The Federal Energy Regulatory Commission (FERC) issued a Final Rule (the Final Rule) on February 15, 2018 (Docket Nos. RM16-23-000; AD16-20-000; Order No. 841) pursuant to which FERC amended its regulations under the Federal Power Act to remove barriers to the participation of electric storage resources in the capacity, energy, and ancillary service markets operated by Regional Transmission Organizations (RTO) and Independent System Operators (ISO) (RTO/ISO markets).… More
Category Archives: Regulation
Yesterday, FERC terminated the docket it opened in response to DOE Secretary Perry’s September proposal to compensate generators who maintain a 90-day fuel supply on-site. The intent of the proposal was to compensate generators who provide reliability and resilience attributes to the grid.
The decision was unanimous, though there were several concurrences. The commissioners were not persuaded that there is a reliability problem that requires immediate,… More
On September 28, 2017, Secretary of Energy Rick Perry sent a letter to FERC enclosing a Notice of Proposed Rulemaking (NOPR), which Secretary Perry asserts “requires the Commission-approved organized markets to develop and implement market rules that accurately price generation resources necessary to maintain the reliability and resiliency of our Nation’s electric grid.” Both the timing and substance of the proposal have been criticized by energy industry representatives,… More
We’ll Always Have RGGI: Paris or no Paris, New England and Mid-Atlantic States Continue to Lead on Greenhouse Gas Emission Reductions
Recently, Massachusetts and the eight other New England and Mid-Atlantic states that participate in the Regional Greenhouse Gas Initiative announced a proposed plan for the continued implementation of RGGI (the region’s cap-and-trade program) between the years 2020 and 2030. The plan calls for an additional reduction of GHGs by 30% by 2030, beyond the RGGI 2020 levels. Emissions would be capped at about 75 million tons in 2021,… 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,… More
MA Appellate Tax Board Again Finds Virtually Net Metered Solar Facility Exempted from Property Taxation
The Commonwealth of Massachusetts’ Appellate Tax Board (the “Board”) has again ruled that a ‘virtual’ net-metered solar PV project is exempted from property taxation under clause “forty-fifth” of Massachusetts General Laws, Chapter 59, Section 5. This time, the board promulgated its Findings of Fact and Report in KTT, LLC v. Board of Assessors of The Town of Swansea.
The Findings represent yet another major change in the application of the Commonwealth’s property tax exemption for off-site,… More
On September 23, DOER presented a straw proposal for the next phase of Massachusetts solar incentives. DOER’s ambitious proposal for a tariff-based program reflects a thoughtful development process and a laudable goal of crafting a program that is more efficient at promoting sustained solar deployment. There is plenty to like. But, DOER has bitten off quite a mouthful by proposing a structure that departs so dramatically from the SREC approach. … More
Last Friday, Governor Baker issued Executive Order 569, “Establishing an Integrated Climate Change Strategy for the Commonwealth.” EO 569 will advance climate policy in Massachusetts in a number of important ways. It also leaves much to be accomplished by MassDEP. Here are the highlights:
- EOEEA and MassDOT are instructed to work with other New England and Northeastern states to develop regional policies to reduce GHG emissions from the transportation sector.…
The Massachusetts Department of Energy Resources (“DOER”) and the Massachusetts Clean Energy Center (“MassCEC”) released their long-awaited report on energy storage, “State of Charge” (the “Storage Study”) on Friday. The Storage Study is a central component of the Commonwealth’s “Energy Storage Initiative” and is likely to serve as the basis for future policy initiatives. It recommends a suite of policies designed to promote the development of 600 MW of advanced energy storage (i.e.… More
DOE and DOI Release the New National Offshore Wind Strategy: Perhaps Prosperity Is Finally Just Around the Corner
Last Friday, DOE and DOI issued an update of their National Offshore Wind Strategy. It’s a moderately aggressive strategy, seeking to deploy at least 86 gigawatts of offshore wind by 2050. The report highlights both the significant opportunities and potential for growth and also some of the remaining potential roadblocks.
