heat
6666 38measures, through the market purchase of clean heat credits, or through delivery of eligible clean
6767 39heat measures by a designated statewide default delivery agent.
6868 40 (e) The department shall establish a system of recognition for clean heat credits pursuant
6969 41to this section.
7070 42 SECTION 2. Said Chapter 21N of said General Laws is further amended by inserting the
7171 43following new section:
7272 44 Section 29A. Compliance with the Clean Heat Standard
7373 45 (a) Required Amounts:
7474 46 (1) The department shall establish the number of clean heat credits that each obligated
7575 47party is required to retire each calendar year. The size of the annual requirement shall be set at a
7676 48pace sufficient for the thermal sector to achieve lifecycle carbon dioxide equivalent (CO2e)
7777 49emission reductions consistent with the building sector sub-sector limits for 2030 and thereafter.
7878 50 (2) Annual requirements shall be expressed as a percent of each obligated party’s
7979 51contribution to the thermal sector’s lifecycle CO2e emissions in the previous year with the 4 of 11
8080 52annual percentages being the same for all parties. To ensure understanding among obligated
8181 53parties, the Department shall, in a timely manner, publicly provide a description of the annual
8282 54requirements in plain terms.
8383 55 (3) The Department may adjust the annual requirements for good cause after notice and
8484 56opportunity for public process. Good cause may include a shortage of clean heat credits or undue
8585 57adverse financial impacts on particular customers or demographic segments. Any downward
8686 58adjustment shall be allowed for only a short, temporary period.
8787 59 (b) Annual Registration:
8888 60 (1) The Department may adjust the annual requirements for good cause after notice and
8989 61opportunity for public process. Good cause may include a shortage of clean heat credits or undue
9090 62adverse financial impacts on particular customers or demographic segments. Any downward
9191 63adjustment shall be allowed for only a short, temporary period.
9292 64 (2) At a minimum, the Department shall require registration information to include legal
9393 65name, doing business as name if applicable, municipality, state, type of heating fuel sold, and the
9494 66volume of sales of heating fuels into or in the State for final sale or consumption in the State in
9595 67the calendar year immediately preceding the calendar year in which the entity is registering with
9696 68the Department.
9797 69 (3) Each year, and not later than 30 days following the annual registration deadline
9898 70established by the Department, the Department shall share complete registration information of
9999 71obligated parties with the Department of Environmental Protection for purposes of conducting
100100 72the Massachusetts Greenhouse Gas Emissions Inventory and Forecast. 5 of 11
101101 73 (4) The Department shall maintain, and update annually, a list of registered entities on its
102102 74website that contains the required registration information, except that the public list shall not
103103 75include heating fuel volumes reported.
104104 76 (5) For any entity not registered, the first registration form shall be due 30 days after the
105105 77first sale of heating fuel to a location in Massachusetts.
106106 78 (6) Clean heat requirements shall transfer to entities that acquire an obligated party.
107107 79 (c) Equitable distribution of clean heat measures:
108108 80 (1) The Clean Heat Standard shall be designed and implemented to enhance social equity
109109 81by minimizing adverse impacts to low-income and moderate-income customers and those
110110 82households with the highest energy burdens. The design shall ensure all customers have an
111111 83equitable opportunity to participate in, and benefit from, clean heat measures regardless of
112112 84heating fuel used, income level, geographic location, or homeownership status.
113113 85 (2) A substantial portion of clean heat credits retired by each obligated party shall be
114114 86sourced from clean heat measures delivered to low-income and moderate-income customers. The
115115 87portion of each obligated party’s required amount needed to satisfy the annual Clean Heat
116116 88Standard requirement shall be at least 20 percent from low-income customers and 20 percent
117117 89from moderate-income customers. The definitions of low-income customer and moderate-
118118 90income customer shall be set by the Department in consultation with the Equity Advisory Group
119119 91and in alignment with other existing definitions 6 of 11
120120 92 (3) The Department may consider frontloading the credit requirements for low-income
121121 93and moderate-income customers so that the greatest proportion of clean heat measures reach
122122 94lowincome and moderate-income customers in the earlier years.
123123 95 (4) In order to best serve low-income and moderate-income customers, the Department
124124 96shall have authority to change these portions and the criteria used to define low-income and
125125 97moderateincome customers for good cause, after notice and opportunity for public process.
126126 98 (5) In determining whether to exceed the minimum percentages of clean heat measures
127127 99that must be delivered to low-income and moderate-income customers, the Department shall take
128128 100into account participation in other government-sponsored low-income and moderate-income
129129 101weatherization programs.
