Amendment #4 to H4738

Clean Peak Energy Resources

Mr. Cusack of Braintree moves to amend the bill by adding the following section:

SECTION XX.  Chapter 169 of the acts of 2008 is hereby amended by inserting after section 83D, inserted by chapter 188 of the acts of 2016, the following section:-

Section 83E.  (a) In order to facilitate the financing of clean peak energy resources, beginning not later than December 1, 2019, the department shall jointly and competitively solicit proposals for clean peak energy resources and, provided that reasonable proposals have been received, shall direct the distribution utilities to enter into cost-effective long-term contracts for clean peak energy resources for an annual amount equal to approximately 1,200 megawatts.  Long-term contracts executed pursuant to this section shall be subject to the approval of the department of public utilities and shall be apportioned among the distribution companies under this section.

(b)  The timetable and method for solicitation of long-term contracts shall be proposed by the department of energy resources and shall be subject to review and approval by the department of public utilities. The department of energy resources may conduct 2 or more competitive solicitations provided that the schedule shall ensure that the distribution companies enter into cost-effective long-term contracts for clean peak energy resources equal to approximately 1,200 megawatts of nameplate capacity by December 31, 2020.

(c)  For purposes of this section, a long-term contract shall be a contract with a term of 10 years with a clean peak resource for clean peak attributes or clean peak attributes and energy. At least 50 per cent of the long-term contracts shall be for energy storage systems, while the remainder shall be Class I renewable energy generating sources of at least 20 MW, Class I renewable energy generating sources of at least 20 MW firmed up with existing hydroelectric generation facilities having a capacity up to 30 megawatts, or Class I renewable energy generating sources of at least 20 MW paired with energy storage systems provided energy storage systems are not required to be co-located with Class I renewable energy generating sources.

(d)  The department of public utilities shall promulgate regulations consistent with this section. The regulations shall: (1) allow owners and developers of clean peak energy resources to submit proposals for long-term contracts; (2) require that contracts executed by the distribution companies under such proposals are filed with, and approved by, the department of public utilities before they become effective; (3) require associated transmission costs to be incorporated into a proposal; provided that, to the extent there are transmission costs included in a bid, the department of public utilities may authorize or require the relevant parties to seek recovery of such 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 finds such recovery is in the public interest; and (4) require that the clean peak energy resources included under a proposal meet the following criteria: (i) provide enhanced electricity reliability within the commonwealth; (ii) contribute to reducing winter electricity price spikes; (iii) are cost effective to electric ratepayers in the commonwealth over the term of the contract taking into consideration potential economic and environmental benefits to the ratepayers; (iv) avoid line loss and mitigate transmission costs to the extent possible and ensure that transmission cost overruns, if any, are not borne by ratepayers; (v) guarantee energy delivery in winter months; (vi) adequately demonstrate project viability in a commercially reasonable timeframe as defined by the department; and (vii) where feasible, create and foster employment and economic development in the commonwealth.

(e)  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 recommendations by the attorney general, 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 consider 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 low cost clean peak energy resources on a long-term basis taking into account the factors outlined in this section.

(f)  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 all distribution customers in each service territory of the distribution companies.

(g) An electric distribution company may elect to retain renewable energy certificates to meet the applicable annual renewable portfolio standard requirements under said section 11F of said chapter 25A. If the renewable energy certificates are not so used, such companies shall sell such purchased renewable energy certificates attributed to Class I renewable portfolio standard eligible resources to minimize the costs to ratepayers under the contract; provided further, 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 reports recommending legislative changes if it determines that actions are being taken that will adversely affect the energy and renewable energy certificate markets.

(h)  The department of energy resources and the department of public utilities may jointly develop requirements for a bond or other security to ensure performance with requirements under this section.

(j)  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 actions as are necessary to ensure that the provisions not subject to the challenge are implemented expeditiously to achieve the public purposes of this section.