Amendment 1

SENATE . . . . . . . . . . . . . . No. 2372

The Commonwealth of Massachusetts

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In the One Hundred and Eighty-Ninth General Court
(2015-2016)

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SENATE, June 24, 2016

The committee on Ways and Means, to whom was referred the House Bill to promote energy diversity (House, No. 4385); reports, recommending that the same ought to pass with an amendment striking out all after the enacting clause and inserting in place thereof the text of Senate document numbered 2372.

For the committee,
Karen E. Spilka

SENATE . . . . . . . . . . . . . . No. 2372

The Commonwealth of Massachusetts

_______________

In the One Hundred and Eighty-Ninth General Court
(2015-2016)

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SECTION 1. Section 97A of chapter 13 of the General Laws, as appearing in the 2014 Official Edition, is hereby amended by striking out, in line 5, the words “documents to be provided” and inserting in place thereof the following words:- that documents be made available.

SECTION 2. Said section 97A of said chapter 13, as so appearing, is hereby further amended by striking out, in lines 7 to 9, inclusive, the words “at the time of closing, outlining the procedures and benefits of a home energy audit; provided however” and inserting in place thereof the following words:- at the time of listing; provided, however, that if there is no public listing, the documents shall be made available prior to the time of the signing of the purchase and sale agreement and shall disclose the results of a home energy audit and the residential dwelling’s energy rating and label, as established by the department of energy resources in section 11G½ of chapter 25; provided further.

SECTION 3. Said section 97A of said chapter 13, as so appearing, is hereby further amended by adding the following 3 paragraphs:-

Notwithstanding the previous paragraph, a sale or transfer of a dwelling in the following circumstances shall not require the disclosure of the results of a home energy audit and energy assessment and may include documents disclosing the procedures and benefits of a home energy audit: (i) a foreclosure or pre-foreclosure sale; (ii) a deeded or trustee sale; (iii) a transfer of title related to the exercise of eminent domain; (iv) a sale between family members; (v) a sale under court order; (vi) a sale under a decree of legal separation or divorce; or (vii) a sale or transfer that involves a dwelling that is designated on the National Register of Historic Places or the state register of historic places as a historic building or landmark.

The regulations under this section may include exemptions of the requirements for a home energy audit for dwellings that were constructed within 3 years of the listing or sale and that comply with the most recent energy provisions of the state building code that are applicable to residential buildings.

The department of energy resources, in consultation with the energy efficiency advisory council, shall track and publicly report, not less than quarterly, the number of home energy audits conducted and energy ratings and labels issued.

SECTION 4. Section 11F of chapter 25A of the General Laws, as so appearing, is hereby amended by striking out, in lines 16 and 17, the words “and (3) an additional 1 per cent of sales” and inserting in place thereof the following words:- (3) an additional 1 per cent of sales every year until December 31, 2016; and (4) an additional 2 per cent of sales.

SECTION 5. Section 11F½ of said chapter 25A, as so appearing, is hereby amended by inserting after the word “biofuel”, in line 16, the following words:- , waste-to-energy that is a component of conventional municipal solid waste plant technology in commercial use regardless of the commercial operation date of the waste-to energy facility.

SECTION 6. Said section 11F½ of said chapter 25A, as so appearing, is hereby further amended by striking out, in line 24, the words “or (v)” and inserting in place thereof the following words:- (v) fuel cells; or (vi).

SECTION 7. Said section 11F½ of said chapter 25A, as so appearing, is hereby further amended by inserting after the word “energy”, in line 30, the following words:- or fuel cell technology.

SECTION 8. Said section 11F½ of said chapter 25A, as so appearing, is hereby further amended by inserting after the word “for”, in line 70, the following words:- fuel cells and.

SECTION 9. Said section 11F½ of said chapter 25A, as so appearing, is hereby further amended by striking out, in lines 73 and 74, the words “renewable thermal”.

