Clean Energy Leaders Applaud Groundbreaking Energy Bill Passed by Senate

Lawmakers Should Think Bold and Finalize Forward Thinking Legislation this Session

BOSTON — Leaders of the Alliance for Clean Energy Solutions, a coalition of business groups, clean energy companies, environmental organizations, health and consumer representatives dedicated to advancing clean energy for Massachusetts, issued the following statements regarding the comprehensive energy bill (S2372) passed this week by the Massachusetts Senate.

“Massachusetts needs clean energy resources to address the threat of climate change and reduce our dangerous overreliance on natural gas,” said Peter Shattuck, Massachusetts Director of Acadia Center and co-leader of ACES.  “This bill supports the scale and scope of clean energy options to responsibly meet our energy needs and build on Massachusetts’ climate leadership and capacity to develop innovative technologies.”

“The Massachusetts Senate has passed legislation that will enable the Commonwealth to take advantage of the benefits of clean energy and innovation by spurring the private sector investment needed to capture the cost reduction and economic development benefits of renewable energy sources in addition to their environmental benefits” said NECEC Executive Vice President Janet Gail Besser, co-leader of ACES. “We commend the Senate for including Class 1 eligible renewable energy resources, offshore wind, energy storage, fuel cells, and other key policies that will make Massachusetts’ energy more cost-competitive, reliable, and clean for future generations.”

“Clean energy, innovation, and economic growth are all intertwined here in Massachusetts, and the Senate’s energy bill allows the benefits we see from this connectivity to continue to expand,” said Jesse Mermell, President of The Alliance for Business Leadership. “By investing in clean energy – and the innovation around it – we reduce our impact on climate change, lower energy costs, and create jobs. The future of Massachusetts will be brighter because of this bill’s commitment to clean energy.”

ACES supports policies to bring diverse clean energy resources to Massachusetts. Alliance members share the view that such policies are critical for the Commonwealth to achieve its climate commitments and will also protect consumers and the environment. ACES promotes the following priorities for large-scale energy procurement:

  • Large-Scale Clean Energy Procurements – authorize procurement of Renewable Portfolio (RPS)-eligible resources (such as onshore wind) and hydroelectricity in order to facilitate cost-effective achievement of the RPS, replace retiring generation, reduce greenhouse gas emissions and diversify our electricity supply.
  • Pairing of Wind and Hydroelectricity – require bundled procurements of RPS-eligible resources (such as onshore wind) and hydropower in order to drive in-region development and maximize efficient use of transmission for clean energy.
  • Meaningful Offshore Wind Development – authorize phased procurement of offshore wind of sufficient scale over 15 years in order to tap Massachusetts’ world-class offshore wind resource and develop a sustainable industry in Massachusetts.
  • Energy Procurement Standards and Criteria – competitively procure cost-effective and environmentally preferable clean energy resources through a procurement process that protects against self dealing, and ensures reliability, price stability, affordability for all income levels, and ensures that environmental impacts of electricity generation and transmission are appropriately avoided, minimized, and mitigated.

 

ACES additionally supports complimentary energy policies including expansion of the renewable energy portfolio standard, incentives for energy storage, establishment of climate requirements for 2030 and 2040, and clean energy financing with appropriate consumer protections.

 

Contacts:
Krysia Wazny, Acadia Center
617-742-0054 x107, kwazny@acadiacenter.org

Kate Plourd Johnson, NECEC
617-500-9933, kjohnson@necec.org

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About ACES: The Alliance for Clean Energy Solutions (ACES) is a “coalition of coalitions” comprised of business groups, clean energy companies, environmental organizations, labor, health, and consumer advocates dedicated to advancing clean energy for Massachusetts. ACES is committed to ensuring that those charged with shaping Massachusetts’ energy policies have the most rigorous, current data on the benefits and costs of clean energy. Our goal is to ensure that the Commonwealth can attain a cost-effective, reliable and diverse energy supply to power its businesses, communities and households, which will reduce our reliance on fossil fuels, create a stable and prosperous business environment and meet the Commonwealth’s greenhouse gas emissions requirements. For more information: acesma.org

Members Include: Acadia Center, Alliance for Business Leadership, Climate Action Business Association, Clean Water Action, E4theFuture, Energy Storage Association, Environment Massachusetts, Environmental Entrepreneurs, Environmental League of Massachusetts, Health Care Without Harm, Mass Audubon, Mass Energy Consumers Alliance, Northeast Clean Energy Council, Northeast Energy Efficiency Council, RENEW Northeast, Solar Energy Business Association of New England, Union of Concerned Scientists, US Green Building Council Massachusetts Chapter, Vote Solar.