130130 102 (6) A clean heat measure delivered to a customer qualifying for a government-sponsored,
131131 103low-income energy subsidy shall qualify for clean heat credits required by subdivision (2) of this
132132 104subsection.
133133 105 (d) The Department shall designate the default delivery agent. The default delivery agent
134134 106shall be a single statewide entity capable of providing a variety of clean heat measures and
135135 107contracted for a multiyear period through a competitive procurement process. The entity selected
136136 108as the default delivery agent may also be a market participant but shall not be an obligated party.
137137 109 (1) By rule or order, the Department shall adopt annually the cost per clean heat credit to
138138 110be paid to the default delivery agent by an obligated party that chooses this option. In adjusting
139139 111the default delivery agent credit cost, the Department shall consider the default delivery agent’s
140140 112anticipated costs to deliver clean heat measures and costs borne by customers, among other 7 of 11
141141 113factors determined by the Department. Changes to the cost of credits shall take effect not less
142142 114than 180 days after adopted.
143143 115 (2) All funds received from noncompliance payments pursuant to subsection (e)(2) of this
144144 116section shall be used by the default delivery agent to provide clean heat measures to low-income
145145 117customers.
146146 118 (e) Enforcement: (1) The Department shall have the authority to enforce the requirements
147147 119of this section and any rules or orders adopted to implement the provisions of this section. The
148148 120Department may use its existing authority under this title. As part of an enforcement order, the
149149 121Department may order penalties and injunctive relief.
150150 122 (2) The Department may order an obligated party that fails to retire the number of clean
151151 123heat credits required in a given year, including the required amounts from low-income and
152152 124moderate-income customers, to make a noncompliance payment to the default delivery agent.
153153 125The per-credit amount of the noncompliance payment shall be three times the amount established
154154 126by the Department under this section for timely per-credit payments to the default delivery agent.
155155 127 (3) Any statements or other representations made by obligated parties related to
156156 128compliance with the Clean Heat Standard are subject to the Department’s enforcement authority,
157157 129including the power to investigate and assess penalties, under this title.
158158 130 (f) The Department shall establish requirements for the types of records to be submitted
159159 131by obligated parties, a record retention schedule for required records, and a process for
160160 132verification of records and data submitted in compliance with the requirements of this section. 8 of 11
161161 133 (g) After the adoption of the rules implementing this section, the Department shall submit
162162 134a written report to the joint Committee on Telecommunications, Utilities, and Energy detailing
163163 135the efforts undertaken to establish the Clean Heat Standard pursuant to this section. On or before
164164 136August 31 of each year following the year in which the rules are first adopted under this section,
165165 137the Department shall submit to the standing committees a written report detailing the
166166 138implementation and operation of the Clean Heat Standard. This report shall include an
167167 139assessment on the equitable adoption of clean heat measures required by this section, along with
168168 140recommendations to increase participation for the households with the highest energy burdens.
169169 141 SECTION 3. Said Chapter 25A of said General Laws is further amended by inserting the
170170 142following new section:
171171 143 Section 29B. Tradeable Clean Heat Credit
172172 144 (a) By rule or order, the Department shall establish or adopt a system of tradeable clean
173173 145heat credits that may be earned by reducing greenhouse gas emissions through the delivery of
174174 146clean heat measures. While credit denominations may be in simple terms for public
175175 147understanding and ease of use, the underlying value shall be based on units of carbon dioxide
176176 148equivalent (CO2e). The system shall provide a process for the recognition, approval, and
177177 149monitoring of the clean heat credits. The Department shall perform the verification of clean heat
178178 150credit claims.
179179 151 (b) Clean heat credits shall be based on the lifecycle CO2e emission reductions that result
180180 152from the delivery of eligible clean heat measures to end-use customer locations into or in
181181 153Massachusetts. For clean heat measures that are installed, the value of the clean heat credits in 9 of 11
182182 154each year shall be the lifecycle CO2e emissions of the heating fuel avoided by the installation of
183183 155the measure, minus the lifecycle CO2e emissions of the energy that is used instead.
184184 156 (c) To promote certainty for obligated parties and clean heat providers, the Department
185185 157shall, by rule or order, establish a schedule of lifecycle emission rates for heating fuels and
186186 158eligible clean heat measures. The schedule shall be based upon the best available science and
187187 159determined subsequent to notice and an opportunity for public comment. Clean heat measures
188188 160eligible to meet the standard shall include air- and water-sourced heat pumps, ground-source heat
189189 161pumps, networked geothermal systems, heat pump water heaters, induction stoves, and heat
190190 162pump clothes dryers.