SECTION 10. Said chapter 25A is hereby amended by inserting after section 11G the following section:-

Section 11G½. (a) The department shall establish an energy rating and labeling system that stores and provides information regarding energy performance of single family residential dwellings, multi-family residential dwellings with less than 5 units and condominium units. The energy rating and labeling system shall provide a consistent scoring method regarding the energy performance of a residential dwelling that is based upon the physical assets of the unit. The energy rating and labeling system shall include, but not be limited to, information regarding annual: (i) energy consumption by fuel; (ii) energy costs for electricity and thermal needs; and (iii) carbon or greenhouse gas emissions.

(b) The department may promulgate regulations that are necessary to implement this section.

SECTION 11. Section 1 of chapter 164 of the General Laws, as appearing in the 2014 Official Edition, is hereby amended by inserting after the definition of “Energy management services” the following definition:- “Energy storage system”, a commercially available technology that is capable of absorbing energy, storing it for a period of time and thereafter dispatching the energy and which may be owned by an electric distribution company; provided, however, that an “energy storage system” shall: (i) reduce the emission of greenhouse gases; (ii) reduce demand for peak electrical generation; (iii) defer or substitute for an investment in generation, transmission or distribution assets; or (iv) improve the reliable operation of the electrical transmission or distribution grid; and provided further, that an energy storage system shall: (1) use mechanical, chemical or thermal processes to store energy that was generated for use at a later time; (2) store thermal energy for direct heating or cooling use at a later time in a manner that avoids the need to use electricity at that later time; (3) use mechanical, chemical or thermal processes to store energy generated from renewable resources for use at a later time; or (4) use mechanical, chemical or thermal processes to capture or harness waste electricity and to store the waste electricity generated from mechanical processes for delivery at a later time.

SECTION 12. Chapter 169 of the acts of 2008 is hereby amended by inserting after section 83A, inserted by chapter 209 of the acts of 2012, the following 3 sections:-

Section 83B. For the purposes of this section and sections 83C and 83D, the following words shall have the following meanings unless the context clearly requires otherwise:

“Affiliated company”, an affiliated company as defined in section 85 of chapter 164 of the General Laws.

“Clean energy generation”, (i) hydroelectric generation; (ii) new Class I renewable portfolio standard eligible resources that are firmed up with hydroelectric generation; or (iii) new Class I renewable portfolio standard eligible resources.

“Distribution company”, a distribution company as defined in section 1 of chapter 164 of the General Laws.

“Long-term contract”, a contract for a period of 15 to 20 years for offshore wind energy generation under section 83C or for clean energy generation under section 83D.

“New Class I renewable portfolio standard eligible resources”, Class I renewable energy generating sources under section 11F of chapter 25A of the General Laws that have not commenced commercial operation prior to the date of execution of a long-term contract or that represent a net increase from incremental new generating capacity at an existing facility after the date of execution of a long-term contract.

“Offshore wind developer”, a provider of electricity developed from an offshore wind energy generation project.

“Offshore wind energy generation”, offshore electric generating resources derived from wind that: (i) are Class I renewable energy generating sources under section 11F of chapter 25A of the General Laws; and (ii) have a commercial operations date on or after January 1, 2018 that has been verified by the department of energy resources.

Section 83C. (a) Not later than October 1, 2017, every distribution company shall, with the department of energy resources, jointly and competitively solicit proposals for offshore wind energy generation. If the department of energy resources, in consultation with the independent evaluator under subsection (e), determines that any reasonable proposal has been received, the distribution companies shall enter into cost-effective long-term contracts, subject to the approval of the department of public utilities, to facilitate the financing of offshore wind energy generation resources and the reaching of the commonwealth’s emission reduction goals under chapter 298 of the acts of 2008 and chapter 21N of the General Laws, apportioned among the distribution companies under this section.