On the plus side:
- The combination of fossil retirements and demand growth provide significant incentive for offshore wind development.…
Massachusetts Legislature Enacts Significant Energy Bill in Support of Offshore Wind and Hydro Procurement, Storage and Transmission
Late last night, the Massachusetts legislature enacted House Bill 4568, an act to promote energy diversity (the “Act”). Overall, the Act marks a compromise between the House’s original procurement-only legislation and the Senate’s more comprehensive “omnibus” bill. It is expected Massachusetts Governor Charlie Baker will sign the legislation shortly. After that, regulations will be required to be implemented and other regulatory actions will need to be taken by Massachusetts’ Department of Public Utilities,… More
MA DPU Sets September 26, 2016 as Net Metering “Notification Date” Setting the Stage for Transition to a Market Net Metering Credit
The Massachusetts Department of Public Utilities (the “Department“) today issued its Order Announcing Notification Date in its proceeding under 16-64, setting September 26, 2016 at 2PM as the “Notification Date” related to the transition to market net metering credits for private net metering projects.
The Order, 16-64-D, is available here: 16-64-D Order Announcing Notification Date 7 29 16.
The Department determined in its order that “aligning the timing for transition to the new regime of net metering credits with DOER’s SREC II program is the best option to result in a smooth transition to a stable and equitable solar net metering market.” With this Order,… More
On April 8, 2016 the Massachusetts Department of Energy Resources (DOER) filed emergency changes to 225 CMR 14.00 with the Secretary of the Commonwealth in an effort to bridge the gap between the expiration of the current solar incentive program and the expected publication of a new solar incentive program. Subsequent to a public hearing and comment period, DOER made several responsive modifications, and finalized the regulations which the Secretary of the Commonwealth officially promulgated as of July 1,… More
Last Friday, the Senate Committee on Ways and Means released its version of the energy bill that passed the House earlier this month. Whereas the House bill would require distribution companies to procure 1,200 MW of offshore wind power by 2027 and 9,450,000 MWH of hydroelectric power by 2022, the Senate’s version would require 2,000 MW of offshore wind by 2030 and 12,450,000 MWH of “clean energy generation” by 2018.… More
Minnesota May Not Prohibit Power Sales That Would Increase Statewide CO2 Emissions. Why Not? Pick Your Reason.
If you needed any further proof that energy law is very complicated, Wednesday’s decision in North Dakota v. Heydinger should convince you. The judgment is simple – the 8th Circuit Court of Appeals struck down a Minnesota statute which provides in part that:
no person shall . . . (2) import or commit to import from outside the state power from a new large energy facility that would contribute to statewide power sector carbon dioxide emissions;… More
The Massachusetts Legislature’s Joint Committee on Telecommunication, Utilities and Energy and the Baker Administration’s Department of Energy Resources have each delivered comments to the Department of Public Utilities in its Docket 16-64 implementing the Commonwealth’s transition to a “market net metering credit” rate for private net metering projects.
Another Solar Emergency!? Will the Commonwealth’s Transition to a “Market Net Metering Credit” for Private Solar Projects be “Stable and Equitable” After All?
The Massachusetts Department of Public Utilities’ (“DPU”) recent emergency order (the “Order”) issued May 11 in its Docket 16-64 made some immediate changes to the Commonwealth’s net metering law enacted by the Act Relative to Solar Energy (the “Act), which, according to its own preamble, was itself was an “emergency law, necessary for the public convenience” adopted, in part,… More
Last week, the Federal Energy Regulatory Commission (FERC) initiated a proceeding regarding the applicability of wholesale electricity market rules to energy storage resources. At this point, FERC is only gathering information. The agency requested data from Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) on “whether barriers exist to the participation of electric storage resources in the capacity, energy, and ancillary service markets in the RTOs and ISOs potentially leading to unjust and unreasonable wholesale rates.” FERC simultaneously requested public comment on these issues.… More
This week, the San Francisco Board of Supervisors enacted an ordinance that will require that the developers of all new buildings of 10 floors or less that apply for building permits after January 1, 2017 install solar PV or solar thermal systems. I’m not an expert in the California Code of Regulations, so I’m not familiar with all of the potential exemptions, but the only one stated in the new ordinance is for buildings (residential or non-residential) with a “solar zone” of less than 150 contiguous square feet.… More
On April 11, Massachusetts Governor Charlie Baker signed into law compromise legislation modestly raising the cap on the state’s net metering program. Net metering allows customers to generate solar power to offset electricity costs and provide surplus power to the grid.