191191 163 (d) Clean heat credits shall be “time stamped” for the year in which the clean heat
192192 164measure is delivered as well as each subsequent year during which the measure produces
193193 165emission reductions. Only clean heat credits with the current year time stamp, and credits banked
194194 166from previous years, shall be eligible to satisfy the current year obligation.
195195 167 (e) Clean heat credits can be earned only in proportion to the deemed or measured
196196 168thermal sector greenhouse gas emission reductions achieved by a clean heat measure delivered in
197197 169Massachusetts. Other emissions offsets, wherever located, shall not be eligible measures.
198198 170 (g) All eligible clean heat measures that are delivered in Massachusetts shall be eligible
199199 171for clean heat credits and may be retired and count towards an obligated party’s emission
200200 172reduction obligations, regardless of who creates or delivers them and regardless of whether their
201201 173creation or delivery was required by other State policies and programs. The Department shall
202202 174determine whether the total value of a clean heat credit for an installed measure shall be claimed
203203 175in the year it is installed or whether the annual value of that credit shall be applied each year of 10 of 11
204204 176the measure’s life. The Department shall determine whether to require a certain portion of clean
205205 177heat credits be acquired each year from weatherization projects in order to further the State’s
206206 178building efficiency goals. The Department shall recommend legislative changes, if needed, to
207207 179accomplish this.
208208 180 (h) The Department shall create a registration system to lower administrative barriers to
209209 181individuals and businesses seeking to register qualified actions eligible to earn clean heat credits
210210 182and to facilitate the transfer of credits to obligated parties. The Department may hire a third-party
211211 183consultant to evaluate, develop, implement, maintain, and support a database or other means for
212212 184tracking clean heat credits and compliance with the annual requirements of obligated parties. The
213213 185system shall require entities to submit the following information to receive the credit: the
214214 186location of the clean heat measure, whether the customer or tenant has a low or moderate
215215 187income, the type of property where the clean heat measure was installed or sold, the type of clean
216216 188heat measure, and any other information as required by the Department
217217 189 SECTION 4. Said Chapter 25A of said General Laws is further amended by inserting the
218218 190following new section:
219219 191 Section 29C. Clean Heat Standard Equity Advisory
220220 192 (a) The Department shall establish the Clean Heat Standard Equity Advisory Group to
221221 193assist the Department in developing and implementing the Clean Heat Standard in a manner that
222222 194ensures an equitable share of clean heat measures are delivered to low-income and moderate
223223 195income consumers, and that low-income and moderate-income consumers who are not early
224224 196participants in clean heat measures are not negatively impacted in their ability to afford heating
225225 197fuel. Its duties shall include: providing feedback to the Department on strategies for engaging 11 of 11
226226 198low-income and moderate-income consumers in the public process around development of the
227227 199Clean Heat Standard, supporting the Department in assessing whether customers are equitably
228228 200served by clean heat measures and how to increase equity in this area, identifying actions needed
229229 201to provide better service to and mitigate the fuel price impacts calculated in section 8125 of this
230230 202title on low-income and moderate-income customers, assisting the Department in defining low
231231 203income and moderate income customers, recommending any additional programs, incentives, or
232232 204funding needed to support low-income and moderate-income customers, and organizations that
233233 205provide social services to Consumers, in affording heating fuel and other heating expenses,
234234 206providing feedback to the Department on the impact of the Clean Heat Standard on the everyday
235235 207experience of low-income and moderate income Consumers, and providing information to the
236236 208Department on the challenges renters face in being equitably served by clean heat measures and
237237 209recommendations to ensure that renters have equitable access to clean heat measures.
238238 210 (b) The Clean Heat Standard Equity Advisory Group shall consist of up to 10 members
239239 211appointed by the Department. SECTION 5. If any provision of this section or its application are
240240 212held invalid or in violation of the Constitution or laws of the United States or Massachusetts, the
241241 213invalidity or the violation shall not affect other provisions of this section that can be given effect
242242 214without the invalid provision or application, and to this end, the provisions of this section are
243243 215severable.
244244 216 SECTION 6. Within 90 days following the enactment of this act, the Department shall
245245 217commence any necessary proceedings to implement this act.
246246 218 SECTION 7. This act shall take effect on passage.