2019 in review

Here's a roundup of some of the items published on this blog in 2019 that have drawn significant interest:

• The enactment of a portfolio of Maine energy legislation that significant reformed the state's electricity renewable portfolio standard, long-term contracting programs, net energy billing program, and climate policy.
• Increasing public recognition that most of Maine's greenhouse gas emissions arise from the direct combustion of fossil fuels in the transportation and heating sectors, and the need to reduce transportation- and heating-related efforts through "beneficial electrification" or other means.
• Action by the United States to withdraw from the United Nations' Paris Climate Agreement.
• A federal proposal to "reform PURPA" or amend regulations adopted in implementation of a federal law designed to encourage cogeneration and renewable power production.
• Offshore wind procurement processes in Massachusetts and elsewhere.
• Growth in deployment of electric energy storage, following federal regulators' adoption of rules and state legislatures' enactment of incentive programs.
• Federal regulation and enforcement of market manipulation and mandatory reliability standards for the bulk electric system.
• A federal appellate court ruling, Hoopa Valley Tribe v. Federal Energy Regulatory Commission, reshaping a common practice in hydropower licensing by holding that the states and applicants for water quality certifications cannot indefinitely stall federal time limits for state action by repeatedly withdrawing and resubmitting their applications.

Will these trends continue in 2020?

PNGTS applies for Westbrook XPress Phase I pipeline project

An interstate natural gas pipeline system bringing gas from eastern Canada into Maine has asked U.S. regulators for approvals necessary for a project that would marginally increase the system's capacity to bring gas to Maine and the New England market.

At issue is Portland Natural Gas Transmission System (PNGTS), a pipeline that spans New England from the Canadian border to pipeline connections in New Hampshire, Maine, and Massachusetts. Its facilities include 142 miles of wholly-owned mainline from an interconnection with Trans-Québec & Maritimes Pipeline Inc. at the U.S./Canada border to Westbrook, Maine plus two laterals, as well as 101 miles of mainline from Westbrook to Dracut, Massachusets, which PNGTS owns jointly with another interstate pipeline, Maritimes & Northeast Pipeline, L.L.C. PNGTS operates pursuant to a number of federal approvals, including a certificate issued by the Federal Energy Regulatory Commission and a Presidential Permit authorizing its facilities for importing gas from (or exporting gas to) Canada.

On December 21, PNGTS applied to the Commission for authorization for Phase I its "Westbrook Xpress Project," which would increase the certificated capacity on the northern portion of its system from Pittsburg, New Hampshire, to Westbrook, Maine, by 42.482 million cubic feet per day (MMcf/d), effective November 1, 2019. The pipeline's application includes both public materials and materials that are protected against public disclosure as "controlled unclassified information", including privileged information and "critical energy infrastructure information."

In the public materials, PNGTS describes continued increased demand for natural gas: "Growing demand for natural gas for space heating, industrial processes and electric generation is driving a commensurate demand for incremental pipeline deliverability from abundant North American supply basins." PNGTS says its Westbrook XPress project "will provide access to, and allow for the transportation of, natural gas supplies from key North American supply basins such as Marcellus, Utica, and others" via Canadian pipelines. The company describes its Westbrook Xpress project is "a solution to meet this growing demand in areas of North America that have some of the highest residential gas prices in the winter." It envisions two distinct phases of the project: Phase I with an incremental 42.482 million cubic feet per day of certificated capacity, with an anticipated Phase II to bring an incremental 62.989 million cubic feet per day of capacity.

The Commission has docketed PNGTS's application for Phase I of the Westbrook XPress project as Docket No. CP19-32, and has issued public notice of the opportunity to intervene or comment through 5:00 pm Eastern Time on January 29, 2019.

Maine microgrid legislation proposed

Could Maine unlock the potential of local energy grids through legislative action? As the 129th Maine Legislature begins its first regular session, legislators will consider at least one bill designed to encourage "microgrids." As an alternative or complement to traditional central electric utility development, microgrids are considered to be one key component of the "smart grid," capable of improving power reliability and quality, increasing system energy efficiency, and providing the possibility of grid-independence to individual end-user sites.

While the U.S. electric industry of the 20th century was characterized by consolidation of utility service into large utility service territories, microgrids represent an alternative or complementary model for connecting customers to energy resources. The U.S. Department of Energy defines a "microgrid" as "a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or island-mode.’’ The Energy Department notes that microgrids can provide consumers benefits such as backup for the grid in case of emergencies, cost reduction, energy independence, reduced environmental impacts, and integration of local resources like small-scale generation or electric storage. Other states, including New York and Massachusetts are taking action to facilitate the development of microgrids, as is the federal government.

The 129th Maine Legislature will consider a bill known as LD 13, An Act To Allow Microgrids That Are in the Public Interest. Sponsored by Representative Michael Devin of Newcastle, the bill defines a “new microgrid” as “a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the electric grid and can connect and disconnect from the electric grid to enable the new microgrid to operate in both electric grid-connected mode and nongrid-connected mode, also referred to as island mode, and that is constructed after October 1, 2019.”

LD 13 would create a process through which the Maine Public Utilities Commission would approve the construction and operation of a new microgrid, if the Commission found that the operation of the new microgrid to be in the public interest and that other defined criteria were satisfied. These additional criteria include that the new microgrid will serve a total load of no more than 10 megawatts, that the small-scale electrical generation sources located close to where the generated electricity is used must meet Maine’s renewable portfolio standard, that there is a relationship between the proposed new microgrid operator and consumers within the area to be served by the proposed new microgrid, and that the reliability and security of the electric system will not be negatively affected. The criteria also require that the person proposing the new microgrid must have financial capacity and technical capability to operate the microgrid, and that the proponent can’t be an investor-owned transmission and distribution utility or its affiliate or affiliated interest.