The program was previously limited to 4 percent of peak electricity demand for private projects and 5 percent for public projects. These limits were reached in National Grid’s service territory last March,… More
On Tuesday, after months of waiting, the Massachusetts Department of Public Utilities (DPU) took action on the Grid Modernization Plans filed last summer by the three Massachusetts Electric Distribution Companies (EDCs), Eversource Energy, National Grid, and Unitil, calling for all interested parties to intervene in the proceedings by March 30, 2016.
The EDCs’ Grid Modernization Plans propose concrete steps to modernize the electric grid,… More
Reflecting the nation’s growing interest in community solar, on May 15, 2015, Maryland passed a law directing the state’s Public Services Commission (PSC) to establish a three-year pilot program for community solar projects, which provide the means for electricity customers to benefit from off-site or group-owned solar panels through “virtual” net metering.
The Maryland law imposes a two-MW limit on the capacity of individual community solar systems and requires that they be located in the same electric service territory as its subscribers,… More
The Supreme Court handed down a decision on Monday in Federal Energy Regulatory Commission v. Electric Power Supply Association affirming FERC’s Order No. 745. Order No. 745 generally requires market operators to pay the locational marginal price (LMP) for demand response (offers to voluntarily curtail electricity use)—the same price paid to generators for producing electricity. (Seth Jaffe previously posted on the decision.) The Supreme Court’s decision reverses a May 2014 decision from the D.C.… More
Earlier this week, Massachusetts released its updated Massachusetts Clean Energy and Climate Plan for 2020. The headline for the press release was “Massachusetts on Track to Meet 25% Greenhouse Gas Reduction Target for 2020”. The slightly more nuanced version is that we can do it, but only with a large dose of Canadian hydropower.
While that’s the main take-away, it really is a useful report,… More
With the Supreme Court in recess until January 11, it seems that the year will close without a ruling on whether the Federal Energy Regulatory Commission (FERC) overstepped its authority in issuing Order 745, which directs ISOs and RTOs to incentivize demand reduction by compensating cost-effective demand response resources at the market price for energy.
The Supreme Court agreed to hear the case after the U.S.… More
Solar and wind tax credits aren’t going to ride off into the sunset just yet.
On December 18, 2015, Congress extended the Investment Tax Credit (ITC) and Production Tax Credit (PTC) for five years.
The Section 48 ITC for commercial installations had been set to decrease from 30% to 10% at the end of 2016 and the Section 25D individual tax credit would have disappeared altogether.… More
San Diego Gas & Electric Company Proposes Paying Customers to Install Customer-Owned Energy Storage Resources
One key challenge to tapping the full potential of energy storage systems to improve the function of the electric grid is the absence of obvious paths for the owner of storage resources to realize the revenue opportunities associated with all of the various services that such a resource could provide. Energy storage resources can frequently provide multiple services – often crossing lines between categories of traditional resources that are compensated under different regulatory schemes. … More
One week after the Massachusetts legislature departed for its summer recess, Governor Charlie Baker today released net metering legislation to rival the Massachusetts Senate’s recent bill.
Where the Senate bill would have simply raised the net metering cap to 1600 MWs and largely retained the current net metering credit calculations, the Governor’s bill would increase the metering cap but would substantially reduce the calculation of net metering credits.… More
Readers expecting the Massachusetts electric distribution companies to file their Grid Modernization Plans yesterday will have to wait another two weeks. On Tuesday, the Massachusetts Department of Public Utilities granted a last minute extension, making the GMP filings due on August 19th. In their request for the extension, the electric distribution companies noted that the “requirement to develop comprehensive, forward-looking GMPs was the first of its kind” and that the GMPs “encompass sophisticated and complex technological investment portfolios,… More
California has been a national leader in promoting policies to support the deployment of energy storage resources. The California Public Utility Commission’s directive that California utilities procure 1,325 MW of energy storage through biennial procurements has spurred significant excitement and economic activity as have capacity procurements that required a portion of need to be met with energy storage. (The California Roadmap, … More
The Baker Administration announced on July 9 that it filed a bill for sourcing long-term hydroelectric power in the Commonwealth. Hydroelectric power currently provides a small portion of electricity consumed in Massachusetts. According to the Energy Information Administration, it ranks behind natural-gas, nuclear, coal and other renewable energy sources.
