HOUSE DOCKET, NO. 4048        FILED ON: 9/20/2011

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 3767

The Commonwealth of Massachusetts

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In the Year Two Thousand Eleven

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An Act relative to competitively solicited and cost effective long-term renewable energy contracts.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Paragraph 1 of section 83 of chapter 169 of the acts of 2008 is hereby amended by striking out the first sentence and inserting in the place thereof, the following sentence:-

Commencing on July 1, 2009, and continuing for a period of 5 years thereafter, each distribution company, as defined in section 1 of chapter 164 of the General Laws, shall be required twice in that 5 year period to competitively solicit proposals from renewable energy developers and, provided at least three reasonable proposals have been received, enter into cost-effective long-term contracts.

SECTION 2. Paragraph 2 of section 83 of said chapter is hereby amended by striking out the third sentence and inserting in the place thereof, the following sentence:-

The electric distribution company shall select a reasonable method of soliciting proposals from renewable energy developers.

SECTION 3. Paragraph 2 of section 83 of said chapter is hereby amended by striking out the fourth sentence and inserting in the place thereof, the following sentence:-

The distribution company may consult with the department of energy resources regarding its choice of contracting methods.

SECTION 4. Section 83 of chapter 169 of said chapter is hereby amended by striking out the third paragraph and inserting in the place thereof, the following paragraph:-

The department of public utilities and the department of energy resources shall each adopt regulations consistent with this section.  The regulations shall: (a) allow renewable energy developers to submit proposals for long-term contracts conforming to the contracting methods specified in the second paragraph; (b) require that contracts executed by the distribution company under such proposals are filed with, and approved by, the department of public utilities before they become effective; (c) provide for an annual remuneration for the contracting distribution company up to 4 per cent of the annual payments under the contract to compensate the company for accepting the financial obligation of the long-term contract, such provision to be  determined by the department of public utilities at the time of contract approval; and (d) require that the renewable energy generating source to be used by a developer under the proposal meet the following criteria: (1) have a commercial operation date, as verified by the department of energy resources, on or after January 1, 2008; (2) be qualified by the department of energy resources as eligible to participate in the RPS program, under said section 11F of chapter 25A, and to sell RECs under the program; and (3) be determined by the department of public utilities to: (i) provide enhanced electricity reliability within the commonwealth; (ii) contribute to moderating system peak load requirements; and (iii) be cost effective to Massachusetts electric ratepayers over the term of the contract.  As part of its approval process, the department of public utilities shall consider the attorney general’s recommendations, which shall be submitted to the department of public utilities within 45 days following the filing of such contracts with the department of public utilities.  The department of public utilities shall take into consideration both the potential costs and benefits of such contracts, and shall approve a contract only upon a finding that it is a cost effective mechanism for procuring renewable energy on a long-term basis. For the purposes of this section, cost effective shall mean proposals that are likely to result in net ratepayer savings as compared to current and projected future market prices of energy and RECs over the course of the contract period.  If, after competitive solicitation, no proposal received by a distribution company is determined to provide such savings, cost effective shall mean proposals that are the least costly in terms of electric service rates.

SECTION 5. Paragraph 4 of section 83 of said chapter is hereby amended by striking out, in the first sentence, the following words:- be obligated to

SECTION 6. Paragraph 5 of section 83 of said chapter is hereby amended by inserting in the first sentence, after the word “customers,” the following words:- at the contracted price

SECTION 7: Paragraph 9 of section 83 of said chapter is hereby repealed.

SECTION 8. Sections 1 through 7, inclusive, of this act shall take effect on September 1, 2011.