Exciting Maine Offshore Wind Roadmap Released Today by Governor Mills’ Energy Office

Maine has announced  a plan to harness offshore wind is doubly exciting and promising, both for addressing climate change and taking advantage of an economic opportunity that only comes along once in a generation. The Roadmap is a result of the dedicated efforts of Maine’s Governor, the Maine Climate Council, the State Legislature, and many others. Offshore wind could become one of Maine’s leading industries, providing jobs to laborers, engineers, electricians, constructions experts and a host of other jobs yet to be developed. Maine is a world leader in developing offshore floating wind turbines, and the future is bright with promise.

But Maine’s Offshore Wind Map plan is not a gold rush toward wind power. Instead, it is designed to protect Maine’s existing fisheries and wildlife habitats. The roadmap won’t be accomplished behind closed doors, but out in the open as part of an effort to include all stakeholders. All of Maine’s people must rise on the tide of economic and environmental benefits: rural communities, labor, indigenous peoples, and those who are economically disadvantaged.

The Roadmap sets a specific timeline from 2023 and beyond to accomplish various tasks, from a procurement project to fulfill a percentage of Maine’s electricity needs to permitting and leasing. All to further and complete Maine’s offshore wind goals.

Acadia Center is dedicated to using its expertise to promote clean, efficient energy now and in the future, and we welcome the fantastic commitment Maine has made to climate matters generally, to promoting Maine’s abundant offshore wind resource, and for providing a Roadmap to achieving the goal of harnessing offshore wind.

2023 Key Opportunities Webinar Summary

In Acadia Center’s most recent webinar, we discussed the most impactful work we undertook in 2023 and some of the projects in 2023 we believe will have the greatest effect in the fight for a livable climate and a stronger, more equitable economy.

First to present was Amy Boyd, Vice President of Climate & Clean Energy Policy. She highlighted many of the ways our work in 2022 sets us up for the work we are now pursuing in 2023. She broke down the major accomplishments Acadia Center achieved in 2022 by our 3 core themes: Research, Advocate, Implement.

Research

We produced PowerHouse, a home energy simulator that provides state specific data that allows us to tell the emissions and costs of energy in single and small multifamily housing. With this information, we are able to show the environmental, health, and cost impacts that come from electrification or continued use of fossil fuels, as well as weatherization for our buildings. This allows us to persuasively advocate for better building regulations, electrification, and health standards for consumers, and works to counter the information that fossil fuel companies rely on to assert that electrification is too expensive.

We also published “The Future Is Electric” in February of 2022, which showed that electrification and weatherization would reduce operating costs of New Jersey homes and emissions substantially in the state. We were able to advocate for better incentive programs to make electrification and weatherization more accessible for consumers.

Advocate

We were able to support and pass major bills in Rhode Island that will deliver 100% clean energy in the state by 2033, the earliest target in the nation. Half of RI’s load will be met through procurements for offshore wind and other clean energy can come through partnership with other states to build more clean energy transmission. Acadia Center was able to deliver on our advocacy here by calling attention to the urgency of the climate crisis with our partners and backing up our proposals with data and analytics.

Implement

We  created the Beyond Gas Coalition, which brings together advocates to combine powers and bring forth comments that push for the phasing out of fossil fuels in electrifiable sectors.

Reforming Energy System Planning for Equity and Climate Transformation (RESPECT) highlights significant barriers the utility business model creates for driving change at the speed of the climate crisis. It proposes two key reforms: creating a statewide entity charged with implementing a state’s climate and equity goals, and integrated planning across fuels, utility territories, and other unnecessary silos.

Amy spoke at the Restructuring Roundtable and New England Conference of Public Utilities Commissioners about the issues raised by RESPECT and are continuing to push for changes to the utilities business model.

Acadia Center used its expertise on renewable natural gas and alternative fuels to fight back against gas companies’ attempts to justify expansion on the Liberty RNG docket and Rhode Island Energy Facility Siting Board.

Part of RESPECT was passed in Maine through LD1959, and we are introducing legislation to introduce RESPECT reforms in Massachusetts in 2023.

