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.

MA net metering, Single Parcel and Subdivision rules

Massachusetts utility regulators have opened an inquiry to review the current standards and procedures by which distributed generation projects seek exceptions to the net metering rules and regulations that generally require each facility to be sited on a single parcel of land.  The case could lead to changes in the Department of Public Utilities' Single Parcel Rule and Subdivision Rule.

On March 15, 2017, the Massachusetts Department of Public Utilities issued an order opening an inquiry relating to the application of its net metering rules, which it docketed as DPU 17-22.  As described in that order, under Massachusetts statutes and regulations, "net metering allows customers to generate credits for excess electricity that net metering facilities generate."  The rules include limitations on the size of a generation facility eligible for net metering -- below 60 kW generally, or up to 2 MW for renewable projects (or 10 MW for certain public facilities).

Because the rules include project size limits, how you define the "facility" can affect its eligibility for net metering.  In one case, the Department established a "Single Parcel Rule", defining an eligible net metering facility as “the energy generating equipment associated with a single parcel of land, interconnected with the electric distribution system at a single point, behind a single meter." In 2016, the Department received 13 petitions seeking an exception to the Single Parcel Rule, an increase over three petitions in 2015 and one petition in 2014.

The Department also recognized if it was adopting parcel boundaries as a factor for defining a net metering facility, it should also set a date after which it would presume that the further subdivision of parcels was to game the net metering rule.  In its Subdivision Rule, the Department required that any customer who seeks to establish a net metering facility on a parcel of land that was subdivided after January 1, 2010, file a petition demonstrating that the subdivision was not for the purpose of creating multiple parcels specifically to support multiple net metering facilities.

But in a move that could lead to changes to these regulations, in its March 15 order opening inquiry, the Department identified a series of questions on which it seeks written comment.

Questions posed by the Department relate to the aggregation of capacity, blanket exemptions and case-by-case exemptions, the treatment of multiple facilities on one parcel, the treatment of a single facility on multiple parcels,  possible methods of streamlining submission and review of petitions for exceptions from the net metering rules and regulations, process requirements for petitions for exemptions, and challenges in allocating credits to multiple accounts and related solutions.

The Department has requested initial written comments no later than 5:00 p.m. on April 10, 2017.  It has also scheduled a technical conference for May 3, 2017.

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.

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.

MA considers expanding net metering for small hydro

Massachusetts energy regulators are investigating whether to allow more small hydroelectric projects to benefit from a policy known as "net metering."
 
Net metering allows electric customers with their own small generators to sell the power they produce to the utility grid, offsetting the customer's bill for power purchased from the grid.  This effectively incentivizes electricity consumers to develop customer-sited generation that can generate power at a lower cost than grid-delivered power.  Many states have adopted net metering programs to encourage renewable and other distributed generation.  Most states' programs are restricted by size (a project's maximum generating capacity, or the program's total enrolled capacity) and by technology (e.g. solar photovoltaics usually qualify, but coal usually doesn't).

Massachusetts' current version of net metering allows customers to qualify by installing any type of generating facility, including a hydroelectric facility, as long as the facility is smaller than 60 kilowatts.  Size limits are larger for certain projects powered by wind, solar photovoltaics, or anaerobic digestion, as well as for farm-related "Agricultural Net Metering Facilities" -- up to 2 megawatts for most such projects, or 10 MW for some publicly owned facilities.  But under Massachusetts' current rules, hydroelectric facilities that are larger than 60 kW and are not Agricultural Net Metering Facilities are not eligible for net metering.

Whether that restriction makes sense is now the subject of an investigation by the Massachusetts Department of Public Utilities.  The 2014 enactment by the state legislature of An Act Relative to Credit for Thermal Energy Generated with Renewable Fuels, Chapter 251 of the Acts of 2014, directed the Department to study the feasibility, impacts and benefits of allowing customers to net meter electricity generated by micro-hydro and other small hydroelectric facilities.  The Act directed the Department to develop a report based on this analysis, and to submit the report to the legislature by July 1, 2015.

The Massachusetts DPU opened its investigation on October 16, 2014.  In the Department's order opening the investigation, it posed 13 questions to the public.  Topics ranged from the proper definition of "small hydroelectric" to the pros and cons of allowing new or existing small hydroelectric projects to net meter.   Written comments on these questions are due by the close of business on December 5, 2014.  In addition, the DPU held a technical conference on November 7 at which these issues were explored.

What will the Massachusetts Department of Public Utilities find regarding net metering and small hydroelectric projects?  How will the state legislature respond to the DPU's report expected this coming summer?  Will Massachusetts expand net metering opportunities for small hydropower?