LD 13 would also amend an existing law which currently gives transmission and distribution utilities the right to construct or maintain electric lines in, upon, along, over, across or under a road, street or other public way, but which generally makes it harder for entities other than transmission and distribution utilities to construct or maintain electric lines in roads. The amendment would extend the transmission and distribution utilities’ rights to a new category of people: those who construct, maintain or operate a new microgrid approved by the Commission.

The Legislature has referred LD 13 to its Joint Standing Committee on Energy, Utilities and Technology. As of January 3, the Committee had not yet scheduled a public hearing on the bill.

Feds reap $405 million offshore wind bidding bonanza

In what the Trump administration has called a "bidding bonanza", the latest federal auction of rights to lease ocean space for offshore wind development has brought $405 million in winning bids.

On December 14, 2018, the federal Bureau of Ocean Energy Management conducted its eighth competitive lease auction for renewable energy in federal waters. At stake were the rights to lease three areas totaling about 390,000 acres over the Outer Continental Shelf offshore Massachusetts.
The three lease areas in question are located 19.8 nautical miles from Martha’s Vineyard, 16.7 nautical miles from Nantucket, and 44.5 nautical miles from Block Island. These sites were previously offered for leasing through a federal auction in 2015, but went unsold at that time.

Eleven companies participated in the auction by submitting bids, out of a total of nineteen companies that had been deemed qualified to bid. The three provisional winners were Equinor Wind US, LLC  and Mayflower Wind Energy, LLC (each bidding $135 million) and Vineyard Wind, LLC (bidding $135.1 million). These amounts are significantly higher than any previous federal auction for offshore wind sites has yielded; the previous record winning bid was just over $42 million in December 2016 for a lease area offshore New York.

After the Department of Justice and Federal Trade Commission perform an anti-competitiveness review of the auction results, each winning bidder will be required to pay the winning bid amount to the Bureau and to post financial assurance. In exchange, each winning bidder will receive a lease with a preliminary term of one year, during which the lessee may submit a Site Assessment Plan (SAP) to BOEM for approval. Under the regulations governing the federal leasing process, the SAP describes the buoys or other facilities a lessee plans to deploy to assess the lease area's wind resources and ocean conditions. After BOEM approves a lessee's SAP, the lessee may submit a detailed Construction and Operations Plan (COP) to BOEM within four and a half years for approval. When presented with a COP, BOEM will conduct an environmental review. Finally, after BOEM approves any COP, the lessee will have a 33-year term to construct and operate the project.

Tide Mill Institute 2018 symposium

Tide Mill Institute holds its 14th annual conference on November 10, 2018, in Beverly, Massachusetts. The symposium -- "Creating Tide Mills -- Then and Now", features educators, historians, environmentalists, archeologists and others interested in tidal power and its history.

Tide Mill Institute exists to advance the appreciation of tide mill history and technology by encouraging research, by promoting appropriate re-uses of former tide mill sites, and by fostering communication among tide mill enthusiasts. Since 2005, the Institute has held an annual symposium on the past, present, and future uses of tidal energy.

This year's conference topics focus on how humans historically extracted power from the tides, as well as on efforts to use this power again in the current era. Speakers and discussions will address topics including:

• Medieval vertical and horizontal millwheels and their diffusion from mainland Europe.
• Fresh-water tidal rice mills in South Carolina.
• An in-stream tidal device in New York’s East River supplying power to the grid.
• Proposed perpetual tidal power system for Salem Massachusetts.
• A tide mill at the heart of the 1775 Battle of Brooklyn.
• Winter storm surges damage historic tide mills in Massachusetts and New York.
• Recreating gearing features of two early North Shore tide mills.
• A new tidal energy canal for Boston?
• The structure of tide mill dams.

Tide Mill Institute's 2018 symposium will be held on Saturday, November 10, 2018, from 8:30 am to 4:00 pm, at the Cummings Center in Beverly, Massachusetts. Registration materials are available on Tide Mill Institute's website. Lunch is included; attendees are encouraged to register by November 1.

US Atlantic offshore wind leasing plan up for comment

U.S. ocean energy regulators have extended a deadline for public comment on a proposed path forward for offshore renewable energy leasing on the Atlantic Outer Continental Shelf. The Bureau of Ocean Energy Management's "Proposed Path Forward for Future Offshore Renewable Energy Leasing on the Atlantic Outer Continental Shelf" lists factors the agency proposes to consider in identifying areas for possible future offshore wind leasing.

BOEM is an agency of the Department of the Interior, charged with advancing the responsible development of offshore energy and marine mineral resources covering over 1.7 billion acres of the Outer Continental Shelf. As of May 2018, BOEM has held seven competitive lease sales, yielding over $68 million in high bids for almost 1.4 million acres in federal waters. BOEM now has 13 offshore wind energy leases, capable of supporting 17 gigawatts of generating capacity, covering every state from Massachusetts to North Carolina (Cape Cod to Cape Hatteras).