Additional 2022 highlights include:

• Being quoted in over 90 articles
• Made 10 podcast appearances
• Featured in 4 TV news segments
• Received 15,610 visitors on Twitter
• Got 355 mentions on Twitter
• Gained 200 followers on Twitter

Oliver Tully, Director of Utility Innovation and Reform was next to present on “Changing How Government & Utilities Work.” Our Utility Innovation initiative is focused on aligning utilities and energy policy with climate, consumer, and equity problems. We do so through 5 key strategies:

1. Reforming Energy System Planning for Equity and Climate Transformation (RESPECT)
2. Holding Public Utility Commissions (PUC) and state agencies accountable for advancing climate and environmental justice goals
3. Reforming utility business models and incentives so they benefit the public
4. Advancing grid modernization to enable a flexible and consumer-friendly energy system
5. Advancing gas utility reform to phase-out fossil gas

Our primary goals of RESPECT specifically are:

• Align utility planning with climate, equity, environmental justice, and clean energy requirements
• Clarify the role of utilities and reduce risk for investments
• Maximize benefits to consumers and the grid by enabling non-biased planning

The utility regulatory system gives utilities far too much power, including planning the future of the grid, owning the infrastructure that gets built, and serving customers. By having a financial stake, utilities have a conflict of interest that increases costs for consumers. The planning today is often siloed and falls short of equity and environmental justice goals.

The RESPECT proposal breaks down siloes and fully incorporates climate and environmental justice impacts through comprehensive energy system planning, as well as creating independent statewide planning entities to enforce transparency and reducing conflicts of interest.

We are currently working on Maine’s PUC’s Integrated Grid Planning proceeding, which builds on “An Act Regarding Utility Accountability and Grid Planning for Maine’s Clean Energy Future” which passed in 2022. We are also building support for bills that would implement RESPECT reforms in Massachusetts and New Jersey. Lastly, we are anticipating an Integrated Distribution System Planning proceeding sometime this year in Connecticut and will be involved in ensuring effective change.

Next to speak was Paola Moncada Tamayo, Policy Analyst for Acadia Center. She discussed Multistate Cooperation and its ability to maximize impacts, reduce costs, and expand reach. Through a multistate cap-and-trade program called the Regional Greenhouse Gas Initiative, known as RGGI, 11 states are able to cap greenhouse gas emissions from power plants. RGGI states have seen a reduction of 64 million tons of carbon emissions since the program began. The proceeds from the quarterly auctions so far have generated $1.19 billion dollars, which go towards clean energy programs. So far, RGGI has produced $1.2 billion in energy bill savings, 31.4 million MMBtu of thermal energy saved, 1,400-1,500 new jobs created, and saved 3.4 million MWh of energy.

Acadia Center has been deeply engaged in RGGI’s development over the past 15 years. We are currently updating our RGGI 10 Year Program Review, which will analyze the effectiveness of the program, as well as its impact on environmental justice communities.

Last to present was Ben Butterworth, Director of Climate, Energy, and Equity Analysis. He discussed the future of the gas distribution system. Right now, the gas distribution system delivers gas to 41% of the homes in New England. This gas is used for space heating, water heating, cooking, and drying clothes. The big question Acadia Center is asking is whether the continued existence of the gas distribution system is compatible with achieving net zero greenhouse gas emissions by 2050.

The lowest cost path to net zero emissions is to electrify almost everything. This means building space heating, water heating, cooking, cars, and smaller trucks should all be pushed toward electrification, not natural gas. However, this presents a direct threat to the continued existence of the natural gas utilities. Gas utilities have been promoting the idea of replacing natural gas with “green hydrogen” and “renewable natural gas,” allowing their continued existence while still hitting climate targets. However, these “alternative fuels” are still expensive, limited in supply, prone to leaking, not carbon neutral, incompatible with current infrastructure, present safety issues, and are inefficient. These “alternative fuels” should be reserved for hard-to-electrify sectors like aviation and chemical production.

