LEAN Energy US | Massachusetts
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MASSACHUSETTS

Massachusetts Governor Paul Cellucci signed the nation’s first community choice legislation in 1997.  Massachusetts is also home to the country’s oldest municipal energy aggregator (MEA), Cape Light Compact, which also launched in 1997.

HISTORY

In late 1994 State Senator Mark Montigny (D-New Bedford), co-chair of the Joint Committee on Energy, introduced a Competitive Franchise bill (S.447, 1995) to allow local governments to create “Consumer Service Districts” that would procure electricity for their residents using a competitive bidding process.  His bill was based on concepts that were the brainchild of CCA pioneer Paul Fenn.  After nearly three years of debate and revision, the Utility Restructuring Act of 1997 was signed into law.

MEAs in Massachusetts are initiated by municipal elected bodies.  Aggregation programs must be developed in consultation with the Department of Energy Resources and approved by the Department of Public Utilities.  As in other states outside California, most of the Commonwealth’s aggregators focus on rate savings rather than environmental benefits CCAs in Massachusetts are initiated by municipal elected bodies. Aggregation programs must be developed in consultation with the Department of Energy Resources and approved by the Department of Public Utilities. As in other states outside California, most of the Commonwealth’s aggregators focus on rate savings rather than environmental benefits, although that is changing. In 2017, the Community Empowerment Act, meant to stimulate renewable power production at the municipal level was filed but did not pass the legislature.

Commonwealth law prohibits a profit mark-up on the energy supply portion of utility services. As a result, Massachusetts electric utilities have not opposed MEA formation.

Massachusetts is very active in the CCA space. The general perception is most new municipal aggregators are opting to be green aggregators, exceeding the state RPS by at least 5% through the use of Class 1 renewable energy credits. Most programs also offer a 100% renewable option at a small price premium. The City of Boston has applied to form its own CCA, which will make it the largest in the state, pending approval from DPU. Other Boston area towns are working on ways to optimize their CCA programs to facilitate the development of community based solar + storage projects.

CURRENT AND EMERGING ISSUES

Members of the legislature have expressed interest in the potential of MEAs to lead in renewables procurement and energy efficiency programs. The Commonwealth’s ambitious Green Communities Act (2008), top energy efficiency ranking by the ACEEE, and vigorous pursuit of rooftop solar and offshore wind development create a context for the expansion of clean power procurement by Massachusetts MEAs.

Some towns are participating in, or considering, Green Municipal Aggregation programs, which are described on this page of the Mass Energy Consumers Alliance’s web site.  In a nutshell, participants in Green Aggregation programs purchase Class I RECs to provide five percent (5%) more green power than required by the state’s RPS. Five percent is described as a target that supports more renewable energy on the local power grid while keeping the rate competitive with the electric utility. Some Green Aggregation programs also offer customers the option to purchase enough Class I RECs to offset 100% of their usage.

A 2018 paper on GMA from CASS CEA can be found here. This map from the report shows the recent state of GMA in Massachusetts as levels of additional Class 1 content.

At the October 4, 2017 City Council meeting, the Boston City Council voted unanimously to authorize the city to adopt Community Choice Energy with the goal of significantly ramping up the consumption of renewable energy across the city. The order calls for an aggregation plan with a new default option that includes 5% more renewable energy sources than minimum state standards which currently stand at 12%, as well as an opt-in option of 100% renewable energy. About 200,000 residential accounts and 21,000 small business accounts could be in play in Boston.

The City of Newton, population ~ 80,000 is developing a plan for a new electricity program to be named Newton Power Choice. Customers will receive a standard amount of renewable electricity above the state requirement, with that amount TBD as of April, 2018. Customers can further choose to opt up to 100% renewable or down to no additional renewable. Renewable energy will come from New England-based renewable energy projects. A public hearing will be conducted at the May 16th, 2018 Massachusetts Department of Public Utilities (DPU).

Rate Spikes in NEMA (Northeast Massachusetts) have resulted in higher rates due to an increase in the cost of capacity, a large component of the cost of electricity supply. The capacity charge, determined in the Forward Capacity Market (FCM) is a reliability charge paid by retail customers to power generators. It is intended to ensure that there will be sufficient generation capacity to meet demand on the hottest and coldest days of the year. The spike in the FCM is expected to last a year or two in the NEMA load zone and will more than double in price, which represents over 30 percent of the overall supply rate. These increases have made it more difficult for some MEA’s to remain competitive in cost with IOU product, National Grid’s Basic Service, and caused one of the first GMA’s in the region, Melrose Community Energy Aggregation, to go dormant until at least late 2018.

FAST FACTS
  • By 2016, more than one-eighth of the state’s power was generated with renewable energy, including distributed (small scale, customer-sited) generation.
  • The Renewable Portfolio Standard for new (Class 1) resources is 16% by 2020, rising by 2 percentage points per year thereafter until 2030, when the percentage switches to 1% annually.
  • The Cape & Vineyard Electricity Cooperative was formed in 2007 as a sister agency to the Cape Light Compact for the stabilization of electricity rates and the development of renewable generation.
  • By 2016 the Cape & Vineyard Electricity Cooperative had installed 32 solar PV projects with 28 MW of capacity to serve its customers.
LEGISLATION (Partial List)
  • Potential legislation of note: The Attorney General’s Office announced recently that their office plans to file legislation abolishing residential competitive electric markets, with the exception of municipal aggregation (as per Maggie Downey, Cape Light Compact.
  • The Utility Restructuring Act of 1997 created the possibility of retail choice through municipal aggregation and through market aggregation.  See General Law Chapter 164, Section 134.
  • The goal of the Green Communities Act of 2008 is to help Massachusetts cities and towns find clean energy solutions that reduce long-term energy costs and strengthen local economies. See General Law Chapter 169.
OTHER HELPFUL LINKS

CCA-Enabling Legislation: Acts 1997, Chapter 164

U.S. Energy Information Administration, Massachusetts State Energy Profile

Massachusetts Department of Energy Resources (DOER)

Green Energy Consumers Alliance

Cape & Vineyard Electricity Cooperative (A non-profit that assists its 20 member communities in financing renewable energy and energy efficiency projects)

Medford Go Green Initiative

Colonial Power Group (Aggregation consulting firm)

Department of Energy Resources (Mission: creat a clean, affordable and resilient energy future for the Commonwealth)

Department of Public Utilities (Regulates IOUs and MEAs)

Energy and Environmental Affairs Department (Cabinet-level office  that oversees the environmental and energy agencies)

Green Communities Program  (A program of the Energy and Environmental Affairs Department)

Local Power, Inc. (Paul Fenn’s company web site.  Fenn is the founder of the Community Choice movement.)

MAPC Clean Energy Guide (Resources for greening a community from the Metropolitan Area Planning Council.)

Mass Energy Consumers Alliance (A non-profit whose mission is to make energy more affordable and environmentally sustainable.)

Mass.gov Municipal Aggregation Page

New England Coalition for Affordable Energy (advocates for the expansion of the region’s natural gas and clean electricity infrastructure)

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Updated 6/26/2018