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State Legislature Enacts Bill Subjecting Retail Suppliers To New "Clean Peak" Resource Obligation

August 7, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Massachusetts legislature has enacted a bill establishing a "clean peak" standard (CPS), or obligation imposed on retail electric suppliers

Enacted H4857 requires that every retail electric supplier providing service under contracts executed or extended after December 31, 2018, shall provide a minimum percentage of kilowatt-hour sales to end-use customers in the commonwealth from clean peak resources.

Not later than December 31, 2018 the Department of Energy Resources shall determine the current percentage of kilowatt-hours sales to end-use customers in the commonwealth from existing clean peak resources during the seasonal peak load hours to establish a baseline minimum percentage of kilowatt-hours sales to end-use customers that shall be met with clean peak certificates beginning on January 1, 2019. Each year thereafter, every retail electricity supplier in the commonwealth shall provide a minimum percentage of not less than an additional 0.25 per cent of sales by retail electricity suppliers in the commonwealth that shall be met with clean peak certificates, as determined by the department

Clean peak certificate is defined by the bill as, "a credit received for each megawatt hour of energy or energy reserves provided during a seasonal peak period that represents a compliance mechanism."

"Clean peak resource," is defined in the bill as, "a qualified RPS resource, a qualified energy storage system or a demand response resource that generates, dispatches or discharges electricity to the electric distribution system during seasonal peak periods, or alternatively, reduces load on said system."

The bill requires DOER to promulgate regulations to implement the CPS, including, but not limited to: (i) the establishment of seasonal peak periods; (ii) the methodology by which clean peak certificate values shall be established, which may include a process by which electric distribution companies competitively procure clean peak certificates from clean peak resources and enter into long-term contracts, subject to the approval of the department of public utilities; (iii) the establishment of a minimum percentage of clean peak certificates that must be derived from demand response resources; (iv) an alternative compliance mechanism for retail electricity suppliers; and (v) the procedures by which each retail electricity supplier shall annually submit for the department’s review a filing demonstrating its compliance with the requirements of the bill

The bill also increases the RPS incrementally (1% annually until 2019, 2% each year through 2029, and 1% annually thereafter), which results in the RPS reaching 35% by 2030

"Any electric load served under a retail electricity supply contract executed or extended not later than December 31, 2018, shall be exempt from any incremental compliance obligation under this section that occurs as a result of an increase or a new requirement imposed on or after January 1, 2019 on the minimum percentage of kilowatt-hour sales to end-use customers that must be derived from Class I RPS eligible resources," the bill provides

The bill requires DOER to investigate procuring an additional 1,600 MW of offshore wind

The bill establishes an energy storage "target" of 1,000 megawatt-hours to be achieved by December 31, 2025, and grants DOER authority to consider various policies to achieve such target

The bill also allows electric distribution companies to hold a competitive solicitation for electric distribution system resiliency non-wires alternatives from third party developers.

The bill has been enacted by both houses and laid before the Governor

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