Senate bill seeks bigger strides toward renewable energy base

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STATE HOUSE — The Massachusetts Senate plans an aggressive approach to bolstering the state’s power supplies with renewable resources like hydropower and offshore wind, proposing legislation on Friday that would go further than the House to require the purchase of 2,000 megawatts of offshore wind and roughly 1,500 megawatts of other clean energy resources.

The bill, which has been scheduled for debate in the Senate next Thursday, would also encourage utilities to purchase energy storage systems to maximize the value of the new clean energy generation, and includes provisions to support improved energy efficiency in homes.

Senate Ways and Means Chairwoman Karen Spilka and Sen. Benjamin Downing, the co-chair of the Telecommunications, Utilities and Energy Committee, held a briefing on the bill Friday morning as it was being polled through committee.

“This is an energy bill with a climate focus,” Downing said, suggesting the bill, like the House’s, would use competition to keep costs down with the ultimate goal of helping the state meet its carbon emission reduction requirements by 2020.

The bill (S 2372) would require utilities to solicit long-term contracts of between 15 years and 20 years for 2,000 megawatts of offshore wind by 2030, well beyond the 1,200 megawatts proposed in the House bill.

The Senate bill, according to Downing, would also allow any offshore wind developers to compete for those contracts, a departure from the House, which included eligibility criteria in its bill that excludes the controversial Cape Wind project in Nantucket Sound from competing.

“We want all projects that are out there to be able to compete to get the best deal for ratepayers,” Downing said.

Spilka said the bill would also encourage the offshore wind industry to make Massachusetts a base of operation, fostering job growth and economic development in parts of the state and creating new advanced manufacturing opportunities for energy storage systems. “It’s written to really foster open competitive bidding and especially in the case of offshore wind to encourage economic development,” Spilka said.

In addition to offshore wind, Senate leaders are proposing a separate procurement of roughly 1,500 megawatts of clean energy generation from other sources, including hydropower, onshore wind, energy storage, anaerobic digestion, solar and others.

While the Senate directs the Department of Public Utilities to give “preference” to hydropower projects that combine other resources, it gives more flexibility to utilities than the House bill that envisioned contracts for 1,200 megawatts of large-scale hydropower, with the opportunity to combine land-based wind into any proposal.

The push on Beacon Hill to diversify the state’s energy portfolio comes at time when policymakers are trying to prepare for the loss in coming years of 10,000 megawatts of power generation from the closure of fossil fuel plants and Pilgrim Nuclear Power Station.

With the state heavily reliant on natural gas for its energy, lawmakers are trying to shift the market towards clean energy to help meet pollution reduction mandates under the Global Warming Solutions Act without driving up already high New England energy prices.

“I think if we do not act, prices will continue to be incredibly volatile in Massachusetts. We’ve seen this over time that prices are very weather-dependent and our over-reliance on natural gas leaves us exposed to that,” Downing said. The Pittsfield Democrat said the bill should “stabilize” costs in the short-term.

While both the House and Senate bills propose long-term contracts for offshore wind and hydropower, the Senate bill would also update what is known as the Renewable Energy Portfolio Standard to double the amount of clean energy utilities must purchase from an additional 1 percent each year to 2 percent.

Downing said this will lead to the state achieving a mix of 38 percent renewable energy by 2030.

The Pittsfield senator, who had been somewhat critical of the House bill because of its lack of focus on energy efficiency, pointed out other sections of the bill that would require a home energy audit to be done within three years prior to a sale. Homes would be given an energy efficiency rating so that buyers had that information before purchase, Downing said, comparing it to stickers on cars that estimate miles-per-gallon and annual fuel costs for all vehicles sold.

The bill also creates an energy efficiency task force to develop recommendations for future efficiency programs. “Being better than 49 other states that are doing bad isn’t good enough,” Downing said.

The bill does not include a House-backed proposal that would authorize energy distribution companies to issue a “remuneration” charge, capped at 2.75 percent and regulated by the state Department of Public Utilities. The charge would allow utilities to recoup costs associated with the procurements and possible construction of new transmission infrastructure.

“We don’t think there’s a compelling public policy case for that,” Downing said of remuneration.

The bill also does not address the solar caps, which are already being approached in some regions despite the increase signed into law earlier this year, or gas leaks or pipeline tariffs.

“I think we expect a robust debate on solar and couple of other issues that are not included here,” Downing said, alluding to floor amendments that will be offered in the coming days by senators.

Environmental League of Massachusetts President George Bachrach, who has been promoting a bill that would embody what Gov. Charlie Baker refers to as a “combo platter” of energy options, offered his support Friday morning.

“New reports show Boston will be drowning as temperatures and sea levels rise. We urgently need more energy, but it must be clean energy. The Senate bill will increase energy from offshore wind with sufficient scale to reduce costs for customers while creating manufacturing and high-tech jobs in our state. It ensures onshore wind, hydro and local renewables will make up a big part of our energy portfolio,” Bachrach said.

It will likely be challenging for House and Senate leaders to agree on a consensus energy bill prior to the July 31 end of formal sessions since there are already many differences with between the House and Senate bills, with the Senate likely to tack on more differences during floor debate next week. Branch leaders sparred for months this session over solar energy policy, but leaders have also identified this larger energy bill as a priority for passage this year.

Read a bill summary of the Senate Ways and Means energy proposal.

— Written by Matt Murphy

Copyright State House News Service