(b) The timetable and method of solicitation of long-term contracts shall be proposed jointly by the distribution companies and the department of energy resources. The distribution companies, in coordination with the department of energy resources, shall consult with the office of the attorney general regarding the choice of solicitation methods. The department of energy resources shall be a full participant in the execution and evaluation of all proposals. The timetable and method shall be reviewed and approved by the department of public utilities. A solicitation may be coordinated and issued jointly with other New England states or entities designated by those states. The distribution companies shall conduct at least 3 competitive solicitations through a staggered procurement schedule developed by the distribution companies and the department of energy resources; provided, however, that the distribution companies shall jointly enter into cost-effective long-term contracts for offshore wind energy generation equal to approximately 2,000 megawatts of aggregate nameplate capacity not later than June 30, 2030. The first solicitation shall seek proposals of approximately 400 megawatts of aggregate nameplate capacity.

The department of public utilities shall not approve a long-term contract that results from a subsequent solicitation and procurement period if the levelized cost of energy and the net present value of the contract price that results from that subsequent procurement is greater than or equal to the levelized cost of energy or net present value of the contract price that resulted from the previous procurement. For the purposes of this section, “levelized cost of energy” shall include transmission and renewable energy certificates.

If the department of energy resources determines that no reasonable proposal was received in response to a solicitation, the department may terminate the solicitation. If the department, in consultation with the independent evaluator, deems all proposals under a solicitation to be unreasonable, it shall issue public, written findings and the independent evaluator shall review the findings and issue an independent assemment of the decision by the department of energy resources to deem every proposal unreasonable. The department of energy resources may reconsider any proposal based upon a recommendation from the independent evaluator.

(c) In developing proposed long-term contracts, the distribution companies shall consider long-term contracts for renewable energy certificates for energy and for a combination of both renewable energy certificates and energy. Notwithstanding a determination from the department of energy resources that a proposal is reasonable, a distribution company may decline to pursue a proposal if the proposal’s terms and conditions would require the contract obligation to place an unreasonable burden on the distribution company’s balance sheet; provided, however, that the distribution company shall take all reasonable actions to structure the contracts, pricing or administration of the products purchased under this section in order to prevent or mitigate an impact on the balance sheet or income statement of the distribution company or its parent company, subject to the approval of the department of public utilities; provided further, that mitigation shall not increase costs to ratepayers. If a distribution company deems all proposals to be unreasonable, the department of public utilities shall initiate a docket to examine the distribution company’s decision for declining the proposals and may order the distribution company to reconsider any proposal. If distribution companies are unable to agree on a winning bid following a solicitation under this section, the matter shall be submitted to the department of energy resources which shall, in consultation with the independent evaluator, issue a final, binding determination of the winning bid. The department of energy resources may require additional solicitations to fulfill the requirements of this section.

(d)(1) The department of public utilities shall promulgate regulations consistent with this section. The regulations shall: (i) allow offshore wind developers of offshore wind energy generation to submit proposals that are consistent with this section for long-term contracts; (ii) require that a proposed long-term contract executed by the distribution companies under a proposal be filed with and approved by the department of public utilities before becoming effective; (iii) require transmission costs to be incorporated into a proposal; (iv) after the approval by the department of public utilities of a long-term contract, require an offshore wind developer to proceed with reasonable promptness and diligence to provide offshore wind energy resources; (v) allow offshore wind energy generation resources to be paired with energy storage systems; and (vi) require that offshore wind energy generating resources to be used by a developer under the proposal: (A) provide enhanced electricity reliability; (B) are cost effective to electric ratepayers over the term of the contract, taking into consideration costs and benefits, including economic and environmental benefits and existing or reasonably anticipated federal and state environmental requirements; (C) avoid line loss and mitigate transmission costs to the extent possible and ensure that transmission cost overruns, if any, are not borne by ratepayers; (D) moderate system peak load requirements; (E) adequately demonstrate project viability in a commercially reasonable timeframe; (F) mitigate environmental impacts; and (G) promote additional employment and economic development.

