Massachusetts DOER Issues Draft Proposal On Clean Peak Standard; Seeks Comments by April 12

On Tuesday, April 2, 2019, the Massachusetts Department of Energy Resources (DOER) convened a stakeholder workshop regarding its straw proposal to implement the Massachusetts Clean Peak Standard (CPS), which requires that retail electric suppliers (including electric companies) purchase a certain amount of electric supply from eligible resources known as Clean Peak Resources (discussed below) during seasonal peak periods. The CPS is another component of Massachusetts’ encouragement of renewable energy generation and demand response technology to meet the electricity needs of ratepayers. Notably, the DOER’s draft proposal is also an exciting opportunity for the development community, as it calls for Clean Peak Resources to receive long-term, tariff-based payments from electric companies. DOER seeks initial comments on its proposal by 5 pm ET on April 12, 2019.

The CPS is part of the Massachusetts Legislature’s An Act to Advance Clean Energy (the Act), signed into law by Governor Baker in August 2018. A primary objective of the CPS is to align the deployment of clean energy generation and zero-emissions demand resources with periods of high usage to flatten electricity usage peaks, in a manner that is cost efficient for Massachusetts customers.

Under the CPS, eligible resources, or Clean Peak Resources, are limited to: (1) new RPS Class I resources in operation on or after January 1, 2019; (2) existing RPS Class I/II resources that are paired with energy storage; (3) eligible energy storage systems (including but not limited to pumped-hydro); and (4) demand response resources. All resources interconnected to the electric distribution system must be located in Massachusetts. However, resources interconnected to the transmission system may be located anywhere in the ISO-NE control area, allowing for participation by stakeholders throughout the region.

The straw proposal set forth by the DOER would allow participating resources to produce Clean Peak Certificates (CPCs), representing energy generated during daily peak windows within each season of the year, varying in length from one to four hours. Retail electricity suppliers in Massachusetts will purchase a to-be determined percentage of supply from participating resources, and receive CPCs to satisfy their obligations under the Act, or be subject to an alternative compliance payment. DOER proposes that resources will receive compensation pursuant to long-term contracts awarded through competitive procurements that will provide long-term revenue certainty, enabling reduced cost financing and increased technology deployment at lower program costs, similar to the tariff-based mechanism now effective for the SMART Program.

Stakeholders seeking to shape the regulation should pursue the opportunity to submit comments on the DOER’s draft proposal before the April 12 deadline.

For assistance with submitting comments, or for questions regarding the CPS or any other energy-related issue, please contact Andrew O. Kaplan at akaplan@pierceatwood.com or 617.488.8104; or Liam J. Paskvan at lpaskvan@pierceatwood.com or 207.791.1306.