PETITION OF:

SECTION 1. Chapter 164 of the General Laws is hereby amended by adding, after section 138, the following section:-

Section 139. Least Cost Planning.

Section 139. (a) In this section, unless context otherwise requires, the following words shall have the following meanings:

“Least Cost Planning” (LCP), requires that all new power supplies and demand side management be prioritized for acceptance by the Department of Telecommunications and Energy according to the lowest combined financial, societal and environmental costs. The combined costs are to be used to prioritize the acquisition of sources of power, energy efficiency programs and demand side management programs and will be based on the assumptions in the following Power Supply Rankings Chart. Distribution companies and retail electricity suppliers will pay the penalties per megawatt hour listed in the Chart by purchasing new megawatts of renewable generation that meets requirements of MGL Chapter 125 A, Section 11 F.

(b) The Department of Telecommunications, Utilities and Energy will initiate proceedings at least every two years, or earlier at the discretion of the Chair, to adjust the Power Supply Rankings Chart listed below.

Power Supply Rankings Chart (in dollars per megawatt hour)

Coal combustion; $6.00

Clean Coal gasification; $4.5

Clean Coal gasification with carbon sequestration; $3.5

Oil #6: $5.00

Oil #2 combined cycle turbines; $4.00

Nuclear; $3.5

Natural gas combustion; $3.00

Natural gas combined cycle turbines; $2.00

Waste to energy; $2.00

Bio Mass Combustion; $1.00

Hydro; $0.5

Fuel cell; natural gas, $0.5; fuel cell with a renewable source of hydrogen, 0

Land-fill gas; 0

Bio Mass Composting; 0

Combined power and heat; 0

Wind; 0

Solar Thermal; 0

Solar Photovoltaic; 0

Energy Efficiency; minus $1

Demand side response management; minus $1;

peak demand side response management; minus $1.5

( c ) Within six months of the enactment of this act, all distribution companies and retail power suppliers shall submit to the Department a power supply procurement plan for all expected new demand of electric power supply in their service areas or regions of operation for a three year period. The Department will initiate proceedings to accept public comment on each plan.

(d) The Department’s approval of each plan will be contingent upon a determination that each utility and retail provider of electricity has demonstrated a reasonable attempt to purchase all available energy efficiency, demand side management and renewable energy supplies, as determined by a consultant under contract to the Department.

(e) The Department shall set a goal for each distribution company and retail provider of achieving zero growth of fossil fuel generated electricity based upon ISO New England’s projections for new demand of electric power supply growth within the three year time period.

(f) Contracts for renewables, efficiency and demand side management that have longer terms shall be given a higher priority by the Department.

(g) Within three years of the enactment of this legislation all distribution companies and retail suppliers of electricity shall submit a power supply procurement plan for their complete power supply portfolio to the Department for review and approval. Every five years from that time going forward the Department will undertake review of all distribution companies and retail power suppliers least cost power supply procurement plans for review and approval.

(h) The Department shall set a new goal after three years, for distribution companies and retail suppliers, that reduces the consumption of fossil fuel based electricity from levels of usage current at that time. The Department’s approval of the plans shall be based on how well the distribution companies and retail suppliers achieve the reduction of fossil fuel generated electricity in relation to the availability of non fossil fuel resources as determined by a consultant under contract and employ of the department.

(i) The consultant(s) under contract with the department shall be paid through an assessment of each utility that shall be recoverable through an increase in systems benefit charge for energy efficiency programs.