(2) The department of public utilities shall, subject to agreement with an offshore wind developer, require an offshore wind developer that has executed a final long-term contract approved by the department to provide data to the department. The data shall be provided to the department not more than once every 6 months. The offshore wind developer providing the data shall agree, as a condition of submitting a proposal under this section, that it will in good faith pursue a data agreement with the department. The agreement shall provide that the department shall not disclose data or other confidential or proprietary information provided by the offshore wind developer to the department under the data agreement and shall otherwise protect the data for an agreed upon period of time which shall not be more than 24 months after the date on which the data was collected. For the purposes of this paragraph, “data” shall mean primary data observations and metadata collected and stored by or on behalf of the offshore wind developer in relation to investigation modeling and monitoring of the development site or surrounding area related to meteorological, geotechnical, oceanographic or other environmental characteristics as determined by the department.

(e) The department of energy resources and the attorney general shall jointly select an independent evaluator to monitor, participate in and report on the solicitation and bid selection process in order to assist the department of energy resources in determining if a received proposal is reasonable and to assist the department of public utilities in its consideration of long-term contracts filed for approval. To ensure an open, fair and transparent solicitation and bid selection process that is not unduly influenced by an affiliated company, the independent evaluator shall: (i) be paid an equal amount and in full by each offshore wind developer submitting a proposal for the solicitation; (ii) issue a report to the department of public utilities, upon its review of the timetable and method of solicitation, that analyzes the proposed solicitation process and includes recommendations, if any, for improving the process; and (iii) upon the opening of an investigation by the department of public utilities into a proposed long-term contract for a winning bid proposal, file a report with the department of public utilities that summarizes and analyzes the solicitation and the bid selection process and provide its independent assessment of whether all bids were evaluated in a fair and objective manner. The independent evaluator shall also issue an assessment of whether a winning bid proposal complies with the regulations under subsection (d). The independent evaluator shall have access to the information and data related to the competitive solicitation and bid selection process that is necessary to fulfill the purposes of this subsection; provided, however, that the independent evaluator shall ensure that proprietary information shall remain confidential. The department of public utilities shall consider the findings of the independent evaluator and may adopt recommendations made by the independent evaluator as a condition for approval. If the independent evaluator concludes in the findings that the solicitation and bid selection of a long-term contract was not fair and objective and that the process was substantially prejudiced as a result, the department of public utilities shall reject the bid proposal.

(f) A proposed long-term contract shall be subject to the review and approval of the department of public utilities. 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 the proposed contract with the department of public utilities. The department of public utilities shall consider the potential costs and benefits of the proposed contract and shall approve a proposed contract if it finds that the proposed contract is a cost-effective mechanism for procuring reliable renewable energy on a long-term basis. The department of public utilities’ consideration of potential costs and benefits shall include consideration of non-price economic and environmental benefits, existing or reasonably anticipated federal and state environmental requirements, other factors outlined in this section and the commonwealth’s goals under chapter 298 of the acts of 2008 and chapter 21N of the General Laws.

(g) The distribution companies shall each enter into a contract with the winning bidders for their apportioned share of the market products being purchased from the project. The apportioned share shall be calculated and based upon the total energy demand from the distribution customers in each service territory of the distribution companies.

(h) A distribution company may elect to use energy purchased under a contract for resale to its customers and may elect to retain renewable energy certificates to meet the applicable annual renewable portfolio standard requirements under section 11F of chapter 25A. If the energy and renewable energy certificates are not so used, the company shall sell the purchased energy into the wholesale spot market and sell the purchased renewable energy certificates through a competitive bid process; provided, however, that the department of energy resources shall conduct periodic reviews to determine the impact on the energy and renewable energy certificate markets of the disposition of energy and renewable energy certificates under this section. The department of energy resources may issue a report recommending legislative changes if it determines that the disposition of energy and renewable energy certificates is adversely affecting the energy and renewable energy certificate markets.

(i) If a distribution company sells the purchased energy into the wholesale spot market and sells the renewable energy certificates through a competitive bid process, the distribution company shall net the cost of payments made to projects under the long-term contracts against the proceeds obtained from the sale of energy and renewable energy certificates, and the difference shall be credited or charged to distribution customers through reconciling distribution rates, subject to review and approval of the department of public utilities.

