SECTION 1. Chapter 25A of the general laws, as appearing in the 2016 Official Edition, is hereby amended by adding the following section:-

Section 17. (a) The department shall establish an incentive program to support non-solar renewable energy resources that are less than five megawatts and that qualify for the class I renewable energy portfolio standard under section 11F. The program shall be designed to finance the development, construction, and operation of renewable-energy distributed-generation projects through a fixed price performance-based incentive that is designed to achieve annual megawatt targets at reasonable cost through competitive processes established by the department.

(b) The incentive program shall be tariff-based and the department shall promulgate regulations that, at a minimum: (i) establish the eligibility criteria for facilities to qualify under the program; (ii) establish the methodology for establishing incentives; and (iii) direct the distribution companies to jointly file a model tariff to implement the program with department of public utilities, for its review and approval.

(c) The methodology for establishing incentive levels shall: (i) take into consideration underlying system installation, soft, and fuel costs; (ii) take into account electricity revenues and any federal or state incentives; (iii) rely on market-based mechanisms or price signals as much as possible; (iv) differentiate incentives levels by size, location, and project type;  (v) establish annual targets for each technology type; (vi) ensure that the costs of the program are shared collectively among all ratepayers of the distribution companies; and (vii) promote investor confidence through long-term incentive revenue certainty and market stability.

(d) Anaerobic digestion facilities that are both operational and qualified as Class I renewable energy generating sources under section 11F prior to the effective date of this section shall be eligible to participate in the incentive program via a one-time procurement for the class I renewable generation attributes created by existing anaerobic digestion facilities. The department shall determine eligibility criteria for existing anaerobic digestion facilities to participate in the one-time procurement, with the total megawatts being procured equal to the combined capacity of all eligible facilities. The one-time procurement shall include a ceiling price equal to or greater than the alternative compliance payment rate, and not to exceed double the alternative compliance payment rate, as established by the department under section 11F.

(e) Attributes, as defined by the department, of the Class I renewable energy generating sources that qualify under regulations established pursuant to this section shall be eligible for use by retail electric suppliers pursuant to their obligations under section 11F.