Proponents of the Clean Peak Standard (“CPS”) in Massachusetts may see its entry into the New England markets sooner rather than later, either through the adoption of legislation prior to the Legislature’s July 31 recess date, or by the promulgation of regulations under the Department of Energy Resources’ (DOER) existing authority. In an energy storage forum on May 30, DOER launched an informal pre-rulemaking process intended to facilitate the adoption of CPS regulations within the Commonwealth. According to its presentation, DOER indicated that it envisions implementing a CPS if the legislature enacts a CPS this session and expressly directs the DOER to promulgate CPS regulations; alternatively, if the legislature fails to adopt a CPS in the final month of the session, DOER indicated that it will consider amending the Alternative Portfolio Standard (APS) regulations, for which it currently has authority, and incorporate a CPS within the broader APS.
While approaches to developing a CPS can vary, the one gaining most traction is a CPS that builds upon a traditional Renewable Portfolio Standards (“RPS”) framework and then adds one or more supplemental attributes that would work in tandem with the RPS model that currently exists in more than half the states within the U.S. Specifically, “RPS 2.0,” as it is called by some, uses the now familiar RPS construct, both a percentage of kilowatt hours (“kwh”) and Renewable Energy Certificates, and adds a new component that requires utilities to purchase a certain percent of energy delivered to customers during peak load hours that is derived from clean energy resources. A REC-like product specifically tailored to clean peak resources, or a hybrid or flexible REC, would then facilitate compliance and enhance the market for these renewable energy resources.
Meanwhile, Beacon Hill has been sending mixed messages on the CPS. Governor Baker announced his support for a CPS in H.4318, released in March, 2018. The Senate, on the other hand, recently rejected an amendment to S.2545 that would have established a CPS. The House members of the Joint Committee on Telecommunications, Utilities and Energy, however, have developed legislation calling for a CPS that expressly requires retail electricity suppliers to provide a minimum percentage of kwh sales to end-use customers from clean resources during peak hours. Simply creating the CPS requirement is not enough for some CPS proponents, though, who also want the legislature to include long-term contracting for clean peak resources.
Whether the regulatory process results from an express legislative directive or under DOER’s existing authority, it is likely that the adoption of regulations by DOER will take at least a year and will include the opportunity for extensive stakeholder input. Just how expansive DOER’s CPS program is, however, may turn on the source of that authority. Undoubtedly, as the administration proceeds with the development of a CPS, one of the most important issues to stakeholders will be determining which resources will qualify as clean peak.