The bill, titled “An Act Relative to energy sector compliance with the Global Warming Solutions Act,” would require the State’s electric distribution companies to solicit proposals for hydroelectric contracts spanning 15 to 25 years. … More
As the date for the Paris climate talks moves closer, we have our second installment of our climate negotiations tracker. This episode discusses the concept of “dynamism” – being able to adjust over time just how ambitious the mitigation goals will be; the mechanism for assessing the Nationally Determined Contributions, or NDCs; the role of non-state actors; and how to differentiate among developed and developing countries.
There’s still a lot to do if Paris is going to be a success.
The latest volley in the ongoing debate over the economic value of solar policies comes from Maine, where the state’s Public Utilities Commission (PUC) released an independent study finding that the net value of distributed solar is $0.337 per kWh when levelized over the course of twenty-five years. That is significantly more than the state currently offers as offset credit to customers engaged in photovoltaic net metering.… More
Massachusetts Appellate Tax Board Finds MA Department of Revenue’s Denial of Property Tax Exemption for Virtually Net Metered Solar Facility “Incorrect,” Based on an “Illusory Distinction” and “Entitled to No Deference”
On December 4, 2014, the Commonwealth of Massachusetts’ Appellate Tax Board (the “Board”) promulgated its Findings of Fact and Report in Forrestall Enterprises, Inc. v. Board of Assessors of The Town of Westborough.
The Findings represent a major change in the application of the Commonwealth’s property tax exemption for off-site, net-metered and virtual-net-metered wind and solar systems. For some time now, the Massachusetts Department of Revenue (“DOR”) has taken the position that certain net metered solar and wind systems,… More
Will Time Varying Rates Shift Demand and Reduce Costs in Massachusetts? We Will Find Out (Eventually)
In June, I wrote about the Massachusetts Department of Public Utilities’ proposal to shift “Basic Service”—the default electricity service provided by electric distribution companies and used by most residential customers—from a flat rate structure to a time varying rate. On November 5th, the DPU adopted that proposal without modification.
That means that, in the future, the default service for retail customers in Massachusetts will have a time-of-use pricing structure. … More
The Massachusetts DPU Sets Requirements for Utility Grid Modernization Plans, Starting a Nine Month Period for Utilities to Identify Investments
Massachusetts has taken the next step towards requiring substantial investments to increase the capabilities of its electrical system and create opportunities for new technologies and innovations. On November 5th, the Massachusetts Department of Public Utilities issued an Order, D.P.U. 12-76-C, along with itemized filing requirements and a summary template, laying out what Massachusetts utilities must file in their “Grid Modernization Plans” (“GMPs”)—the ten-year proposals for investments promoting “grid modernization objectives” (such as reducing the effects of outages,… More
The Massachusetts DPU Issues Regulations to Increase Net Metering Caps, but What Does the Future Hold?
On November 4th, the Massachusetts Department of Public Utilities issued emergency regulations to implement the increase in net metering caps that was included in the thermal energy bill that passed at the end of the legislative session (An Act Relative to Credit for Thermal Energy Generated with Renewable Fuels, Chapter 251 of the Acts of 2014). The action here was in the legislation, which we wrote about in August. … More
What do teeth-whitening and solar PV installation have in common? Both can be subject to the murky authority of state professional boards made up of members with potential conflicts of interest. A case argued before the Supreme Court on October 14th, North Carolina State Board of Dental Examiners v. Federal Trade Commission, colorfully presents the potential conflicts that arise when professionals on such boards attempt to regulate at the margins of their profession. … More
Massachusetts may soon add hydroelectric facilities to the growing list of net metering eligible distributed generation in Massachusetts.
The Massachusetts Department of Public Utilities has issued a notice and order opening a proceeding (DPU 14-118) under which DPU will take the first steps towards developing legislation to enable net metering of small hydro.
