Initiative petition proponents filed with the Massachusetts Attorney General’s Office earlier this week 28 proposed initiative petitions that, if certified by the AG and endorsed by the requisite number of registered voters, could appear on the November 2018 ballot. (See this post for more details on the ballot initiative process.) Interested parties have until Friday, August 11 to (1) submit memoranda setting forth why the AG should or should not certify the measure,… More
In April, Secretary of Energy Rick Perry ordered the Department of Energy (DOE) to perform a 60-day review and produce a report regarding the reliability of the energy grid and potential concerns regarding early retirement of baseload generators. Perry’s request explicitly solicited information concerning “[t]he extent to which continued regulatory burdens, as well as mandates and tax and subsidy policies, are responsible for forcing the premature retirement of baseload power plants.” Perry has argued that government subsidies for intermittent generators such as solar and wind and onerous environmental regulations lead to premature retirements of coal and nuclear power plants,… More
Late last month, the 2nd Circuit Court of appeals rejected a challenge to Connecticut laws intended to encourage use of renewable energy. Earlier this month, Judge Manish Shah, of the Northern District of Illinois, issued a companion decision, rejecting challenges to the Illinois Future Energy Jobs Act, which grants “Zero Emission Credits” to certain facilities, “likely to be two nuclear power plants owned by Exelon in Illinois.”
(Caveat: This firm represents, in unrelated matters, a number of the generators who challenged the statute. We also represent numerous renewable energy firms generally supportive of state authority to provide incentives to renewable energy. This post is definitely agnostic about the Illinois statute. It is the broader question of state authority that interests me here.)
Like the plaintiffs in the Connecticut case, the plaintiffs here argued both that the statute was preempted and that it violates the Dormant Commerce Clause. The Court rejected both arguments. As to preemption, the importance of the decision is its preservation of state authority, even if it “substantially affects the quantity and terms of wholesale sales,” so long the program does not “directly” affect wholesale rates:
influencing the market by subsidizing a participant, without subsidizing the actual wholesale transaction, is indirect and not preempted.
As to the Dormant Commerce Clause, plaintiffs alleged that the environmental benefits of the statute were a sham, and that its real intent was simply to benefit Exelon. The Court concluded that the statute imposes neutral standards and the plaintiffs had not alleged that the agencies would implement the statute in a biased way. The Court also rejected the plaintiffs’ argument that the statute has a discriminatory intent.
Courts must “assume that the objectives articulated by the legislature are actual purposes of the statute, unless an examination of the circumstances forces [the Court] to conclude that they ‘could not have been a goal of the legislation.’”
Overall, the case, together with the 2nd Circuit decision in Klee, provides strong support for state authority to encourage renewable or low-emitting sources of energy. Individuals can argue about the merits of the Illinois statute – and the Connecticut statutes – but certainty is generally a good principle in the law, and we are moving towards greater certainty about state authority in this area.
On June 30, 2017, the Massachusetts Department of Energy Resources (“DOER”) announced an “aspirational” target for Massachusetts’ utilities to procure 200 MWh of energy storage by January 1, 2020. While solar targets are typically expressed in MW, the capabilities of energy storage facilities are often measured both in terms of power (MW) and energy (MWh), reflecting the multiple applications for which energy storage can be used. … More
On June 5, 2017, the Massachusetts Department of Energy Resources (“DOER”) filed much anticipated emergency regulations (225 CMR 20.00) to govern, at least the DOER’s part of its proposed Solar Massachusetts Renewable Target (“SMART”) program. The regulations build on a proposal released January 31, 2017 (discussed previously, here) and represent the Baker administration’s first formal step in following through on the legislature’s 2016 mandate to DOER in An Act Relative to Solar Energy commanding that it develop a new statewide solar incentive program.… More
For the purposes of qualifying for net metering credits, section 138 of M.G.L. c. 164 defines a “Solar Net Metering Facility” as “a facility for the production of electrical energy that uses sunlight to generate electricity and is interconnected to a Distribution Company.” The statute and accompanying regulations are silent regarding the co-location of energy storage equipment with such a qualifying Solar Net Metering Facility.
National Grid has interpreted this silence to be a total prohibition on solar + storage for net metering facilities.… More
Presented by Foley Hoag LLP and NECEC
After decades of speculation about offshore wind’s future in the United States, the industry that has long powered grids in Europe has finally arrived in the Northeast. In the last year America’s first offshore wind project–off the coast of Rhode Island–started spinning and delivering power to the grid, Massachusetts Governor Charlie Baker signed into law a bill authorizing the procurement of 1,600 megawatts of offshore wind,… More
According to Bloomberg BNA (subscription required), last week, for the first time ever, more than 50% of the load in the Electric Reliability Council of Texas service area was supplied by wind power. This is the state that consumes more coal than any other. Installed wind capacity is now more than 18,000 megawatts and is projected to be as high as 28,000 MW by 2020.… More
Earlier this week, the Massachusetts Department of Energy Resources (DOER) finalized the details of the Solar Carve-out II extension, which seeks to facilitate the transition between that program and DOER’s proposed Solar Massachusetts Renewable Target (SMART) program. The extension program helps bridge the gap between the Solar Carve-out II incentive program, which went into effect in April 2014 and was designed to support the market until 1,600 MW of PV capacity had been installed,… More