Massachusetts to develop wind energy siting guidance

As interest continues to grow in the generation electricity from wind energy, the siting of wind projects is an important issue.  While producing power from wind energy avoids the use of fossil fuel along with the emission of carbon dioxide and other pollutants, society has an interest in ensuring that wind projects are developed responsibly and in appropriate locations.  Regulation of sites for wind energy development generally occurs at the state and local levels, and some observers - both wind developers and opponents of specific wind projects - have complained of bad results from a patchwork of regulations, some of which are not based on good science.

Wind turbines in Ipswich, MA, visible across Plum Island Sound from the Parker River National Wildlife Refuge.

In Massachusetts, the state Department of Public Utilities has launched an initiative to remedy this defect.  On October 31, 2013, the Department opened an investgation into best practices for the siting of land-based wind energy facilities.  According to the Department's notice:

The investigation will result in the development of wind energy facility siting guidance based on sound scientific, technical, and policy information. Specifically, the Department will examine the following topics related to land-based wind energy facilities: design, environmental and human health, safety, construction impacts, socio-economic impacts, decommissioning, and the review process for wind projects.

The Department has docketed this case as D.P.U. 13-165, Investigation into Best Practices for Siting of Land-Based Wind Energy Facilities, and has solicited public comment by December 6. Following receipt and review of the comments, the Department anticipates holding public hearings beginning in January.

The guidelines developed through this process will shape the siting and development of land-based wind projects in Massachusetts.  Massachusetts has a strong commitment to renewable energy, as evidenced in the Green Commnities Act, its renewable portfolio standard, and in public sentiment.  That said, to date most wind power consumed in Massachusetts comes in the form of renewable energy certificates representing power generated from wind facilities in Maine and other states, largely due to the relative difficulty of siting a wind energy project in Massachusetts.  Will this process lead to more wind energy development in Massachusetts?

 

Massachusetts may revamp solar and distributed generation interconnection process

Being able to interconnecting electricity generating units to the grid is almost always necessary.  Even islands - literal or figurative - often have their own microgrids to which new generation must be interconnected, but usually the electric grid in question is run by a public utility.

Despite federal and state policies designed to promote the development of solar energy projects and other renewable and efficient distributed generation, many utilities are failing to process interconnection applications within the timelines required by their tariffs.  (As I previously wrote, regulators in the Canadian province of Ontario are currently wrestling with this problem as well.)  A recent filing by the energy office of the Commonwealth of Massachusetts appears likely to trigger reforms to the process for interconnecting new distributed generation to the grid.

The Massachusetts Department of Energy Resources’s filing consists of a consultant's report commissioned by DOER and the Massachusetts Clean Energy Center, coupled with a formal petition requesting that the Department of Public Utilities open an investigation on interconnection procedures.

Prepared by consulting firm KEMA, the report provides a snapshot of the current interconnection process, as well as offering recommendations for improvements.  The report is based on surveys of distributed generation developers and utilities.  The report’s key findings include:

• Significant Increase in New Distributed Generation:  Recent years have brought a significant increase in the volume of applications for interconnection of distributed generation in Massachusetts.  The volume of interconnection applications reviewed grew by a factor of 7 between 2004 and 2010 - a significant increase in interconnection requests.
• Current Process Can't Handle the Volume:  A very high percentage of utility reviews of interconnection requests have missed key deadlines.  For example, in 2009, 100% of the interconnection application review conducted under utilities’ standard process exceeded the timeline specified in the utility’s tariffs.  Currently, utilities face no penalty for missing these deadlines.  As the report notes, “There is no consequence to the utilities for delays, even though there are consequences – often significant – to the DG applicants.”
• Interconnection Costs Cause Frustration:  While current application fees and witness test costs may be reasonable, the report notes that applicants are generally dissatisfied with the costs of the interconnection facilities upgrades and equipment required by utilities.  Disputes over the nature and cost of new and upgraded facilities increase costs, add delays, and further chill distributed generation development through increased uncertainty.

The report notes that these failings come despite significant policy support for distributed generation:

In summary, the meta-message of this report rests at the intersection of several trends.  Massachusetts has created a vibrant policy environment for DG, underpinned by one of the best interconnection processes in the country, a process which has generally worked well for most DG applicants since its introduction in 2004. Over the last seven years, however, and particularly under the Patrick Administration, the growth in DG volume has grown significantly.

