SENATE . . . . . . . . . . . . . . No. 2545
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The Commonwealth of Massachusetts
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In the One Hundred and Ninetieth General Court
(2017-2018)
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SENATE, Thursday, June 7, 2018
The committee on Ways and Means to whom was referred the Senate Bill relative to 2030 and 2040 emissions benchmarks (Senate, No. 479) (the committee on Senate Global Warming and Climate Change having recommended that the bill be amended by substituting a new draft entitled “An Act to promote a clean energy future” (Senate, No. 2302) (also based on Senate, Nos. 477, 478, changed and 1974 and House, No. 3994),-- reports, recommending that the same ought to pass with an amendment substituting a new draft entitled “An Act to promote a clean energy future” (Senate, No. 2545).
For the committee,
Karen E. Spilka
SENATE . . . . . . . . . . . . . . No. 2545
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The Commonwealth of Massachusetts
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In the One Hundred and Ninetieth General Court
(2017-2018)
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An Act to promote a clean energy future.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. Section 1 of chapter 21N of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by striking out the definition of “Direct emissions” and inserting in place thereof the following definition:-
“Direct emissions”, emissions from sources that are owned or operated, in whole or in part, by a person, entity or facility including, but not limited to: (i) emissions from a transportation vehicle; (ii) a building or structure, including but not limited to a residential, commercial, industrial or institutional building or structure; or (iii) an industrial, manufacturing or other business process.
SECTION 2. Said section 1 of said chapter 21N, as so appearing, is hereby further amended by inserting after the definition of “Greenhouse gas emissions source” the following definition:-
“Greenhouse gas-emitting priority”, natural gas, petroleum, coal and any solid, liquid or gaseous fuel derived therefrom, and any other matter identified by the department as a greenhouse gas-emitting priority that emits or is capable of emitting a greenhouse gas when burned.
SECTION 3. Said section 1 of said chapter 21N, as so appearing, is hereby further amended by inserting after the word “of”, in line 50, the following words:- a greenhouse gas-emitting priority or.
SECTION 4. Said section 1 of said chapter 21N is hereby further amended by striking out the definition of “Market-based compliance mechanism”, in lines 56 to 65, inclusive, and inserting in place thereof the following definition:-
“Market-based compliance mechanism”, any form of price compliance system imposed on sources or categories of sources or any form of pricing mechanism imposed directly on greenhouse gas-emitting priorities or on the distribution or sale of greenhouse gas-emitting priorities which are designed to reduce emissions as required by this chapter including, but not limited to: (i) a system of market-based declining annual aggregate emissions limitations for sources or categories of sources that emit greenhouse gases; (ii) greenhouse gas emissions exchanges, banking, credits and other transactions governed by rules and protocols established by the secretary or a regional program that results in the same greenhouse gas emissions reduction, over the same time period, as direct compliance with a greenhouse gas emissions limit or emission reduction measure adopted by the executive office pursuant to this chapter; or (iii) a system of charges or exactions imposed to reduce statewide greenhouse gas emissions in whole or in part.
SECTION 5. Subsection (a) of section 2 of said chapter 21N, as so appearing, is hereby amended by striking out the first sentence and inserting in place thereof the following sentence:- The department shall monitor and regulate greenhouse gas-emitting priorities and direct and indirect emissions of greenhouse gases with the goal of reducing emissions in order to achieve greenhouse gas emissions limits established by this chapter.
SECTION 6. Subsection (b) of section 3 of said chapter 21N, as so appearing, is hereby amended by striking out clauses (2) and (3) and inserting in place thereof the following 2 clauses:- (2) a 2030 statewide greenhouse gas emissions limit accompanied by plans to achieve this limit in accordance with said section 4; provided, however, that the 2030 statewide greenhouse gas emissions limit shall maximize the ability of the commonwealth to meet the 2050 statewide greenhouse gas emissions limit; (3) a 2040 statewide greenhouse gas emissions limit accompanied by plans to achieve this limit in accordance with said section 4; provided, however, that the 2040 statewide greenhouse gas emissions limit shall maximize the ability of the commonwealth to meet the 2050 statewide greenhouse gas emissions limit.