Enabling small hydro to participate in net metering has the potential to provide benefits not only to owners of such current facilities but potentially also for the redevelopment of dams,… More
Getting Grid Modernization Policy Right: The New England Clean Energy Council Releases a White Paper
New, emerging, and expanding technologies offer opportunities to improve the reliability and performance of the electric grid, unlock efficiencies, and deliver valuable services to customers. Many state utility regulators (including those in Massachusetts, New York, and California) are investigating and implementing policies aimed at modernizing their electric grids to enable the provision of improved and expanded services. But to realize the full promise of new technologies,… More
Many in the clean energy community in Massachusetts are focused on the state legislature: the end of the legislative session is approaching and significant clean energy legislation (relating to clean energy procurement and net metering) is still in process. But the Department of Public Utilities (the DPU) has been busy, and two Orders issued earlier this month could dramatically change the way end consumers in Massachusetts use and pay for electricity – without any legislative changes.… More
You don’t have to read far in the Massachusetts Department of Public Utilities’ recent Order on Grid Modernization, D.P.U. 12-76-B , to get a sense of what a significant step the DPU believes it is taking:
With this Order, the Department launches a new energy future for Massachusetts. The modern electric system that we envision will be cleaner, more efficient and reliable, and will empower customers to manage and reduce their energy costs.… More
The Massachusetts DOER has released its revised regulations amending the State’s RPS to implement the next phase of support for solar in the Commonwealth. Redlined pages are available here.
From here the regulations will be reviewed at most for 30 days by the Massachusetts Legislature’s Joint Committee on Telecommunications, Utilities, and Energy which may provide comments to DOER. After review of any such comments by DOER,… More
Last year, Governor Patrick announced a goal of 1.6GW of solar electricity in Massachusetts by 2020; a goal that requires more than 1.2GW of new solar in the next six years. The Massachusetts Department of Energy Resources has now issued draft regulations for its SREC II program. The regulations are too complicated to summarize in a blog post,… More
According to ClimateWire on Tuesday, a Minnesota state administrative law Judge’s recommendation to the state Public Utility Commission may be the first time that a solar project has been declared cost-competitive against natural gas in an open bidding situation. That might be a little bit hyperbolic, given that Xcel Energy,… More
On December 23rd, the Massachusetts Department of Public Utilities (DPU) issued a straw proposal in docket 12-76 outlining a regulatory mechanism intended to advance modernization of the electric grid in Massachusetts. The DPU’s proposal follows a year of public process that resulted in a stakeholder “working group” that submitted a report to the DPU in July. Comments on this important proposal are due by January 17th and hearings are scheduled for February.… More
One Step At A Time Is Just Too Late: The DC Circuit Strikes Down EPA’s Deferral of GHG Regulation of Biomass Emissions
On Friday, in Center For Biological Diversity v. EPA, the D.C. Circuit Court of Appeals struck down EPA’s rule deferring regulation of GHG emissions from “biogenic” sources. EPA had promulgated the rule, delaying regulation of emissions from biogenic sources from July 20, 2011, to July 21, 2014, on the ground that the carbon cycle is sufficiently complex that EPA is not yet in a position to judge what the actual carbon impact of different biogenic sources might be. … More
It seems hard to believe now, but only a few years ago it looked like we might get federal cap-and-trade legislation to address greenhouse gas emissions. Almost exactly four years ago the House of Representatives passed the American Clean Energy and Security Act, which would have done just that. Within about a year, cap-and-trade legislation died in the Senate. Comprehensive climate change legislation has not seriously been on the agenda since. … More
President Obama yesterday released his Climate Action Plan, together with a Memorandum concerning EPA’s issuance of rules governing carbon emissions from new and existing power plants under the Clean Air Act. At a certain level, there is not much new here. The mere existence of the Plan and the commitment to address climate issues is presumably the point.
The Plan does not provide many specifics. … More
Technically, We Could Green The Grid and Keep The Lights On; Do We Have The Policies to Get Us There?
One concern with adding large amounts of renewable generation to the electric grid is that the variability of renewable resources such as solar and wind might render the electric grid unreliable. According to a recent report from Synapse Energy Economics, that concern is misplaced and we already have the technological capacity to replace 100% of U.S. coal generation and 25% of U.S. nuclear generation with renewables by 2050 while maintaining grid reliability.… More
CZM Proposes Regulations to Implement Ocean Management Plan and Update Federal Consistency Review Program
The Massachusetts Office of Coastal Zone Management (CZM) recently released for public review and comment draft regulations designed to update federal consistency review requirements and implement the state’s Ocean Management Plan.
Governor Patrick signed the Oceans Act on May 28, 2008, requiring the Secretary of EOEEA to develop a comprehensive ocean management plan. The Massachusetts Ocean Management Plan was released on December 31, 2009. … More