Acadia Center has been active in this current debate. In Massachusetts we participated in the DPU 20-80 Investigation Assessing the Future of Natural Gas. In Rhode Island, we are involved in the PUC 22-01-NG Investigation into the Future of Gas, which is similar to the work happening in Massachusetts. And lastly, in Connecticut, where we are part of the Comprehensive Energy Strategy and Hydrogen Task Force. Acadia Center brings to the table our excellent analysis and data, modeling, questioning of assumptions, and we aim to highlight how those problematic assumptions impact policy recommendations. We did so in Massachusetts Future of Gas Study, which we demonstrated was flawed due to its ignoring of lifecycle emissions, underestimation of methane leaks, usage of outdated science, and underestimation of future costs of alternative fuels. For 2023, our goal is to leverage data and analysis to ensure that state-level policies utilize the best available data and science to treat RNG and hydrogen in a fair and balanced manner.

Acadia Center’s 2023 Summer Internship and Fellowship Opportunities

Acadia Center is thrilled to announce our newest openings for internships and fellowships in Summer of 2023. These internships and fellowships will run for 8-10 weeks from June to August and are open for applications now.

Howard Gray, Jr. Climate, Equity and Justice Internship

Acadia Center is seeking motivated undergraduate and graduate students to apply for its 2023 Howard Gray, Jr. Climate, Equity and Justice Internship. The Intern will work with Acadia Center staff – policy experts, researchers, attorneys, and communications professionals– on projects that directly impact the work of the organization. Interns may have the opportunity to meet with policymakers, attend state hearings and meetings, and work in coalition with other advocates. To learn more, follow the link below.

Howard Gray, Jr Climate, Equity, and Justice Intern 2023

Energy and Climate Data Analysis Internship

Acadia Center is seeking motivated undergraduate and graduate students for a summer internship program. The Energy and Climate Data Analysis Intern will conduct data research and analysis projects under supervision of our CLEAN-E team on issues around climate, clean energy, and energy justice challenges. Candidates should be excited by opportunities to use data to inform public policy and enjoy exploring creative ways to communicate their findings to broad audiences. Depending on the projects, the Interns may have the opportunity to meet with policymakers, attend state hearings and meetings, and work in coalition. To learn more, follow the link below.

Acadia Center Data Analysis Internship 2023

Roger E. Koontz Fellowship in Law and Climate Policy

Acadia Center is seeking motivated law students to apply for its Roger E. Koontz Fellowship in Law and Climate Policy. The Koontz Fellow will work with Acadia Center staff – policy experts, researchers, attorneys, and communications professionals– on projects that directly impact the work of the organization. Depending on the work, the Fellow may have the opportunity to meet with policymakers, attend public meetings and engage in coalition interactions. To learn more, follow the link below.

Roger E. Koontz Legal Fellow Summer 2023

Connecticut Releases Hydrogen Task Force Study: The Good, the Bad, and the Ugly

Background & Context

In January, the Connecticut Hydrogen Task Force released its report with recommendations on hydrogen-fueled energy in the state. The Task Force was established by Special Act 22-8 with an assignment to examine the sources of potential clean hydrogen and recommendations for potential end uses of hydrogen-fueled energy. It’s important to note that the legislation did not specifically ask the Task Force to study the most reasonable and cost-effective use of hydrogen to help the state reach its overarching GHG reduction goal of 80% below 2001 levels by 2050 – a critical shortcoming in Acadia Center’s view. Acadia Center has been heavily involved in the stakeholder process informing the development of the Report, including sitting on the End Uses Working Group.

The Task Force’s report comes at a time when hydrogen is a hot topic in the state and region. In 2022, Connecticut joined six other northeastern states to develop a proposal to become one of at least four regional clean hydrogen hubs designated through the federal Infrastructure Investment and Jobs Act (IIJA) Regional Clean Hydrogen Hubs Program. If selected, the states could receive anywhere from $400 million to $1.25 billion to develop and deploy a hydrogen hub in the region. Simultaneously, DEEP is currently in the process of developing an update to the state’s Comprehensive Energy Strategy, the overarching document that covers a broad set of energy policy recommendations for the state. The role of hydrogen will be a key area of focus in the CES, but it remains to be seen how much the Task Force Study will influence the direction of the CES.