SECTION 7. Subsection (a) of section 4 of said chapter 21N, as so appearing, is hereby amended by inserting after the first sentence the following 2 sentences:- The secretary shall further adopt the 2030 statewide greenhouse gas emissions limit pursuant to clause (2) of subsection (b) of section 3 which shall be between 35 per cent and 45 per cent below the 1990 emissions level and a plan for achieving that reduction. The secretary shall further adopt the 2040 statewide greenhouse gas emissions limit pursuant to clause (3) of said subsection (b) of said section 3 which shall be between 55 per cent and 65 per cent below the 1990 emissions level and a plan for achieving that reduction.
SECTION 8. Said subsection (a) of said section 4 of said chapter 21N, as so appearing, is hereby further amended by striking out the last sentence and inserting in place thereof the following sentence:- The 2020, 2030 and 2040 statewide greenhouse gas emissions limits and implementation plans shall comply with this section.
SECTION 9. Said section 4 of said chapter 21N, as so appearing, is hereby further amended by striking out, in line 17, the word "limit” and inserting in place thereof the following word:- limits.
SECTION 10. Said section 4 of said chapter 21N, as so appearing, is hereby further amended by striking out, in line 42, the words "2020 emission limit and implementing plan" and inserting in place thereof the following words:- 2020, 2030 and 2040 statewide greenhouse gas emissions limits and implementing plans.
SECTION 11. Said section 4 of said chapter 21N, as so appearing, is hereby further amended by striking out subsection (h) and inserting in place thereof the following subsection:-
(h) The secretary shall issue a 2050 emissions reduction plan that shall describe in detail the commonwealth’s actions and methods for achieving the 2030, 2040 and 2050 emissions limit required by subsection (b) of section 3 of chapter 21N. The 2050 emissions reduction plan shall: (i) address all sources and categories of sources that emit greenhouse gas emissions; (ii) take into account the imposition of market-based compliance mechanisms required in section 7A; and (iii) indicate for each source or category of sources how, to what extent and when the commonwealth will act to reduce its emissions in order to achieve the 2050 emissions limit required by said subsection (b) of section 3of chapter 21N. The secretary shall evaluate, adjust if necessary and publish updates to the 2050 emissions reduction plan at least once every 30 months, including assessments of the effectiveness, to date, of all actions, methods, regulations and programs designed to reduce greenhouse gas emissions and of if the actions, methods, regulations and programs disproportionately impact low-income households, minimize administrative burdens and minimize leakage.
SECTION 12. Said chapter 21N is hereby further amended by inserting after section 7 the following section:-
Section 7A. The secretary shall promulgate regulations establishing market-based compliance mechanisms for: (i) the transportation sector; provided, however, that the regulations shall, at a minimum, be designed to reduce passenger vehicle and light duty truck emissions; (ii) the commercial, industrial and institutional sectors, including but not limited to buildings and industrial, manufacturing and other business processes; and (iii) the residential building sector.
The market-based compliance mechanisms established pursuant to this section shall: (i) maximize the ability of the commonwealth to achieve the greenhouse gas emissions limits established pursuant to this chapter; and (ii) be designed to minimize disproportionate impacts on low-income households. The market-based compliance mechanisms may be established by joining any existing market-based compliance mechanisms. The secretary shall evaluate and adjust, if necessary, all market-based compliance mechanisms adopted pursuant to this section at least once every 30 months to meet the requirements of this section and to achieve greenhouse gas emissions limits. The regulations may be promulgated as part of a coordinated regional effort with other states or Canadian Provinces to implement, expand or join any other market-based compliance mechanisms. The department shall ensure it has adequate resources to implement the requirements of this chapter.
SECTION 13. Section 9 of said chapter 21N, as appearing in the 2016 Official Edition, is hereby amended by adding the following paragraph:-
This chapter shall apply to municipal electric departments and municipal light boards as defined in section 1 of chapter 164A; provided, however, that the secretary may exempt municipal electric departments and municipal light boards if the secretary determines that the exemption will not negatively impact the commonwealth’s ability to achieve the greenhouse gas emissions limits established pursuant to this chapter.
SECTION 14. Subsection (a) of section 11F of chapter 25A of the General Laws, as so appearing, is hereby amended by striking out clause (3) and inserting in place thereof the following clause:- (3) an additional 3 per cent of sales each year thereafter.
SECTION 15. Chapter 25A of the General Laws is hereby amended by adding the following section:-
Section 17. (a) The department shall establish an energy storage system target program 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, 2025. 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 2,000 megawatts energy storage system target.