(j) A long-term contract procured under this section shall require an appropriate unit-specific tracking system to ensure an accounting of the delivery of clean energy generation resources. The unit-specific tracking system shall utilize reasonable estimates of life-cycle greenhouse gas emissions specific by units of clean energy generation resources, as determined by the department of energy resources in consultation with the department of environmental protection, to ensure accurate measurement of progress in achieving the commonwealth’s goals under chapter 298 of the acts of 2008 or chapter 21N of the General Laws.

(k) The department of energy resources and the department of public utilities may each require a bond or other security to ensure performance with the requirements under this section.

(l) The department of energy resources may promulgate regulations that are necessary to implement this section.

(m) If this section is subjected to a legal challenge, the department of public utilities may suspend the applicability of the challenged provision during the pendency of the action until a final resolution, including any appeals, is obtained and shall issue an order and take other action that is necessary to ensure that the provisions that are not the subject of the challenge are implemented expeditiously to achieve the public purposes of this section.

Section 83D. (a) Not later than April 1, 2017, every distribution company shall jointly and competitively solicit proposals for clean energy generation with the department of energy resources. If the department of energy resources, in consultation with the independent evaluator under subsection (e), determines that a reasonable proposal has been received, the distribution companies shall enter into cost effective long-term contracts, subject to the approval of the department of public utilities, to facilitate reaching the commonwealth’s emission reduction targets under chapter 298 of the acts of 2008 or chapter 21N of the General Laws, apportioned among the distribution companies under this section.

(b) The timetable and method for solicitation of long-term contracts shall be proposed jointly by the distribution companies and the department of energy resources. The distribution companies, in coordination with the department of energy resources, shall consult with the attorney general’s office regarding the choice of solicitation method. The department of energy resources shall be a full participant in the execution and evaluation of the proposals. The timetable and method for solicitation shall be reviewed and approved by the department of public utilities. A solicitation may be coordinated and issued jointly with other New England states or entities designated by those states. The distribution companies shall conduct 1 or more competitive solicitations through a schedule or staggered procurement schedule developed by the distribution companies and the department of energy resources; provided, however, that the distribution companies shall enter into cost-effective long-term contracts for clean energy generation of not more than 12,450,000 megawatt-hours by December 31, 2018.

If the department of energy resources determines that no reasonable proposal was received in response to a solicitation, the department may terminate the solicitation. If the department of energy resources, in consultation with the independent evaluator, deems all proposals under a solicitation to be unreasonable, it shall issue public, written findings and the independent evaluator shall review the findings and issue an independent assessment of the decision by the department of energy resources to deem the proposals unreasonable. The department of energy resources may reconsider any proposal based upon a recommendation from the independent evaluator.

(c) In developing proposed long-term contracts, the distribution companies shall consider long-term contracts for renewable energy certificates for energy and for a combination of both renewable energy certificates and energy, if applicable. A distribution company may decline to to pursue a proposal if the proposal’s terms and conditions would require the contract obligation to place an unreasonable burden on the distribution company’s balance sheet; provided, however, that the distribution company shall take all reasonable actions to structure the contracts, pricing or administration of the products purchased under this section in order to prevent or mitigate impacts on the balance sheet or income statement of the distribution company or its parent company, subject to the approval of the department of public utilities; provided further, that the mitigation shall not increase costs to ratepayers. If a distribution company deems all proposals to be unreasonable, the department of public utilities shall initiate a docket to examine the distribution company’s decision for declining the proposals and may order the distribution company to reconsider any proposal. If distribution companies are unable to agree on a winning bid under a solicitation under this section, the matter shall be submitted to the department of energy resources which shall, in consultation with the independent evaluator, issue a final, binding determination of the winning bid. The department of energy resources may require additional solicitations to fulfill the requirements of this section.

