Massachusetts increases renewable energy incentives

Energy legislation signed by Massachusetts Governor Deval Patrick earlier this month creates new opportunities for renewable energy projects in New England.

Finally enacted as Senate Bill 2395, the bill titled "An Act relative to competitively priced electricity in the Commonwealth" (37-page PDF) represents a combination of legislative proposals offered during the 2012 session.  The Act expands opportunities for renewable energy and energy efficiency, while seeking to manage increases in the cost of energy to consumers.

A number of the Act's provisions improve opportunities for renewable electricity production in Massachusetts and other New England states.  Building on the Green Communities Act of 2008, the new law increases the amount of electricity that electric distribution companies may purchase from renewable generating facilities under long-term contracts.  Previous law had required utilities to procure up to 3% of their electricity through long-term power purchase agreements with independent renewable energy developers.

The 2012 act amends the Green Communities Act by requiring distribution companies to solicit 10 to 20-year power purchase agreements from renewable developers for up to an additional 4% of the utilities' annual load.  By the end of 2016, the Commonwealth's distribution companies will conduct two rounds of joint solicitations for the new contracts.  Unlike previous renewable PPA negotiations such as led utility National Grid to select offshore wind developer Cape Wind as a renewable energy supplier, the new contracts must be negotiated through a competitive bid process.

The new law also provides a boon for distributed generation, requiring 10% of the newly-mandated supply to come from newly developed, small, emerging or diverse renewable energy distributed generation facilities located in its service territory.  Standards for these distributed generation projects require a maximum project capacity no greater than 6 megawatts.  Eligible distributed generation projcts cannot be net metering facilities, and must rely on a technology with no more than 30 megawatts of installed capacity in Massachusetts as of April 2012.

Under the Massachusetts renewable portfolio standard, projects eligible for this incentive may be built in any New England state, New York, or eastern Canada.