On April 6, 2018, BOEM published a Request for Feedback in the Federal Register, presenting the agency's "Proposed Path Forward for Future Offshore Renewable Energy Leasing on the Atlantic Outer Continental Shelf." In that notice, the agency said it is conducting a high-level assessment of all waters offshore the United States Atlantic Coast for potential future offshore wind lease locations, and proposes to rely on specific factors to help it assess which geographic areas along the Atlantic are the most likely to have highest potential for successful offshore wind development in the next three to five years.

BOEM said its intent in publishing the Notice was "to start a conversation surrounding its approach to future renewable energy leasing on the Atlantic OCS." Its proposed factors for identifying offshore wind forecast areas include exclusionary factors (which create "no-go" areas for offshore wind) and positive factors (increasing the likelihood that location would fall within a forecast area). Under BOEM's proposal, exclusionary factors would include areas prohibited by the Outer Continental Shelf Lands Act for leasing, Department of Defense conflict areas, and charted marine vessel traffic routes. Positive factors for an areas include that it has not previously been removed, is greater than 10 nautical miles from shore, is shallower than 60 meters in depth, is adjacent to states with offshore wind economic incentives or with an interest in identifying additional lease areas, or where industry has expressed interest.

Comments on BOEM's proposed path forward for offshore renewable energy leasing on the Atlantic were slated to be due on May 21, but on May 18, 2018, the Bureau of Ocean Energy Management announced that it would accept comments through July 5, 2018.

BOEM says this "Atlantic assessment is intended to inform future area identification processes, not replace them" -- so after reviewing comments it receives, BOEM will coordinate with its intergovernmental renewable energy task forces and conduct additional stakeholder outreach.

BOEM proposes Massachusetts offshore wind lease auction

U.S. ocean energy regulators have announced the proposed lease sale of two new areas offshore Massachusetts for commercial wind energy leasing, totaling about 390,000 acres.

On April 6, 2018, U.S. Secretary of the Interior Ryan Zinke announced that the Bureau of Ocean Energy Management would publish a Proposed Sale Notice for Commercial Leasing for Wind Power on the Outer Continental Shelf Offshore Massachusetts on April 11, 2018.

Through that Proposed Sale Notice, BOEM described its plans to conduct Atlantic Wind Lease Sale 4A. That auction would offer two lease areas offshore Massachusetts for potential commercial wind energy development: Lease OCS-A 0502 consisting of 248,015 acres, and Lease OCS-A 0503 consisting of 140,554 acres. These lease areas were previously offered in 2015, but were not sold.

The Proposed Sale Notice solicits reaffirmations of continued interest from previously qualified prospective bidders -- including 11 entities that qualified to participate in the 2015 Massachusetts lease sale. It also solicits qualification packages from any prospective bidders that BOEM has not previously qualified for a Massachusetts lease sale. The proposal also comes with a 60-day public comment period.

Following the public comment period, if BOEM proceeds with the Massachusetts lease auction, the agency will eventually publish a Final Sale Notice announcing the time and date of the lease sale. 

To date, the Bureau of Ocean Energy Management has awarded 13 commercial offshore wind leases, including sites off every state from Massachusetts to North Carolina.

US proposes offshore oil and gas leasing expansion

The Trump administration is taking steps that could ultimately lead to a significant expansion of U.S. outer continental shelf acreage available for oil and gas leasing.

Under federal law, the U.S. Bureau of Ocean Energy Management is charged with administering site leasing for energy development on the outer continental shelf. The Outer Continental Shelf Lands Act requires the Secretary of the Interior, through BOEM, to develop a five-year national plan for oil and gas sales in federal waters. The law requires the Secretary to balance criteria including environmental impacts, energy needs and resources, and adverse effects on the coastal zone.

On January 4, 2018, Secretary of the Interior Ryan Zinke announced a new Draft Proposed Program. He described its release as "an early step in a multi-year process to develop a final National OCS Program for 2019-2024," and as consistent with an April 2017 Executive Order implementing an "America-First Offshore Energy Strategy."

The Draft Proposed Program includes 47 potential lease sales -- the largest number of lease sales ever proposed for the National OCS Program’s 5-year lease schedule.  The plan includes 19 sales off Alaska, 7 in the Pacific Region, 12 in the Gulf of Mexico, and 9 in the Atlantic Region. Some of these areas have not seen leases sold in decades; for example, there have been no sales in the Atlantic since 1983 and there are no existing leases.

By contrast, the draft program includes 8 Atlantic lease sales between 2020 and 2024, covering federal waters offshore Maine, New Hampshire, Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Delaware, Virginia, North Carolina, South Carolina, Georgia, and Florida. The Pacific leases would similarly be the first sold in that region since 1984.

According to the press release announcing the draft's release, "Inclusion of an area in the DPP is not a final indication that it will be included in the approved Program or offered in a lease sale, because many decision points still remain. By proposing to open these areas for consideration, the Secretary ensures that he will receive public input and analysis on all of the available OCS to better inform future decisions on the National OCS Program."

Even if an area is offered in a lease sale, it may not draw commercial interest; even if leased, an area might not actually be used for exploration and production. But the draft plan significantly expands the acreage that would be available for leasing -- according to the Secretary, "the current program puts 94 percent of the OCS off limits," while the proposed program "proposes to make over 90 percent of the total OCS acreage and more than 98 percent of undiscovered, technically recoverable oil and gas resources in federal offshore areas available to consider for future exploration and development."

BOEM has solicited public comment on the draft plan, which will inform several further rounds of proposals and comment, before a Proposed Final Program (PFP) is considered. In the meantime, until a new program is finalized and adopted, the present 2017-2022 Five Year Program remains in effect.