(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 (f) 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.
(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 allowing for each distribution company and municipal lighting plant to discharge its obligations under this section 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.
SECTION 16. Section 139 of said chapter 164 of the General Laws, as appearing in the 2016 Official Edition, is hereby further amended by inserting after the word “charges”, in line 85, the second time it appears, the following words:- , including demand charges as part of a monthly minimum reliability contribution except as authorized under subsection (j).
SECTION 17. Said section 139 of chapter 164 of the General Laws, as so appearing, is hereby amended by striking out subsection (f) and inserting in place thereof the following subsection:-
(f) No aggregate net metering cap shall apply to a solar net metering facility; provided, however, that the maximum amount of generating capacity eligible for net metering by a municipality or other governmental entity shall be 10 megawatts.
SECTION 18. Said section 139 of said chapter 164, as so appearing, is hereby further amended by inserting after the word “system”, in line 150, the following words:- ; provided, however, that a distribution company shall not assess a demand charge unless it is a charge based on demand during a pre-determined portion of the hours of a day defined as peak hours of system demand and unless the distribution company has informed all of its customers of the manner in which any such demand charges are assessed; and provided further, that a distribution company shall only assess a demand charge if metering functionality or technology is available to the customer at a reasonable cost to provide the customer with near real time access to electricity usage data.
SECTION 19. Said section 139 of said chapter 164, as so appearing, is hereby further amended by striking out, in lines 175 to 177, inclusive, the words “; provided that, the date designated by the department shall be not later than December 31, 2018”.
SECTION 20. Section 16 of chapter 298 of the acts of 2008 is hereby amended by striking out, in lines 3 and 4, the words “, and shall expire on December 31, 2020”.
SECTION 21. The secretary of energy and environmental affairs shall conduct a detailed, quantitative modeling and analysis of the commonwealth’s energy economy and emissions, which shall be sufficient to identify multiple technically and economically-feasible pathways to reduce statewide emissions consistent with the 2050 emissions limit required by subsection (b) of section 3 of chapter 21N of the General Laws. Such modeling and analysis may employ back-casting methodology and may be conducted in conjunction with other states or regional entities as part of an analysis of reducing regional emissions by 2050 to a level consistent with those required by said chapter 21N. The secretary shall publish the results of its modeling and analysis and shall make the model, all model assumptions and all input and output data available for public inspection and use. The secretary shall file a report of its findings with the clerks of the senate and house of representatives, the senate and house committees on ways and means and the joint committee on telecommunications, utilities and energy not later than December 31, 2020.
SECTION 22. (a) Notwithstanding any general or special law to the contrary, the department of energy resources may determine and recommend offshore wind energy generation solicitations and procurements of up to 5,000 megawatts of aggregate nameplate capacity by December 31, 2035 if the department, after investigation, makes a written finding that procuring more than the 1,600 megawatts required by section 83C of chapter 169 of the acts of 2008 is consistent with the commonwealth’s energy policy, including the policies established in said chapter 169 and chapter 298 of the acts of 2008 and after consideration of the economic benefits of additional nameplate capacity and the impact on ratepayers, including distribution company customers. The department shall publish a plan to effectuate any such additional solicitations and procurements which shall include the recommendations of the joint procurement taskforce established in subsection (c). Notwithstanding the requirements of this section, as part of the plan, the department may require different solicitation, evaluation and selection of parties as required by said section 83C of said chapter 169 if such changes are recommended by the joint procurement taskforce or will benefit distribution company customers. The department shall hold at least 1 public hearing to consider the economic benefits of up to 5,000 megawatts of aggregate nameplate capacity and the impact of such subsequent solicitations and procurements on the commonwealth’s energy policies under this subsection and on ratepayers, including distribution company customers. The plan required to be published under this subsection shall be filed with the clerks of the senate and the house of representatives.
