SECTION 1. Chapter 21N of the General Laws, is hereby amended by inserting after section 3B the following section:-

Section 3C (a) As used in this section, the following words shall, unless the context clearly requires otherwise, have the following meanings:

“distributed energy resource” shall be defined in accordance with Chapter 164 Section 1.

(b)The secretary shall establish goals for the deployment of distributed energy resources in the commonwealth, such that distributed energy resources capacity is equal to or greater than 20 per cent of the commonwealth's total electric load by December 31, 2035.

(c) The goals to reach this milestone should include but not be limited to: solar photovoltaic systems, energy storage systems, and other clean energy technologies that can be interconnected to the electric distribution system.

(d) The secretary shall, at a minimum, consult with the department of public utilities and the department of energy resources in order to: (1) develop a comprehensive plan to achieve the distributed energy resources goal; (2) establish interim targets for distributed energy resource deployment; (3) identify barriers to achieving the goal and recommend policy solutions; (4) track and report annually on progress toward meeting the goal; and (5) ensure the equitable distribution of distributed energy resources across all communities in the commonwealth.

(e) Nothing in this section shall preclude the secretary from establishing more ambitious goals for distributed energy resource deployment or achieving the goals ahead of the specified timeline.

SECTION 2. Chapter 164 of the General Laws is hereby amended by inserting after section 148 the following section:-

Section 149: (a) As used in this section, the following words shall, unless the context clearly requires otherwise, have the following meanings:

"virtual power plant", an aggregation of distributed energy resources operated in coordination to provide one or more grid services.

(b) Each electric company shall establish a virtual power plant program to enable coordinated operation of customer-sited distributed energy resources for peak load reduction and other grid services.

(c) Each electric company shall: (1) file with the department of public utilities a virtual power plant program proposal within 180 days of the effective date of this section;

(2) Implement the program through a standard offer, open access tariff that includes, at a minimum: (i) provisions for both third-party aggregators and direct customer participation; (ii) compensation mechanisms including upfront and performance-based payments; (iii) enhanced incentives for low-to-moderate income persons, as defined in section 38d of chapter 121b, or resides in an environmental justice population, as defined in section 62 of chapter 30, which shall include but not be limited to higher payment or compensation, upfront financial assistance, income-based utility discounts, reduced or no-cost enrollment, targeted outreach and education, and pathways for ownership and local control of virtual power plant resources; (iv) measurement and verification requirements; and (v) consumer protection provisions.

(d) The Department shall: (1) review and approve or modify program proposals within 120 days of filing; (2) establish annual procurement targets for peak load reduction and other grid services; (3) determine whether performance incentives for electric distribution companies based on achievement of program targets are appropriate; and (4) ensure programs maximize ratepayer benefits including peak load reduction, renewable energy integration, and avoided infrastructure costs.

(e) Electric companies shall not own resources that participate in a virtual power plant program or act as aggregators under the program. The department shall promulgate regulations to implement this section.

(f) Municipal light plants may apply to opt in using the process in subsection (c) by submitting an informational filing with the Department of Energy Resources and the Department of Public Utilities accordingly.

SECTION 3. Section 1E of said chapter 164 of the General Laws, as appearing in the 2022 Official Edition, is hereby amended by inserting after subsection (c) the following subsection:-

(d) The department shall consider the implementation of financial performance-based incentives and penalties and performance-based metrics to facilitate the interconnection of distributed energy resources. If the department approves such performance-based incentives and penalties for a particular company, the department shall include in such approval a framework for periodic monitoring and review of the company's performance pursuant to metrics developed by the department.