(d) The department of public utilities shall promulgate regulations consistent with this section. The regulations shall: (i) allow developers of clean energy generation resources to submit proposals that are consistent with this section for long-term contracts; (ii) require that contracts executed by the distribution companies under the proposals are filed with, and approved by, the department of public utilities before they become effective; (iii) require transmission costs to be incorporated into a proposal, whether the costs are a part of the bid price or related to the delivery of the assigned energy via a federally-regulated transmission tariff; provided, however, that the department of public utilities may authorize or require the relevant parties to seek recovery of the transmission costs of the project through federal transmission rates, consistent with policies and tariffs of the Federal Energy Regulatory Commission, to the extent the department of public utilities finds that recovery is in the public interest; (iv) allow long-term contracts for clean energy generation resources to be paired with energy storage systems; (v) after the approval by the department of public utilities of a long-term contract, require a developer to proceed with reasonable promptness and diligence to provide clean energy generation resources; and (vi) require that the clean energy resources to be used by a developer under the proposal: (A) provide enhanced electricity reliability; (B) include moderate system peak load requirements; (C) are cost effective to electric ratepayers over the term of the contract by providing reliability and economic and environmental benefits that outweigh costs; (D) avoid line loss and mitigate transmission costs to the extent possible and ensure that transmission cost overruns, if any, are not borne by ratepayers; (E) adequately demonstrate project viability in a commercially reasonable timeframe; (F) mitigate environmental impacts; and (G) promote additional employment and economic development. The department shall give preference to proposals that include both hydroelectric generation and new Class 1 eligible resources and give preference to proposals that include firm service.

(e) The department of energy resources and the attorney general shall jointly select an independent evaluator to monitor, participate in and report on the solicitation and bid selection process in order to assist the department of energy resources in determining if a received proposal is reasonable and to assist the department of public utilities in its consideration of resulting long-term contracts filed for approval. To ensure an open, fair and transparent solicitation and bid selection process that is not unduly influenced by an affiliated company, the independent evaluator shall: (i) be paid an equal amount and in full by each clean energy generation developer submitting a proposal for the solicitation; (ii) issue a report to the department of public utilities, upon its review of the timetable and method of solicitation, that analyzes the proposed solicitation process and includes recommendations for improving the process, if any; and (iii) upon the opening of an investigation by the department of public utilities into a proposed long-term contract for a long-term contract for a winning bid proposal, file a report with the department of public utilities that summarizes and analyzes the solicitation and the bid selection process and provide its independent assessment of whether every bid was evaluated in a fair and objective manner. The independent evaluator shall also issue its assessment of whether a winning bid proposal complies with the regulations under subsection (d). The independent evaluator shall have access to the information and data related to the competitive solicitation and bid selection process that is necessary to fulfill the purposes of this subsection; provided, however, the independent evaluator shall ensure that proprietary information remains confidential. The department of public utilities shall consider the findings of the independent evaluator and may adopt recommendations made by the independent evaluator as a condition for approval. If the independent evaluator concludes in the findings that the solicitation and bid selection of a long-term contract was not fair and objective and that the process was substantially prejudiced as a result, the department of public utilities shall reject the bid proposal.

(f) A proposed long-term contract shall be subject to the review and approval of the department of public utilities. 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 the proposed contract with the department of public utilities. The department of public utilities shall consider the potential costs and benefits of the proposed contract and shall approve a proposed contract if it finds that the proposed contract is a cost-effective mechanism for procuring low cost clean energy on a long-term basis. The department of public utilities’ consideration of potential costs and benefits shall include the factors outlined in this section and the commonwealth’s goals under chapter 298 of the acts of 2008 and chapter 21N of the General Laws.

(h) A distribution company may elect to use energy purchased under a contract for resale to its customers, and may elect to retain renewable energy certificates to meet the applicable annual renewable portfolio standard requirements under section 11F of chapter 25A. If the energy and renewable energy certificates are not so used, the company shall sell the purchased energy into the wholesale spot market and sell the purchased renewable energy certificates through a competitive bid process; provided, however, that a distribution company shall retain renewable energy certificates that are not attributed to Class I renewable portfolio standard eligible resources. The department of energy resources shall conduct periodic reviews to determine the impact on the energy and renewable energy certificate markets of the disposition of energy and renewable energy certificates under this section and may issue a report recommending legislative changes if it determines that the disposition of energy and renewable energy certificates is adversely affecting the energy and renewable energy certificate markets.

