For Immediate Release - February 15, 2005

Division Of Energy Resources Issues Report On Renewable Energy

Division Of Energy Resources Issues Report On Renewable Energy

The state's Division of Energy Resources ("DOER") issued a report today on Massachusetts' progress in meeting new requirements for the use of renewable energy sources such as wind, wood and methane gas to generate electricity.

Beginning in 2003, all retail electric suppliers were required to obtain at least 1% of their total sales to customers from renewable energy sources. The intent is to foster the development of new renewable generation in the region, thereby reducing dependency on foreign oil and natural gas from outside the region as well as improving the environment.

Commissioner David L. O'Connor reports that all of the suppliers subject to this requirement complied with the law, with electricity generation coming mainly from power plants that use wood from New England forests and methane gas from regional landfills. "This means that about 500,000 megawatt hours of electricity was generated using renewable fuels found here in New England. That's enough to serve over 75,000 households for a year and avoid the use of 4,100 million cubic feet of natural gas or 915,000 barrels of oil for electricity generation," said Commissioner O'Connor.

Beth Lindstrom, Director of the Office of Consumer Affairs and Business Regulation, pointed to the rise in prices for natural gas and oil as an important reason for fostering the development of renewable generation in the region. "Businesses and consumers want protection against volatility in their energy prices and renewable energy helps provide that while also reducing our dependency on foreign resources," said Director Lindstrom.

Secretary of Commonwealth Development Douglas Foy, who also oversees the implementation of Governor Romney's Climate Protection Plan noted, "The Renewable Portfolio Standard program plays a critical role in shifting the state's energy needs away from fossil fuels and reducing emissions of greenhouse gases. The first year of this program avoided emission of 320,000 tons of carbon and we have just begun to tap the full potential of the renewable resources in our state and region," said Secretary Foy.

Under the Electric Industry Restructuring Act of 1997, power suppliers are required to use increasing amounts of electricity generated from new renewable sources each year, rising to 4% of total sales by 2009. DOER's report projects that there will not be enough renewable energy to meet the entire requirement of 1.5% of total sales for calendar year 2004. However, suppliers that cannot meet the requirement will pay alternative compliance payments of approximately $15 million. These payments will be invested in new renewable energy projects to increase available supplies.

Commissioner O'Connor forecasts that the shortfall will be temporary as the premium for renewable electricity, fostered by this and similar programs in other states, stimulates investments in new sources of power. "We're off to a good start in meeting the state's renewable energy goals. Some lag time in development is to be expected in the early years. New renewable energy projects are now working through the permitting and construction process and we anticipate that supply will catch-up with demand in subsequent years," predicted O'Connor.

The report is available on the Division of Energy Resources website at www.mass.gov/doer.