Largely Keeps the Focus on Hard-to-Decarbonize Sectors

As Acadia Center has previously explained in greater detail here, clean hydrogen is and will continue to be a limited resource that should be strategically used in the sectors of the economy that are hardest to electrify, not building heating and passenger vehicles. Fortunately, the Report largely echoes Acadia Center’s stance on this issue, concluding that heat electrification will ultimately be the most cost-effective option for reducing carbon emissions for residential and commercial customers, and that hydrogen fuel cell passenger cars will likely be more expensive in terms of both upfront purchase and fueling costs, and need for a whole new set of fueling infrastructure.

A Few Problematic Recommendations

However, Acadia Center does have some concerns with a few key recommendations stemming from the report.

• Hydrogen Vehicle Tax Exemptions: The Report recommends that “The Legislature should consider tax exemptions for hydrogen vehicles and critical facilities that produce or use clean hydrogen.” While it potentially makes sense to incentivize hydrogen vehicles in portions of the transportation sector that are challenging to electrify (e.g., shipping, long-haul trucking) it makes zero sense to incentivize hydrogen fuel cell passenger vehicles, which are inferior to battery electric vehicles by basically every measure (as the Repot itself acknowledges).
• Hydrogen Blending for Power Plants and Industrial Facilities: A second concern is that the Report categorizes hydrogen blending for “non-core gas customers” (i.e., power generation and industrial heat) as a “high priority hydrogen end use” that should be further investigated by DEEP. However, the report fails to specify that such blending should be done only at the facility level, and not into the gas distribution system that serves all customers.
• Encouraging Hydrogen Producers to Report Fuel Carbon Intensity: Finally, the Report recommends that DEEP “Develop accounting mechanisms that encourage hydrogen producers to certify carbon intensity of produced hydrogen.” This shouldn’t be a voluntary program – DEEP should require that hydrogen producers certify the carbon intensity of the fuel they produce. Only then can we be sure that clean hydrogen really is clean.

Much Work Still to Be Done to Define a Reasonable Role of Hydrogen in Connecticut

Ultimately, before DEEP can determine the most reasonable, cost-effective role for hydrogen to play in helping Connecticut reach its long-term GHG emissions reduction goals, it’s necessary to evaluate the tradeoffs between different future “pathways” through an economy-wide modeling analysis, similar to what Massachusetts did in the 2050 Decarbonization Roadmap. This type of analysis would help the state to clearly understand how hydrogen fits into the overall, long-term decarbonization puzzle in the state. Connecticut still hasn’t undertaken that type of comprehensive analysis and this Report does not (and doesn’t pretend to) fill that void. As a result, the recommendations from the Report are of limited value and really serve as only the first step in understanding the appropriate role for hydrogen in Connecticut.

The Report highlights next steps for DEEP which Acadia Center is on board with, including advising DEEP to:

• Develop a definition of clean hydrogen appropriate for Connecticut.
• Evaluate the sufficiency of zero-emission electricity sources to meet both electric sector decarbonization goals and hydrogen production targets.
• Lead interstate and interagency coordination to develop a hydrogen roadmap and strategy that, among other things, examines the cost and availability of zero-carbon renewable energy resources to produce clean hydrogen and examines overall alignment with state policies and goals, including GHG reduction goals.

It’s critical for DEEP to follow through on these recommendations and economy-wide pathways modeling will be essential in supporting them in this task.

For more information:

Ben Butterworth, Director of Climate, Energy, and Equity Analysis, bbutterworth@acadiacenter.org, 617-742-0054  ext. 111

Hot Topic: Dispelling the Myths about Induction Stoves

Induction stoves have become a hot topic as of late. With the push for the transition to renewables getting stronger than ever, so does the push from fossil gas advocates. Their newest target is induction stovetops, and creating fear around the move away from gas stoves. We’re here to dispel some of the myths and misinformation around induction cooktops.