(j) A long-term contract procured under this section shall require an appropriate unit-specific tracking system to ensure an accounting of the delivery of clean energy generation resources. The unit-specific tracking system shall utilize reasonable estimates of life-cycle greenhouse gas emissions by specific units of clean energy generation resources, as determined by the department of energy resources in consultation with the department of environmental protection, to ensure accurate measurement of progress in achieving the commonwealth’s goals under chapter 298 of the acts of 2008 or chapter 21N of the General Laws.

(k) The department of energy resources and the department of public utilities may each require a bond or other security to ensure performance with requirements under this section.

(l) The department of energy resources may promulgate regulations that are necessary to implement this section.

(m) If this section is subject to a legal challenge, the department of public utilities may suspend the applicability of the challenged provision during the pendency of the action until a final resolution , includingany appeals, is obtained and shall issue an order and take other action that is necessary to ensure that the provisions that are not the subject of the challenge are implemented expeditiously to achieve the public purposes of this section.

SECTION 13. In designing the energy rating and labeling system under section 11G½ of chapter 25A of the General Laws, the department of energy resources shall consider the energy rating and labeling systems used as part of the Mass Save Home MPG program, the RESNET home energy rating system and the United States Department of Energy's home energy score in addition to other energy rating and labeling systems that are used in other jurisdictions that the department determines appropriate.

The department shall finalize the energy rating and labeling system for residential dwellings not later than December 15, 2016 and shall begin implementing the system not later than June 30, 2017. The department shall also provide recommendations for the implementation of an energy rating and labeling system for residential rental property transactions not later than June 30, 2017.

SECTION 14. Notwithstanding section 2, the residential dwelling’s energy rating and label, as established by the department of energy resources in section 11G½ of chapter 25A of the General Laws, shall not be required to be made available under section 97A of chapter 13 of the General Laws until January 1, 2018.

SECTION 15. (a) On or before December 31, 2016, the department of energy resources shall determine whether to set appropriate targets for electric companies to procure viable and cost-effective energy storage systems to be achieved by January 1, 2020. As part of this decision, the department may consider a variety of policies to encourage the cost-effective deployment of energy storage systems, including the refinement of existing procurement methods to properly value energy storage systems, the use of alternative compliance payments to develop pilot programs and the use of energy efficiency funds under section 11H of chapter 25A of the General Laws if the department determines that the energy storage system is installed at a customer’s premises, provides sustainable peak load reductions on either the electric or gas distribution systems and is otherwise consistent with section 11G of said chapter 25A.

(b) The department shall adopt the procurement targets, if determined to be appropriate under subsection (a), by July 1, 2017. The department shall reevaluate the procurement targets not less than once every 3 years.

(c) Not later than January 1, 2020, each electric company entity shall submit a report to the department of energy resources demonstrating that it has complied with the energy storage system procurement targets and policies adopted by the department pursuant to this section.

SECTION 16. There shall be an energy efficiency task force to develop recommendations and proposed statutory changes for the creation of a successor energy efficiency program to be implemented starting in 2018 at the conclusion of the current 3-year, statewide energy efficiency plan approved pursuant to section 21 of chapter 25 of the General Laws. In making its recommendations, the task force shall consider: the successes, challenges and shortcomings of the current program design; the role of the program administrators; the designation or creation of a single entity, other than a gas or electric company, to run the program; ways to increase market competition; alternative funding mechanisms for energy efficiency; the identification of targets for energy efficiency customer participation and system load reduction; and alternative program design and best practices implemented in other states and countries. The task force shall consider, but not be constrained by, the current cost-effective test for program measures.

