Patrick-Murray Administration Announces Approval of Solicitation for New Round of Low Cost Renewable Energy
Approval allows renewably energy developers to take advantage of expiring federal tax incentives, saving money for ratepayers
BOSTON – Friday, March 29, 2013 - Advancing clean energy economic development goals in clean energy legislation signed by Governor Patrick in 2008 and 2012, the Department of Public Utilities (DPU) approved an aggressive timetable and method of solicitation for renewable resources filed by the four investor owned electric utilities earlier this month.
This approval paves the way for the utilities to solicit bids for Class I renewable energy (primarily wind and solar) to supply clean energy at low cost to Massachusetts customers.
The approval announced today is the next step in implementation of the Green Community Act and the Act Relative to Competitively Priced Electricity in the Commonwealth, which requires Massachusetts electric distribution companies to enter into low cost 10- to 20-year contracts with renewable energy projects located in the region. The utilities participating in this joint solicitation are NSTAR, National Grid, Fitchburg Gas and Electric Light Company and Western Massachusetts Electric Company.
“This approval today demonstrates that Massachusetts is continuing on the path to the clean energy future,” said Energy and Environment Secretary Rick Sullivan. “A growing and sustainable market for wind and solar will drive lower energy costs, grow clean energy jobs, and improve our environment.”
“Approval of this solicitation should make it absolutely clear to developers of renewable energy that Massachusetts intends to move forward quickly in order to allow projects to capture the benefits of the federal Production Tax Credit, which requires projects to be moving forward in their development by the end of this year,” said Ann G. Berwick, Chair of the Massachusetts Department of Public Utilities.
“We are committed to working with our utilities in Massachusetts to bring low-cost renewable energy resources to the Commonwealth,” said Department of Energy Resources Commissioner Mark Sylvia.
Under the new provisions of the Act Relative to Competitively Priced Electricity in the Commonwealth, electric distribution companies must solicit long-term contracts for renewable power at least twice by December 31, 2016, for a total of 4 percent of each company’s distribution sales. Eligible projects are those that qualify for Renewable Energy Credits (RECs) under the Massachusetts Renewable Portfolio Standard Class I regulations.
Under the RPS, electricity suppliers are required to purchase a minimum percentage of their power from qualified renewable energy suppliers each year. Set at 5 percent in 2010, the minimum benchmark increases by 1 percent annually under the Green Communities Act. Both the RPS and the new requirement for long-term contracting are meant to provide certainty for clean energy developers and help them obtain the financing needed to build successful projects.
With this approval, the electric distribution companies will begin a joint competitive solicitation for long-term renewable energy contracts in early April, with bids due approximately a month later. Contracts with successful renewable energy bidders are anticipated to be signed in the fall, after which the power purchase agreements of each individual utility company will be submitted to the Department of Public Utilities for further review and approval.
Massachusetts will continue to work with the other New England states on a regional coordinated procurement of renewable energy. The New England Governors adopted a resolution last year that directs The New England States Committee on Electricity (NESCOE) to finalize a renewable energy procurement this year on behalf of the New England states. Massachusetts plans on using this process for the second round of the Commonwealth’s procurement. NESCOE has developed solicitation and contract documents for procurement as early as this fall that could include a solicitation for large hydro and would help unlock a significant renewable energy resource constrained by transmission. The New England states and NESCOE have made significant progress with this regional coordinated procurement process, and Massachusetts will continue to collaborate with our neighboring New England states to make this process a success.