Energy and electricity cooperatives on the rise?

Could energy cooperatives or other alternatives to investor-owned utilities play a larger role in connecting consumers with electricity, heating fuel and other forms of energy? Emerging technologies like microgrids and increased interest in decentralization and local governance could support a growth in consumer-owned utilities or similar cooperative structures.

When used as an adjective, "cooperative" generally means "involving mutual assistance in working toward a common goal."  In its noun form, "cooperative" can mean "a farm, business, or other organization that is owned and run jointly by its members, who share the profits or benefits."  Other definitions arise in the specific contexts of electricity and other forms of energy, but the National Rural Electric Cooperative Association cites seven core principles and values common to all cooperatives: open and voluntary membership; democratic member control; members' economic participation; autonomy and independence; education, training, and information; cooperation among cooperatives; and concern for community.  

Today in the U.S., more than 900 cooperatives in 47 states provide electric service to an estimated 42 million people in 47 states.  According to a trade association, distribution and generation and transmission cooperatives collectively own assets worth $175 billion, invest about $13 billion annually in new plant equipment, and employ 71,000 people in the U.S.  Many cooperatives serve relatively rural areas that were not previously served by other utilities, although some have grown within other utilities' territories.  This local model stands in contrast to investor-owned utilities, many of which are owned by large national or global corporations whose ultimate parent companies are based overseas.

Cooperatives or similar organizations are already part of many sectors of the economy besides electricity, including housing, financial services, agriculture, retail, fisheries, and manufacturing.  Values like local self-determination, inclusion and fair dealing can align well with the cooperative form.  Many states recognize the rights of consumers of various products or services to participate in cooperatives.  For example, a Maine statute allows any 3 or more natural persons to incorporate a consumer cooperative association to "engage in any one or more lawful mode or modes of acquiring, producing, building, operating, manufacturing, furnishing, exchanging or distributing any type or types of property, commodities, goods or services for the primary and mutual benefit of the patrons of the association, or their patrons, if any, as ultimate consumers."  This concept can broadly be applied to electricity, oil, wood, or other forms of energy.

Many states have enacted specific laws adapting electricity generation and distribution to the cooperative model.  For example, Maine law allows the creation of rural electric cooperatives, which are cooperative nonprofit membership corporations established for the purpose of supplying electricity and promoting and extending the use of electricity.  Such a cooperative can have powers including the ability to acquire electric transmission and distribution lines or systems, electric generating plants, dams, or other property determined necessary, convenient or appropriate to accomplish the purpose for which the cooperative is organized.  If it distributes and supplies gas or electric transmission and distribution service, the cooperative may be treated as a public utility under state law.  If another public utility is already furnishing or is authorized to furnish a similar service in or to a municipality, Public Utilities Commission approval would be required before the cooperative may furnish that service.

Cooperatives are already engaged in the utility sector as one form of consumer-owned utility.  Other alternatives to investor-owned utilities exist -- for example, municipal power districts or municipally owned utilities exist in some places such as Massachusetts, or public utility districts in Washington.  Whether under a cooperative or municipal form, these alternatives can be aligned with values like local self-determination and energy sovereignty -- for example, the right to choose one's own mix of energy supply resources, or manage more closely for local values.  In some cases, they can also deliver essential services like heat and power at a lower cost or with improved value (such as enhanced reliability or environmental performance) compared to traditional utility systems.

As communities look to the future, cooperatives or other alternatives to investor-owned utilities may be increasingly attractive by virtue of their alignment with the local interests consuming services like electricity.  If consumers perceive investor-owned utilities as not responsive to consumer needs, the cooperative form could continue to make gains in some areas, for example in the form of energy cooperative microgrids.  The cooperative form has significant potential to continue to expand into the energy sector.

RGGI states propose tighter carbon budget

The nine states participating in the Regional Greenhouse Gas Initiative have announced consensus on proposed revisions to that program that would provide a further 30% reduction in the regional limit on emissions by 2030, relative to 2020 levels.  The proposed regional program changes are now available for stakeholder comment, after which each participating state will follow its own specific statutory and regulatory processes to propose updates to their own carbon dioxide budget trading programs.

Nine Northeast and Mid-Atlantic states -- Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont -- currently participate in RGGI, the first mandatory market-based regulatory program in the U.S. to reduce greenhouse gas emissions.  RGGI is composed of individual CO2 budget trading programs in each state, based on each state’s independent legal authority.  The program imposes an annual aggregate cap on greenhouse emissions from covered sources like fossil-fueled power plants in participating states.  For 2017, the cap is 84.3 million short tons (62.5 million short tons adjusted for banked allowances); it declines 2.5 percent each year until 2020.  Since 2008, participating states have reduced power sector carbon emissions by nearly 50 percent, while generating more than $2.7 billion in allowance auction proceeds for reinvestment in programs to benefit consumers.

RGGI participating states periodically conduct a "program review".  Following their 2012 Program Review, the RGGI states implemented a new 2014 RGGI cap of 91 million short tons -- 45 % below the prior 2014 cap of 165 million short tons. At that time, the participating states decided to commence the next program review no later than 2016.

RGGI's 2016 Program Review is ongoing.  According to an August 23, 2017 announcement, the participating states have reached consensus on proposed changes to the program design.  Proposed changes include a regional cap of 75,147,784 tons in 2021, which will decline by 2.275 million tons per year thereafter, resulting in a total 30% reduction in the regional cap from 2020 to 2030.  The proposed changes also include modifications to the existing Cost Containment Reserve and implementation of a new Emissions Containment Reserve which would add some flexibility to the cap size.