The task force shall consist of the following members or their designees: the commissioner of the department of energy resources, who shall serve as chair; the attorney general; 2 members of the senate, 1 of whom shall be appointed by the minority leader; 2 members of the house of representatives, 1 of whom shall be appointed by the minority leader; a representative from the low-income weatherization and fuel assistance program network; a representative from the Northeast Energy Efficiency Partnerships, Inc.; and 5 members who shall be appointed by the governor, 1 of whom shall be a representative of the business community, including large commercial and industrial end-users, 1 of whom shall be a representative of an energy efficiency business, 1 of whom shall be a representative of an electric and natural gas distribution company, 1 of whom shall be a representative of a municipal aggregator and 1 of whom shall be a representative of an energy services company.

The task force shall convene its first meeting by October 1, 2016. The task force may retain the assistance of experts to conduct research or facilitate the task force process. The task force shall report on its recommendations, which shall include drafts of legislation, to the house and senate chairs of the joint committee on telecommunications, utilities and energy by June 1, 2017.

SECTION 17. The department of energy resources, in consultation with the department of public utilities, shall conduct a study on the need to modernize the electric grid with the goal of reducing demand, reducing energy costs to ratepayers, integrating distributed energy resources, reducing carbon emissions and enhancing reliability and resiliency. As part of the study, the department shall consider alternative regulatory, incentive and ratemaking structures and market design, including the creation of an open market for third-party services, to achieve these goals. The department shall also consider ways to enhance consumer knowledge regarding energy use and provide energy customers with tools to support effective management of their energy bills.

As part of the study, the department shall engage in an extensive, open and transparent stakeholder process. Stakeholders shall consist of, but not be limited to: the attorney general in the role of the ratepayer advocate or a designee; 2 members of the senate, 1 of whom shall be appointed by the minority leader; 2 members of the house of representatives, 1 of whom shall be appointed by the minority leader; an appointee from the Massachusetts Municipal Association, Inc.; an appointee from the Associated Industries of Massachusetts, Inc.; an appointee from the National Consumer Law Center, Inc.; and an appointee from the Northeast Clean Energy Council, Inc.; and an appointee representing environmental interests. The department shall conduct at least 2 public hearings in geographically diverse locations and shall submit a report, along with proposed statutory and regulatory changes, to the clerks of the senate and house of representatives and the house and senate chairs of the joint committee on telecommunications, utilities and energy not later than October 1, 2017.

SECTION 18. There shall be a renewable energy infrastructure financing task force which shall examine industry gaps in financing clean and renewable energy infrastructure in the commonwealth.

The task force shall consist of the following members: the secretary of energy and environmental affairs or a designee, who shall serve as chair; the senate chair of the joint committee on telecommunications, utilities and energy or a designee; the house chair of the joint committee on telecommunications, utilities and energy or a designee; the commissioner of the department of energy resources or a designee; the chair of the department of public utilities or a designee; the president of the Massachusetts clean energy technology center or a designee; the president of Massachusetts Development Finance Agency or a designee; and 5 persons appointed by the governor who shall each have expertise in at least 1 of the following subjects: renewable energy financing, management of clean energy companies or the making or advancing of clean energy policy.

The task force shall convene its first meeting not later than September 1, 2016. It shall research and identify gaps in renewable energy infrastructure financing and shall develop a plan to reduce those gaps, which may include recommendations to stimulate private capital investment, develop bridge financing mechanisms, encourage community renewable energy infrastructure, establish a loan program or finance entity, advance public and private partnerships and other partnerships for financing renewable energy infrastructure that will help meet the targets established in chapter 298 of the acts of 2008 and chapter 21N of the General Laws. The plan shall include cost estimates and recommend potential funding sources.

The task force shall file the plan along with recommended regulatory changes and draft legislation with the governor, the secretary of energy and environmental affairs, the clerks of the senate and house of representatives, the chairs of the joint committee on telecommunications, utilities and energy and the chairs of the senate and house committees on ways and means not later than January 1, 2017.

SECTION 19. Sections 1 to 3, inclusive, shall take effect on July 1, 2017