Yet, our survey showed that 79% of Expedited applicants and 75% of Standard applicants are “Somewhat dissatisfied” or “Very dissatisfied” with a process they describe as long, inconsistent, and “too complicated to comment”. . . .

We define a successful process as one that meets its customer demand with high quality outcomes, within acceptable parameters of time and cost. This review demonstrates that – seven years after its introduction – the current process by which DG is interconnected in Massachusetts is no longer meeting the demands of three-quarters of its customers.

Based on these findings, the report offers recommendations to remedy the system's failure, including proceedings before the State Department of Public Utilities to redesign the interconnection process to be better suited to high-volume penetration of distributed generation.

The DOER’s petition was filed on August 18, 2011.  The Department of Public Utilities is expected to respond to the petition by opening an investigation on interconnection along the lines suggested in the report.  How that proceeding affects the experiences of utilities, distributed generation owners or developers, and ratepayers remains to be seen.

Massachusetts regulators approve utility's wind contracts

In most U.S. states, laws require utilities to include a specified amount of renewable power in the energy mix they sell customers.  These renewable portfolio standard (or RPS ) laws vary from state to state in their details, but vertically-integrated can often satisfy the RPS by entering into contracts to buy power from specific renewable projects.  For example, Massachusetts' largest utility National Grid plans to buy half of the Cape Wind offshore wind project's output to comply with the RPS.

On Friday, Massachusetts regulators approved an array of wind energy contracts proposed by the Commonwealth's second-largest utility, NStar.  The state Department of Public Utilities has been considering contracts between NStar and three wind projects:

• Iberdrola's 29 megawatt Hoosac Wind project, in the Berkshires of Massachusetts, should be running July 2012, a ten-year deal
• Iberdrola's 48 megwatt Groton Wind project near Plymouth, New Hampshire, should be running December 2012, a ten-year deal
• First Wind's 32 megawatt Blue Sky East project in Eastbrook, Maine, should be running by May 2012, a fifteen-year deal

While the agreements' pricing remains confidential, some aspects of the pricing are known.  NStar conducted a competitive bidding process to select the projects for contracting; NStar's process is said to have emphasized getting the lowest price.  It is also public that the three contracts approved on Friday are for fixed prices, meaning that unlike escalating price contracts, the price the utility pays the wind developers per kilowatt-hour will remain flat over the contracts' terms.

August 30, 2010 - Cape Wind; German solar to beat wind?

The dome at the Maine State House - currently netted for construction.

The Boston Globe editorial team has come out in qualified support of utility National Grid's proposed long-term contract with Cape Wind.  The editors note that consumers are correct to consider whether it is appropriate for them to be required pay more than 25% more for energy from renewable sources than for energy as a commodity.  They do note that because the Cape Wind contract represents about 3.5% of National Grid's load, the impact on ratepayers will be diluted -- about $1.24 per month for the average residential consumer.  After a close examination, should the Department of Public Utilities approve the deal?  The editors' answer: "no if the goal is simply to keep utility costs as low as possible in 2010 — but yes if Massachusetts wants to be a future leader in renewable technology."

Meanwhile, Germany has announced that its solar PV capacity may exceed its wind capacity by 2020.  A state energy adviser has projected that Germany will have 42 GW of installed capacity from solar photovoltaics by 2020 -- just enough to topple wind power, which is projected to reach 41.9 GW installed capacity.  Germany produces more electricity than any other nation in Europe.

June 18, 2010 - quick roundup

The town of Oxford, Maine, is looking at perhaps $25,000 in repairs needed at the dam at the former Robinson Mill. Last year, the town foreclosed on the mill property over $244,920 in back taxes from the last three years, and then voted to take possession of the mill property after the owner failed to make payments on his installment workout plan. The town expects repairs to include replacing the dam's log boom and grates, plus new decking and walkway supports. The dam maintains the water level in Thompson Lake.

The Lewiston Sun Journal reports that First Wind has canceled its presentation to the board of selectmen in Rumford, Maine. Rumford is considering a wind siting ordinance, and the Sun Journal reports that First Wind said it would be premature to present on the project before the ordinance comes out. First Wind had proposed a wind farm on Black Mountain and North and South Twin mountains, but has retooled the project after finding that the wind intensity didn't match the specified turbines.

The price of power from Cape Wind continues to make news. Now Wal-Mart Stores Inc. has intervened in the case before the Massachusetts Department of Public Utilities over the proposed Cape Wind power purchase agreement with utility National Grid. Wal-Mart is reported as saying it supports the concept behind the project, but challenges the price it would have to pay for the wind-generated electricity.