Mass. Utilities Seek Approval Of Long-Term Supply Contracts, Propose Cost Recovery Mechanism/Disposition of Product (Some To Be Used For Default Service)

The Massachusetts electric distribution utilities have jointly sought DPU approval for 20-year PPAs with 10 renewable energy projects totaling nearly 400 MW

The solicitations were required under statute.

All four EDCs intend to sell the renewable energy procured through the proposed PPAs through the ISO-NE spot market. The difference between the spot market revenues and the contract costs will be credited to or charged to each EDC's distribution customers.

In contrast, the EDCs intend to use the RECs procured by the PPAs to satisfy their RPS obligations associated with the provision of Basic Service (default service)

The RECs being purchased under the contracts will assist the EDCs in meeting this Class I RPS 5 obligation on a long-term basis, the EDCs said. To the extent that RPS obligations for Class I RECs fall below the aggregate level of Class I RECs already under contract, National Grid, WMECO, NSTAR Electric and Unitil would sell any excess RECs into the market

The EDCs will charge Basic Service customers for the RECs obtained under the PPAs at a periodic market price (i.e., the market price determined by each company to obtain RECs as needed to satisfy the RPS requirements and credit all distribution customers that market price (or the net proceeds received for RECs sold into the market)), thus offsetting the total costs of the PPAs, the EDCs said