On behalf of participating states, RGGI, Inc. has announced a meeting on September 25 to gather stakeholder input.  According to the announcement, after reviewing stakeholder comments, conducting additional economic analysis, and updating materials, each participating state is expected to execute its own statutory and regulatory process to update its own carbon budget trading program.

Deepwater Wind proposes offshore wind, battery storage for MA RFP

Massachusetts energy regulators are reviewing bids to supply clean energy from new sources -- including a combined offshore wind and energy storage project proposed by developer Deepwater Wind.

Rhode Island-based Deepwater Wind is the developer of America's first commercial offshore wind project, the 30 MW Block Island Wind Farm which began commercial operations in December 2016. Other projects in early-stage development by the company include the 90 MW South Fork Wind Farm serving Long Island and the 120 MW Skipjack Wind Farm serving Maryland.

Earlier this year, prompted by 2016 state legislation, the Massachusetts electric distribution companies, in coordination with the Massachusetts Department of Energy Resources, issued a Request for Proposals for Long-term Contracts for Clean Energy Projects pursuant to Section 83D.  Through the RFP, the Massachusetts utilities solicited proposals for clean energy generation in an amount roughly equal to 9,450,000 MWh.

According to Deepwater Wind, it responded to the Massachusetts clean energy RFP by proposing the Revolution Wind farm, paired with a battery storage system.  The company's prime proposal features 144 MW of wind generation, coupled with a 40 MWh battery system, which it says will "help to defer the need to construct costly new peaking generating facilities and controversial transmission lines."  The project would be sited on the Outer Continental Shelf off Massachusetts, about 30 miles from the mainland and about 12 miles off Martha's Vineyard, under a lease from the federal government.  It would be adjacent to Deepwater Wind’s South Fork Wind Farm.  Emphasizing flexibility and scalability, as well as the ability to complete construction in one season, alternative bids submitted by the company envisioned a larger 288 MW version of Revolution Wind and a smaller 96 MW version.

Deepwater Wind says it also intends to submit an offshore wind proposal under a separate solicitation process under way in under Section 83C of Massachusetts law, with bids due by December 2018.

Massachusetts offshore wind RFP

Massachusetts' investor-owned electric distribution companies have issued a joint Request for Proposals for offshore wind energy projects.  Through the RFP, the utilities seek proposals for 400 megawatts (or more) of qualifying offshore wind energy generation and associated transmission, with winning bidders earning 15- to 20-year long-term contracts to sell project power.   This Massachusetts offshore wind RFP is designed as the first step in a staggered procurement schedule for compliance with a 2016 state law requiring the utilities to contract for 1,600 MW of aggregate nameplate capacity of offshore renewable generation by June 30, 2027.

In 2016, the Massachusetts legislature enacted the Energy Diversity Act, adding a new Section 83C to the Green Communities Act.  Section 83C provides in relevant part, "In order to facilitate the financing of offshore wind energy generation resources in the commonwealth, not later than June 30, 2017, every distribution company shall jointly and competitively solicit proposals for offshore wind energy generation; and, provided, that reasonable proposals have been received, shall enter into cost-effective long-term contracts."

The pending RFP is the first joint solicitation under Section 83C.   Through the RFP, the distribution companies are seeking to procure a total of approximately 400 MW of Offshore Wind Energy Generation.  The RFP defines this term as:

offshore electric generating resources derived from wind that: (1) are Class I renewable energy generating sources, as defined in Section 11F of Chapter 25A of the General Laws; (2) have a commercial operations date on or after January 1, 2018, that has been verified by the Department of Energy Resources; and (3) operate in a designated wind energy area for which an initial federal lease was issued on a competitive basis after January 1, 2012.

Bids are due by noon EDT on December 20, 2017.  The RFP prescribes a three-stage review process, including an initial eligibility and threshold screening, subsequent qualitative and quantitative review, and finally "further evaluation of remaining proposals to ensure selection of viable projects that provide cost -effective, reliable Offshore Wind Energy Generation with limited risk."

Pursuant to the Department of Public Utilities order approving the solicitation process, projects will be selected for negotiation by April 23, 2018, with contracts submitted for Department approval no later than July 31, 2018.

Maine PUC releases 2015 renewable report

Maine energy regulators have released a report on the state's electricity renewable portfolio standard, presenting data from 2015.  The Maine Public Utilities Commission's Annual Report on New Renewable Resource Portfolio Requirement - Report for 2015 Activity [PDF] provides a look at Maine's renewables law, now in its tenth year on the books.  It may also inform legislative discussions later this spring about the future of Maine's renewable portfolio standard.

In 2007, the Maine legislature enacted a law requiring that specified percentages of electricity that supply Maine’s consumers come from “new” or Class 1 renewable resources, ranging from 1% in 2008 to 10% in 2017.  The law also required the Commission to report annually to the legislative energy committee on the status of this requirement and related compliance matters.

According to the report, Maine suppliers sourced approximately 891,757 renewable energy certificates or RECs, from 30 facilities, to comply with the 2015 requirement.  Of these, 20 facilities were fueled by biomass, 4 by hydropower, 3 by wind and 1 by landfill gas.  25 out of the 30 facilities were located in Maine, with 2 in New York, and one each in Connecticut, Massachusetts, and Vermont.  By REC volume, 99% came from facilities located in Maine.

