SECTION 1. Chapter 25A of the General Laws is hereby amended by adding the following section:-Section 19. (a) The department shall establish an energy storage system target for the deployment of energy storage systems by distribution company customers, distribution companies and municipal lighting plants to achieve a statewide energy storage deployment target of 2,000 megawatts by January 1, 2030 and a subsequent statewide energy storage deployment target to be achieved by January 1, 2035.

The department shall set annual statewide deployment targets to be achieved in each distribution company’s and municipal lighting plant’s service territory in order to reach the energy storage system targets required under this section.

(b) To achieve the annual targets established in subsection (a), the department may consider a variety of deployment mechanisms and may require policies to encourage the cost-effective deployment of energy storage systems including, but not limited to: (i) distribution company or municipal lighting plant programs to encourage private deployment of energy storage systems by their customers; (ii) procurement of cost-effective energy storage systems to be owned and operated by a distribution company; provided, however, that any such procurement shall finance the deployment of energy storage systems for the purpose of: (1) a nonwires alternative to investment in distribution; (2) deferring investment in distribution infrastructure that would otherwise be needed to address actual or forecasted overloads on distribution circuits or at substations; or (3) improving the capability of the distribution system to recover from adverse events that otherwise could result in long-term outages in critical areas of the distribution system; (iii) the use of alternative compliance payments collected pursuant to subsection (e) to fund a grant program for private development; and (iv) the use of energy storage to replace fossil generation and the use of energy efficiency funds under section 19 of chapter 25 if the department determines that customer-owned energy storage provides sustainable peak load reductions on either the electric or gas distribution systems and is otherwise consistent with section 11G of this chapter.

(c) A distribution company shall not own or operate energy storage systems equal to more than 20 per cent of the annual target established by the department for the distribution company’s service territory established in subsection (a) for the purpose of achieving the annual targets; provided, however, that the department shall ensure that no distribution company shall prevent or interfere with a customer or developer’s ability to enter into agreements to own or operate behind the meter energy storage systems.

(d) Each distribution company and municipal lighting plant shall annually make a map available that identifies areas of critical need for energy storage systems within their service territory. Each distribution company and municipal light plant shall identify on the map areas of actual or forecasted overloads on distribution circuits or at substations. The map shall aggregate system detail as necessary for distribution system security.

(e) The department shall promulgate regulations to: (i) establish a carve-out of the alternative energy portfolio standard obligation under section 11F1/2 for energy storage systems as defined in section 1 of chapter 164; and (ii) allow each distribution company and municipal lighting plant to discharge its obligations under this section by either procuring attributes from energy storage systems that qualify under the carve-out established pursuant to this section or by making an alternative compliance payment in an amount to be established by the department.  The regulations shall require distribution companies and municipal lighting plants to annually submit to the department a report that shows it is in compliance with this section.

(f) Annually, not later than December 1, the department shall make available on its website a report on the energy storage system target program.

(g) The department shall promulgate regulations to implement this section.