Proposed Regulations Promote Adoption of Renewable Energy
Net metering rules will encourage consumers to generate their own renewable power while long-term contracts will support clean energy financing
The DPU opened rulemakings for the new "net metering" and long-term contract provisions of the Green Communities Act, the landmark energy reform bill signed into law by Governor Patrick in July.
"The Green Communities Act put Massachusetts on a new course toward a clean energy future, and these regulations move us further in that direction," said Secretary Bowles. "New net metering rules will make renewable power more advantageous for consumers who install it for their own use, while long-term contracts for renewable power will help renewable energy developers in Massachusetts obtain the financing they need to get clean energy projects off the ground."
Following the Green Communities Act, the DPU's draft regulations would make renewable energy more economically beneficial for business and residential customers who install wind turbines or solar panels by changing the Commonwealth's rules for net metering. Net metering lets customers who generate their own renewable power send excess electricity they generate back to their electric distribution company, offsetting their electric bill for the power they purchase from the grid when their renewable energy installation isn't meeting their full needs.
In the past, state law restricted net metering to on-site generation with a capacity of 60 kilowatts or less. In compliance with the Green Communities Act, the DPU's regulations will make it possible for customers who own larger wind turbines or solar power installations - up to 2 megawatts - to offset their electric bills with the extra power they don't use, and at the higher retail price, rather than the lower wholesale rate allowed in the past. The new law and regulations also provide for "neighborhood net metering," allowing credits for renewable power generation to be shared among neighboring households.
"These rules will put renewable power generated on-site on economic par with electricity purchased from the grid," said DPU Chairman Paul Hibbard.
"The new rules are a big shot in the arm for the solar industry," said Paul Gromer, Executive Director of the Solar Energy Business Association of New England. "They will make solar power more affordable and help the solar industry to create new, green jobs across Massachusetts."
In addition, the regulations would enable cities and towns to take particular advantage of the Green Communities Act's new net metering provisions. Government entities, such as municipalities, could reap net metering benefits, for example, for each wind turbine they install for their own use with capacity up to 2 megawatts.
"The town of Falmouth will be one of the first beneficiaries of the net metering provisions of the Green Communities Act, with a new 1.65 megawatt wind turbine coming on line early this summer," said Falmouth Town Manager Robert L. Whritenour Jr. "While the project was financially feasible without net metering, this makes this project a home run. This legislation is a tremendous incentive which will allow Falmouth to pursue additional renewable energy initiatives."
Also under the Act, electric utility companies are required to enter into 10- to 15-year contracts with Massachusetts-based renewable energy providers, a provision meant to help the state's clean energy developers obtain the financing needed to build their projects. Electric distribution companies must solicit long-term contracts for renewable power at least twice in the next five years. The proposed DPU regulations restate criteria set out by the Green Communities Act that the distribution companies must use in evaluating potential long-term contracts, and provide for a solicitation process coordinated by the Department of Energy Resources (DOER).
"Long-term contracts provide price certainty for developers of renewable energy facilities. This will help them finance the projects that will give us greener power in the future," said DOER Commissioner Philip Giudice.
"Long-term contracts done through a competitive process are critical for financing the capital-intensive wind projects that can deliver clean, renewable energy to Massachusetts," said Paul Gaynor, CEO and President of First Wind, based in Newton. "In this time of unprecedented financial uncertainty, this is a bold step by Gov. Patrick and Secretary Bowles that will foster more renewable development, predictable energy prices for consumers, and provide a much-needed boost to our local green economy."
The department will hold public hearings on the net metering regulations on April 27, and on the renewable power long-term contract regulations on April 28. In addition, as part of the net metering rulemaking, electric distribution companies must file a proposed model tariff with the DPU by March 19, and the DPU will hold a technical conference on the proposed regulations April 2.
April 14 is the deadline for filing public comments with the DPU on both sets of regulations.