The report also estimates the cost to Maine ratepayers of Maine's new renewable resource portfolio requirement.  According to the report, the cost of RECs used for compliance in 2015 ranged from "approximately $2.00 per MWh to $42.50 per MWh, with an average cost of $13.16 per MWh and a total cost of $11,738,174."  Adding in $3,018 in alternative compliance payments by one supplier, the report estimates a total cost to ratepayers during 2015 of $11,741,192.  The report translates this total cost into "an average rate impact of about one-tenth of a cent per kWh. This is equivalent to about 55 cents per month, or 1%, for a typical residential customer; $50 per month for a medium commercial customer that uses 50,000 kWh per month; and $500 per month for a large commercial/industrial customer that uses 500,000 kWh per month."

Maine law also includes a Class 2 renewable portfolio standard, requiring an additional 30% of electricity come from existing renewables and other Class 2 resources.  According to the Commission's report, the average cost of a Class 2 REC in 2015 was $0.28 per MWh, with a total cost of $965,818.  The report notes that this is "equivalent to about 5 cents per month for a typical residential customer, and $4 and $40 per month for medium and large commercial/industrial customers with the usage levels described above, respectively."

This session, the 128th Maine Legislature is considering several bills that could affect Maine's renewable energy laws, including LD 532, An Act To Remove the 100-megawatt Limit on Hydroelectric Generators under the Renewable Resources Laws, as well as LD 1185, a concept draft which "proposes to enact measures designed to update Maine's renewable portfolio standards."

Massachusetts next generation solar incentive

The Massachusetts Department of Energy Resources is developing a new solar incentive program.  DOER released its proposal for the next generation of solar incentives on September 23, 2016. 

The 2016 legislation, An Act Relative to Solar Energy, included an extension and expansion of net metering, a policy which has supported the development of most solar projects in Massachusetts to date.  But because the state's solar renewable energy certificate (SREC) program is reaching its end, the recent law also directed the Department to "develop a statewide solar incentive program to encourage the continued development of solar renewable energy generating sources by residential, commercial, governmental and industrial electricity customers."

The 2016 law specified certain required characteristics of the "next generation" solar incentive program, including that it must be one which: "promotes the orderly transition to a stable and self-sustaining solar market at a reasonable cost to ratepayers," considers underlying system costs, takes into account electricity revenues and incentives, relies on market-based mechanisms or price signals, minimizes costs and barriers, features a declining incentive framework, differentiates incentive levels, "ensures that the utility customer realizes the direct benefits of the solar incentive program," considers the value of distributed generation and encourages solar generation where it benefits the distribution system, shares program costs collectively among all ratepayers, and promotes investor confidence through long-term incentive revenue certainty and market stability.

DOER released its "Next Generation Incentive Straw Proposal" on September 23.  Highlights include:

• DOER believes that a tariff-based incentive program would be best mechanism to continue supporting solar at the lowest cost to ratepayers.
• Incentive values would be based primarily on project size, with "adders" for different types of project (based on location, off-taker, or policy considerations like promoting energy storage).
• Project eligibility criteria include being connected to the electric grid in Massachusetts, interconnected on or after January 1, 2017, and not being qualified under the previous SREC I or SREC II programs.
• Siting criteria are included - for example, ground mounted projects would be prohibited if sited in certain wetlands, prime farmlands or forest land, or permanently protected open space.
• Changes to "solar canopy" policy, to allow solar canopies to be installed on agricultural land and over canals.
• Additional support for solar facilities serving low-income properties.

DOER noted that implementing this vision would require rulemaking by DOER, as well as a proceeding before the Department of Public Utilities regarding tariffs.

DOER is accepting written comments on the proposed program design until October 28, 2016.

Massachusetts climate change executive order

Massachusetts Governor Charlie Baker signed an executive order last month setting a comprehensive approach to climate change.  Executive Order No. 569, Establishing An Integrated Climate Change Strategy for the Commonwealth, directs state agencies to take a portfolio of actions to reduce greenhouse gas emissions, protect against the impacts of climate change, and improve resilience.

The order opens with acknowledgements that climate change and associated extreme weather events present serious threats.  It also notes the state's Global Warming Solutions Act, and the greenhouse gas emissions limits mandated by that law -- a 25% reduction below 1990 levels, achieved by 2020.  Following a decision by the Massachusetts Supreme Judicial Court earlier this year, regulations under that law must establish "declining annual aggregate emissions" for greenhouse gases.

Turning to action items, Executive Order No. 569 requires the Secretary of Energy and Environmental Affairs to publish a "comprehensive energy plan" within 2 years, with an update every 5 years thereafter.

The executive order also requires the Department of Environmental Protection to issue regulations to ensure that Massachusetts meets the 2020 statewide emissions limit required by the Global Warming Solutions Act.   Pursuant to the executive order, these regulations must be finally promulgated by August 11, 2017.

Executive Order No. 569 also requires coordination between the state's Energy and Environmental Affairs and Public Safety offices, with respect to strengthening community resilience, preparing for the impacts of climate change, and preparing for and mitigating damage from extreme weather events.  Within 2 years, this coordination will result in a Climate Adaptation Plan presenting a statewide adaptation strategy.

Massachusetts energy storage report

A Massachusetts state energy office has issued a report finding that Massachusetts has the potential to develop for 600 MW of energy storage by 2025, which could lower costs, reduce carbon emissions, and improve grid reliability. Legislation earlier this year authorized the creation of an energy storage procurement target; the Department of Energy Resource’s State of Charge report could lead to further policy changes supportive of storage.