(b) Notwithstanding any general or special law to the contrary, the department of energy resources may determine and recommend clean energy generation solicitations and procurements for more than 9,450,000 megawatts-hours as required by section 83D of chapter 169 of the acts of 2008 if the department, after investigation, makes a written finding that doing so is consistent with the commonwealth’s energy policy, including the policies established in said chapter 169 and chapter 298 of the acts of 2008 and after consideration of the economic benefits of additional clean energy generation and the impact on ratepayers, including distribution company customers. The department shall publish a plan to effectuate any such additional solicitations and procurements which shall include the recommendations of the joint procurement taskforce established in subsection (c). Notwithstanding the requirements of this section, as part of the plan, the department may require different solicition, evaluation and selection of parties as required by said section 83D of said chapter 169 if such changes are recommended by the joint procurement taskforce or will benefit distribution company customers. The department shall hold at least 1 public hearing to consider the economic benefits of more than 9,450,000 megawatts-hours of clean energy generation and the impact of such subsequent solicitations and procurements on the commonwealth’s energy policies under this subsection and on ratepayers, including distribution company customers. The plan required to be published under this subsection shall be filed with the clerks of the senate and the house of representatives.
(c) There shall be a joint procurement taskforce consisting of the commissioner of energy resources, the attorney general and representatives of the distribution companies to conduct a review of the procurements conducted pursuant to sections 83C and 83D of chapter 169 of the acts of 2008 to identify and report on the challenges and strengths in the respective procurement processes and to make recommendations to improve the process for future procurements. The taskforce shall: (i) compare the requirements of sections 83C and 83D of said chapter 169 to similar procurements in other states; (ii) examine the makeup of the procurement evaluation and selection teams; (iii) review the evaluation metrics as identified in the request for proposals and applied in the evaluation process; (iv) analyze the selection process utilized; (v) review the consideration given to economic impacts; (vi) consider the impact and feasibility of reducing the timeline of implementation between procurements under section 83C of said chapter 169; and (vii) analyze the impact of the procurements on distribution customers and energy markets. The taskforce shall make recommendations on improvements to the procurement process including, but not limited to: (1) changing the solicitation parties, the evaluation team and the selection team; (2) the appropriate role of the distribution companies in the process; (3) the evaluation metrics; (4) the impact of additional procurements on the price and availability of renewable energy credits pursuant to section 11F of chapter 25A of the General Laws; and (5) the efficacy of additional procurements. The task force shall file its report with the clerks of the senate and house of representative, the house and senate committees on ways and means and the joint committee on telecommunications, utilities and energy not later than December 31, 2019.
SECTION 23. Notwithstanding any general or special law to the contrary, the secretary of energy and environmental affairs shall publish the next report required by section 5 of chapter 21N of the General Laws not later than December 31, 2021.
SECTION 24. Clause (3) of subsection (a) section 11F of chapter 25A of the General Laws, as appearing in section 14, shall apply to 2019 and each year thereafter.
SECTION 25. Sections 16 to 18, inclusive, shall apply to any monthly minimum reliability contribution, including a monthly minimum reliability contribution approved by the department of public utilities to take effect on or before December 31, 2018. Any monthly minimum reliability contribution approved by the department of public utilities prior to the effective date of this section and sections 16 to 18, inclusive, that does not meet the requirements of said sections shall be refiled for review and approval by the department before taking effect.
SECTION 26. The 2030 statewide greenhouse gas emissions limit required by subsection (a) of section 4 of chapter 21N of the General Laws shall be adopted not later than January 1, 2021.
SECTION 27. The 2040 statewide greenhouse gas emissions limit required pursuant to subsection (a) of section 3 of chapter 21N of the General Laws shall be adopted not later than January 1, 2031.
SECTION 28. The department of energy resources shall establish the annual statewide deployment targets to be achieved in each distribution company’s and municipal lighting plant’s service territory in order to reach the 2,000 megawatt energy storage system target pursuant to subsection (a) of section 17 of chapter 25A of the General Laws not later than December 31, 2018.
SECTION 29. The regulations required pursuant to clause (i) of the first paragraph of section 7A of chapter 21N of the General Laws shall be promulgated and in effect not later than December 31, 2020.
SECTION 30. The regulations required pursuant to clause (ii) of said first paragraph of said section 7A of said chapter 21N shall be promulgated and in effect not later than December 31, 2021.
SECTION 31. The regulations required pursuant to clause (iii) of said first paragraph of said section 7A of said chapter 21N shall be promulgated and in effect not later than December 31, 2022.
SECTION 32. The regulations required pursuant to section 6 of chapter 21N shall be promulgated and in effect not later than December 31, 2023 and shall be sufficient to achieve a 2050 statewide emissions limit that is at least 80 per cent below the 1990 level.