Massachusetts
Incentives/Policies for Renewables & Efficiency
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Last DSIRE Review: 08/14/2009
| Incentive Type: |
Renewables Portfolio Standard |
| State: |
Massachusetts |
| Eligible Renewable/Other Technologies: |
Solar Thermal Electric,
Photovoltaics,
Landfill Gas,
Wind,
Biomass,
Hydroelectric,
Geothermal Electric,
Municipal Solid Waste,
Anaerobic Digestion,
Small Hydroelectric,
Tidal Energy,
Wave Energy,
Ocean Thermal,
Renewable Fuels,
Fuel Cells using Renewable Fuels
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| Applicable Sectors: |
Investor-Owned Utility,
Retail Supplier
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| Standard: | Class I (New Resources): 15% of by 2020 and an additional 1% each year thereafter
Class II (Existing Resources): 7.1% in 2009 and thereafter (3.6% renewables and 3.5% waste-to-energy)
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| Technology Minimum: | In-State, On-Site Generation: TBD by DOER |
| Credit Trading: | Yes |
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Web Site: |
http://www.masstech.org/cleanenergy/policy/rps.htm
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Authority 1:
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M.G.L. ch. 25A, § 11F
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| Date Enacted: | 11/25/1997 |
| Date Effective: | 4/2002 |
| Expiration Date: | Not specified |
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Authority 2:
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225 CMR 14.00
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| Date Effective: | 06/12/2009 |
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Authority 3:
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225 CMR 15.00
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| Date Effective: | 06/12/2009 |
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Summary:
Massachusetts' 1997 electric-utility restructuring legislation created the framework for a renewable portfolio standard (RPS). In April 2002, the Massachusetts Department of Energy Resources (DOER) adopted RPS regulations that required all retail electricity providers in the state to utilize new renewable-energy sources for at least 1% of their power supply in 2003, increasing to 4% by 2009. The RPS was significantly expanded by legislation enacted in July 2008 (S.B. 2768); this legislation established two separate renewable standards -- a standard for “Class I” renewables and a standard for “Class II” renewables.
Under the Class I RPS, all retail electricity suppliers must provide a minimum percentage of kilowatt-hours (kWh) sales to end-use customers in Massachusetts from eligible renewable energy resources installed after December 31, 1997, according to the following schedule:- 1.0% of sales by 12/31/2003
- 1.5% of sales by 12/31/2004
- 2.0% of sales by 12/31/2005
- 2.5% of sales by 12/31/2006
- 3.0% of sales by 12/31/2007
- 3.5% of sales by 12/31/2008
- 4.0% of sales by 12/31/2009
- 5.0% of sales by 12/31/2010
- 6.0% of sales by 12/31/2011
- 7.0% of sales by 12/31/2012
- 8.0% of sales by 12/31/2013
- 9.0% of sales by 12/31/2014
- 10.0% of sales by 12/31/2015
- 11.0% of sales by 12/31/2016
- 12.0% of sales by 12/31/2017
- 13.0% of sales by 12/31/2018
- 14.0% of sales by 12/31/2019
- 15.0% of sales by 12/31/2020, and an additional 1% of sales each year thereafter, with no stated expiration date
Eligible Class I resources include: photovoltaics (PV); solar thermal-electric energy; wind energy; ocean thermal, wave or tidal energy; fuel cells utilizing renewable fuels; landfill gas; energy generated by certain new hydroelectric facilities, or certain incremental new energy from increased capacity or efficiency improvements at existing hydroelectric facilities; low-emission advanced biomass power conversion technologies using fuels such as wood, by-products or waste from agricultural crops, food or vegetative material, energy crops, algae, biogas, liquid biofuels; marine or hydrokinetic energy; and geothermal energy.
The DOER has clarified the qualification process for RPS Class I Renewable Generation Facilities in its final rules and will provide forms and instructions on its website. The DOER will issue a Statement of Qualification (SQ) and once issued, the developer has four years to put the generation facility into operation. Extensions may be granted if the owner/operator submits a new SQ application, under possibly revised Regulations.
In meeting the Class I standard, retail suppliers must provide a portion of the required renewable energy from in-state, on-site systems. The DOER is carrying out a stakeholder process during the second quarter of 2009 to determine the details of this requirement.
The Class II RPS requires all retail electricity suppliers to provide annually 3.6% of kWh sales to end-use customers in Massachusetts from Class II renewables, starting in 2009. Eligible Class II renewables include systems operating before December 31, 1997, that generate electricity using PV; solar thermal-electric energy; wind energy; ocean thermal, wave or tidal energy; fuel cells utilizing renewable fuels; landfill gas; energy generated by certain existing hydroelectric facilities up to five megawatts (MW) in capacity; low-emission advanced biomass power conversion technologies using fuels such as wood, by-products or waste from agricultural crops, food or vegetative waste, energy crops, biogas, liquid biofuels; marine or hydrokinetic energy; or geothermal energy.
In addition, there is a separate Class II Waste Energy Minimum Standard that requires all retail electricity suppliers to provide annually 3.5% of kWh sales to end-use customers in Massachusetts from waste energy* starting in 2009. Eligible waste energy generation units must have and maintain a state approved recycling program, must comply with Massachusetts Department of Environmental Protection’s air pollution and solid waste management regulations, and must allocate at least 50% of any revenue received from the sale of renewable energy certificates generated to its recycling programs.
Retail electricity suppliers demonstrate compliance by submitting, in an annual compliance filing to the DOER, documentation that Class I Renewable Energy Certificates (RECs), Class II RECs and Class II Waste Energy Certificates have been secured. These energy certificates represent the environmental attributes of one megawatt-hour (MWh) of generation from an eligible facility under each class category. The most recent compliance report (2007) is available here. Retail suppliers have the option of paying an alternative compliance payment (ACP) instead of procuring the renewable energy attributes. The DOER determines ACP rates, and it increases (or decreases) annually based on the Consumer Price Index of the previous year. The following table provides the base year ACP rate and current rates:
Alternative Compliance Payment
| Year | Class I | Class II | Class II Waste Energy |
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| Base Year: Initial Rate/MWh | 2003: $50 | 2009: $25 | 2009: $10 | | Current Rate/MWh (based on previous year’s rate and adjusted up or down according to the Consumer Price Index) | $60.92 | $25 | $10 | |
S.B. 2768 also requires DOER to establish an alternative energy portfolio standard (APS). The APS, which took effect January 1, 2009, requires all retail electricity suppliers to provide annually a minimum percentage of kWh sales to end-use customers in Massachusetts from “alternative energy generating sources.” In 2009 the goal is 1% and increases to 5% by 2020 (DOER provides the yearly schedule of increments). Alternative energy generating resources include: gasification with capture and permanent sequestration of carbon dioxide; combined heat and power (CHP); flywheel energy storage; any facility which substitutes any portion of its fossil fuel source with an equal to or greater portion of an approved alternative, paper-derived fuel source; energy efficient steam technology; and any other alternative energy technology approved by the DOER. Furthermore, S.B. 2768 established several overarching state energy goals. Among these goals are: (1) meeting at least 25% of the state's electric load, including both capacity and energy, by 2020 with demand-side resources including energy efficiency, load management, demand response and generation located behind a customer's meter; and (2) meeting at least 20% of the state's electric load by 2020 through new renewable and alternative energy generation.
* Waste energy is defined as the electrical energy created from combustion of municipal solid waste.
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