While electricity has traditionally been challenging to store efficiently, advanced energy storage technologies – such as batteries, flywheels, thermal and compressed air technologies – now allow utilities and consumers to store and release energy as needed. Last year, the Baker-Polito administration launched an Energy Storage Initiative to advance the energy storage segment of the Massachusetts clean energy industry.

This summer, the Massachusetts legislature enacted a broad energy diversification law, authorizing among other things the creation of an energy storage procurement target, if the Department of Energy Resources deems such a target prudent.  Section 15 of H.4568 requires the Department of Energy Resources to determine, by December 31, 2016, whether to set “appropriate targets for electric companies to procure viable and cost-effective energy storage systems” to be achieved by January 1, 2020. If the Department finds it appropriate to adopt procurement targets, the law requires it to do so by July 1, 2017, with reevaluations of the procurement targets not less than every 3 years.

Meanwhile, on September 16, 2016, the administration released its State of Charge report. The report found that energy storage could yield significant cost savings for Massachusetts ratepayers, reduce the impacts of peak demand on the state’s energy infrastructure, and enable improved integration of renewable resources and reduced carbon emissions.

The report recommends policy changes, ranging from regional coordination on energy storage, broadening the Alternative Portfolio Standard (APS) with respect to advanced energy storage, to using energy storage in existing energy efficiency programs or as a utility grid modernization asset, and seeking “renewables plus storage” contracts in future long-term clean energy procurements.

According to the report, adopting these recommendations could yield 600 MW of advanced energy storage technologies deployed on the Massachusetts grid by 2025, with projected ratepayer cost savings of over $800 million and approximately 350,000 metric tons reduction in greenhouse emissions over a 10 year time span.

The Department of Energy Resources will now hold a stakeholder engagement process relating to energy storage, starting with a meeting scheduled for September 27. DOER is expected to determine whether Massachusetts should establish an energy storage procurement target before the end of 2016.

Vineyard Wind offshore project changes hands

Danish fund management company Copenhagen Infrastructure Partners has acquired Offshore MW LLC, the holder of an offshore wind energy lease issued by the U.S. Bureau of Ocean Energy Management over an area south of Massachusetts.

Copenhagen Infrastructure Partners describes itself as a fund management company founded in 2012. On August 25, 2016, CIP announced that on behalf of its fund Copenhagen Infrastructure II it had acquired 100% of Offshore MW LLC.

Acquired company Offshore MW LLC is developing the Vineyard Wind project over the Outer Continental Shelf south of Massachusetts.  The site is part of the Massachusetts Wind Energy Area originally designated by BOEM for leasing in 2012.  Offshore MW won the lease rights through a competitive lease auction held by the Bureau of Ocean Energy Management on January 29, 2015, in which it submitted the winning bid for Lease Area OCS-A 0501.  That lease area covers 166,886 acres, or roughly 260 square miles of sea space in federal waters off Massachusetts. 

According to CIP, it will continue with the Massachusetts project's development.  The Vineyard Wind project could receive a boost from recently enacted Massachusetts legislation that will require utilities to purchase about 1,600 megawatts worth of offshore wind energy by 2027.  That law, known as H. 4568, "An Act to promote energy diversity," requires electric distribution companies to issue an initial joint competitive solicitation for offshore wind proposals by June 30, 2017.

Massachusetts develops next solar incentive

The Massachusetts Department of Energy Resources (DOER) is designing a new solar incentive program to encourage the continued development of solar renewable energy generating sources by residential, commercial, governmental and industrial electricity customers, based on a state law enacted this spring. The so-called "next solar initiative" program could affect the pace of solar photovoltaic project development in Massachusetts, as policymakers seek a smooth transition from the current SREC II program as it reaches full capacity.

On April 11, 2016, Governor Charlie Baker signed into law An Act Relative to Solar Energy, also known as Chapter 75 of the Acts of 2016.  The law preserved and expanded net metering, preserving the value of that policy for projects developed by residential, small commercial, municipal and government customers.

As described by the Baker administration, the law also allows DOER and the Department of Public Utilities to "gradually transition the solar industry to a more self-sustaining model." In particular, section 11 of the act directed DOER to "develop a statewide solar incentive program to encourage the continued development of solar renewable energy generating sources by residential, commercial, governmental and industrial electricity customers throughout the commonwealth."

The law prescribed twelve requisite characteristics of the solar incentive program, but left the creation of rules and regulations to DOER.  Some criteria are process-oriented, such as that the program "promotes the orderly transition to a stable and self-sustaining solar market at a reasonable cost to ratepayers," or considers underlying system costs, environmental benefits, energy demand reduction and other avoided costs provided by solar renewable energy generating facilities.

Other criteria define structural requirements for the program, such as that it "relies on market-based mechanisms or price signals as much as possible to set incentive levels," "differentiates incentive levels to support diverse installation types and sizes that provide unique benefits," and "features a known or easily estimated budget to achieve program goals through use of a declining adjustable block incentive, a competitive procurement model, tariff or other declining incentive framework."  The law also requires the program to promote investor confidence through long-term incentive revenue certainty and market stability.

After the solar bill's enactment, DOER held two public listening sessions, and solicited comments on the development of the "next solar incentive" through June 30, 2016.  Many commenters expressed support for a continuation of the SREC framework, such as "SREC III."  Other comments focused on locational issues, such as proposing policies to deter the development of projects located on farmland or other undeveloped "greenfield" sites.