RGGI Experience Suggests CPP Concerns Are Overblown

The EPA’s Clean Power Plan (CPP)¹ is a groundbreaking regulation to combat climate change. Despite popular support for the rule, this first federal action to reduce carbon emissions from existing power plants has been met with considerable pushback in some quarters. The rule’s opponents most frequently cite three talking points, saying the CPP could 1) cause electricity prices to rise, 2) be a job killer, and 3) lead to economic stagnation.

These concerns will sound quite familiar to the states participating in the Regional Greenhouse Gas Initiative (RGGI), which launched in 2009. As the nation’s first market-based program to reduce carbon emissions, RGGI had plenty of detractors who used the same arguments as those currently being directed at the CPP. Now, with seven and a half years of RGGI experience to analyze, we can assess how the program has actually performed. As discussed in more detail in Acadia Center’s upcoming RGGI report, the early fears about RGGI’s impacts on electricity prices, jobs, and the economy should be put to rest. The figures below illustrate some of the key findings from RGGI’s operation to-date.

Electricity prices
By choosing to hold power plant owners responsible for the carbon they emit (rather than allowing them to pollute for free), the RGGI states accepted that it would become more expensive for fossil-fueled power plants to generate electricity. That, in turn, could result in higher electricity prices. But as shown in the table below, average retail electricity prices in the RGGI states actually declined by 3.4% from 2008 (the year before RGGI began) to 2015.2 The emergence of low-cost natural gas undoubtedly played a role in this trend, but so too have RGGI-funded investments in energy efficiency and renewable energy, both of which reduce demand for carbon-intensive electricity generation and reduce prices.

RGGI State Electricity Prices, 2008 and 2015 (Cents/kWh)
first table

Employment
Despite claims that RGGI would cost the region jobs by driving businesses away, the program has actually made a significant contribution to employment in the RGGI states. Independent analysis determined that RGGI was responsible for creating 28,500 job-years through 2014. Some of these jobs are the direct result of clean energy projects funded with RGGI auction revenue, and investments in energy efficiency and renewable energy have enabled clean companies to scale up their operations, creating new, high quality jobs for the local workforce. Additional jobs are created as consumers spend energy bill savings in local economies.

Economic stagnation?
Far from stagnating in comparison to the rest of the country, the economies of the RGGI states have outpaced growth in other states’ economies since the program launched in 2008. Over the same time period, RGGI emissions declined by 37%. The combination of economic growth with declining emissions witnessed in the RGGI states is both groundbreaking and a trend that is likely to spread as additional states adopt market-based climate programs like RGGI. Historically, electricity demand has been linked to economic growth, and electric sector emissions have increased during periods of economic expansion. However, this correlation has been broken in the RGGI region. As shown in the table below, economic growth in the RGGI states has exceeded growth in the rest of the country even as the RGGI states have surpassed their ambitious climate goals. Additionally, macroeconomic analysis of RGGI’s impact through 2014 shows that the program added nearly three billion dollars in net economic benefits for the region.

GDP Growth Rates in RGGI States versus Other Statessecond table

RGGI’s experience has demonstrated that a well-designed, market-based program can achieve environmental goals and drive economic growth. Emissions reductions under RGGI have come at far lower than expected costs, and the clean energy sector and economy as a whole have been boosted by the reinvestment of allowance revenue into energy efficiency and renewable energy programs. RGGI’s experience shows the actual impact of smart climate policy in practice. Before heeding dire predictions of potential impacts of the CPP, it is worth keeping this real-world experience in mind.

Stay tuned for our upcoming RGGI report with the latest on market trends, the RGGI program review, and the CPP.

 

The Supreme Court issued a stay on the Clean Power Plan in February, 2016, but as discussed in an earlier blog post, we expect the stay to be lifted and the Clean Power Plan to be enforced.

Energy Information Administration (EIA) 826 Dataset, http://www.eia.gov/electricity/data/eia826/