DOER is expected to release a first draft of its next solar incentive program this summer.

Offshore wind in Massachusetts energy bill

The Massachusetts legislature has enacted an energy bill that will require utilities to purchase offshore wind energy by 2027.  The legislation, known as H. 4568, "An Act to promote energy diversity," has been laid before Governor Charlie Baker for signature.

Earlier this session, the Massachusetts House and Senate had passed two different bills calling for renewable energy procurement.  A conference committee reported out the final bill, H. 4568, on July 31.  Through the newly enacted law, the Massachusetts legislature has added a new program of offshore wind energy procurement. 

The final enacted bill adds a new section 83C to the state's 2008 Green Communities Act.  Among other provisions, section 83C provides, "In order to facilitate the financing of offshore wind energy generation resources in the commonwealth, not later than June 30, 2017, every distribution company shall jointly and competitively solicit proposals for offshore wind energy generation; and, provided, that reasonable proposals have been received, shall enter into cost-effective long-term contracts."

Much of the solicitation and contracting process will occur pursuant to regulations yet to be promulgated by the Department of Public Utilities.  The law provides a framework for developing and approving the competitive bidding process, and requires the schedule to "ensure that the distribution companies enter into cost-effective long-term contracts for offshore wind energy generation equal to approximately 1,600 megawatts of aggregate nameplate capacity not later than June 30, 2027."  Individual solicitations must be seek proposals for 400 megawatts or more, and may be conducted jointly with other states.

Proposed long-term contracts are subject to the review and approval of the Department of Public Utilities.  The law requires the department of public utilities to weigh the potential costs and benefits of the proposed long-term contract, and directs it to approve a proposed long-term contract "if the department finds that the proposed contract is a cost-effective mechanism for procuring reliable renewable energy on a long-term basis," taking into account factors like reliability, mitigation of price volatility, cost-effectiveness, mitigation of environmental impacts, and economic development.

The law requires the implementing regulations to be adopted by the Department of Public Utilities to "provide for an annual remuneration for the contracting distribution company up to 2.75 per cent of the annual payments under the contract to compensate the company for accepting the financial obligation of the long-term contract."  It also entitles distribution companies to cost recovery of payments made under an approved long-term contract.  Utilities may elect to to use any energy purchased under such contracts for sale to its customers and retain renewable energy certificates for their use, or may sell the energy and RECs into the market.  Any proceeds from such market re-sales will be netted against the cost of contract payments, resulting in a credit or charge to all distribution customers through a uniform fully reconciling annual factor in distribution rates.

The law also provides a variety of "outs" or circumstances under which contracts might not result, such as if a "proposal’s terms and conditions would require the contract obligation to place an unreasonable burden" on a distribution company’s balance sheet.

Notably, the law's definitions of “Offshore wind developer” and “Offshore wind energy generation” place a variety of restrictions on projects eligible for contracting.  The definitions effectively require that projects be located on the Outer Continental Shelf, in a designated wind energy area for which an initial federal lease was issued on a competitive basis after January 1, 2012, have no turbine located within 10 miles of any inhabited area, and have a commercial operations date on or after January 1, 2018, that has been verified by the department of energy resources.  This effectively limits projects to a subset of those winning recent (or future) federal Bureau of Ocean Energy Management lease auction sales.

To date, no commercial offshore wind projects operate in U.S. waters, although Deepwater Wind is currently constructing the Block Island Wind Farm off Rhode Island.   Federal programs, along with some state incentives, are available to support qualifying offshore wind projects.

Edgartown's Muskeget tidal project faces questions

A municipal tidal power project proposed for the Massachusetts island of Martha's Vineyard faces federal deadlines if its licensing process is to continue.  The Muskeget Channel Tidal Energy Project, proposed by the Town of Edgartown, is seeking a pilot project license from the Federal Energy Regulatory Commission -- but faces questions from Commission staff.

On February 1, 2011, the Town of Edgartown filed, pursuant to the Commission’s pilot licensing procedures, a draft license application for the proposed Muskeget Channel Tidal Energy Project.  The project would feature an array of 14 marine hydrokinetic tidal turbines, with a commercial generating capacity of 5 megawatts or less.

But that license application remains incomplete.  On April 1, 2011, Commission staff issued a letter requesting that Edgartown provide additional information, including details about the proposed project and multiple plans, drawings, and reports.  Over the ensuing years, Edgartown filed some responsive information, but according to the Commission, Edgartown did not file the remaining information by the deadline or provide a schedule indicating when the information would be filed after the deadline was missed.

Over two years after the deadline, on April 21, 2016, Commission staff issued a letter requiring Edgartown to show cause, within 30 days, why Commission staff should not terminate the prefiling licensing process for the project.  According to the Commission, Edgartown did not respond, but Congressman William Keating asked the Commission to extend the show cause deadline until the Massachusetts Clean Energy Commission decides whether to award the project a grant.

In a June 2 letter, Commission staff directed Edgartown to, within 30 days, provide a schedule specifying when it will file with the Commission each of the outstanding items requested in Commission staff’s April 1, 2011 letter.  The letter says, "Upon receipt of this information, Commission staff will make a determination on how to proceed with the incomplete application for the Muskeget Channel Tidal Energy Project."  For now, the prelicensing process for the Muskeget tidal project remains pending.