Myth: Induction is not as powerful as gas and doesn’t get as hot

Fact: Induction is actually far more powerful than gas, given how efficient they are at dispersing heat across the surface of the cookware. While open flames wrap around a pot or pan, losing temperature and equal heating, induction is able to cook more precisely.

Myth: You’ll have to replace all of your cookware, costing you hundreds more

Fact: Induction cooktops do require cookware made of magnetic materials, meaning copper and aluminum pans are unable to work. However, most good quality alloy, cast iron, and other ferromagnetic material pots and pans will work well on induction cooktops. You likely already have all of the cookware you would need for an induction system.

Myth: Glass cooktops aren’t strong and will break much easier

Fact: Induction cooktops are incredibly strong and are all safety tested to withstand significant weight and pressure. When shopping, look for ceramic glass top induction stoves for the safest and strongest option.

Myth: Induction stoves are more expensive than gas

Fact: While induction cooktops can be expensive, the Inflation Reduction Act has made it more affordable than ever. Even if installing a full induction stovetop is outside of your budget, there are single burner induction cooktops available for as little as $50. Once you have your induction cooktop, the actual cost of operating it is significantly less than a gas range or an electric range. Because induction stoves are incredibly efficient, they utilize 85-90% of the energy they generate, making them the most energy efficient cooktop option.

Myth: Induction stoves can interfere with medical devices like pacemakers

Fact: There has never been a recorded instance of pacemaker interference with induction cooktops. The American Medical Association has never listed induction cooktops as a risk to those with pacemakers, despite listing many other everyday devices that can interfere. The magnetic wave of an induction stove only extends about an inch off the surface when not covered in a pot or pan.

Additional benefits to switching to induction:

IRA rebates make it more affordable, with rental households and households earning less than $210k getting rebates of up to $840 to switch to induction from gas. Many state energy efficiency programs also offer incentives – for instance MassSave offers a $500 rebate. 

Switching to induction means fewer preventable illnesses and diseases in your household. In the last few years, studies have shown that natural gas infrastructure leaks more often than previously thought – making the greenhouse gas impact higher than coal in some cases. In addition, the gas mixture contains many toxic chemicals and stoves in the Boston area were found to leak even when not in use. Finally, gas in the household has proven to increase respiratory illnesses like asthma by as much as 12.7% for children.  

Acadia Center staff look ahead to 5 key areas of focus in 2023.

Potential Impacts of Grid Modernization Advisory Council in Massachusetts Already Taking Shape

Creation of the Council

On August 11, Massachusetts Governor Charlie Baker signed comprehensive climate legislation that will help boost offshore wind, adoption of electric vehicles, and building decarbonization. Among the many pieces of this extensive legislation was a requirement to develop of a Grid Modernization Advisory Council (Council). As part of this provision, electric distribution companies would be required to develop grid modernization plans and submit them to the Council. Acadia Center is hopeful that this Council will ensure that utility grid modernization plans are regularly updated, maximize benefits delivered to ratepayers, and provide for greater stakeholder input and public participation. Even before its members have been appointed, we are already seeing the impact of this new entity.

Grid Modernization Dockets, DPU 21-80 through 21-82

On Wednesday, December 2, the Department of Public Utilities (Department) issued a ruling in DPU Dockets 21-80 through 21-82, grid modernization proceedings for Eversource, National Grid, and Unitil. These proceedings required the companies to submit updated grid modernization plans, as well as plans to achieve full-scale deployment of advanced metering infrastructure. The companies submitted separate plans that included a ten-year grid modernization vision, a five-year strategic plan, and a four-year investment plan covering 2022-2025.

Acadia Center generally supported the implementation of these plans, but argued for some changes. We were concerned that 1) the proposed timelines for implementing time-varying rates (TVR) were far too slow; 2) by using an opt-in approach to TVR, the companies’ assumed customer participation rates were significantly lower than would be optimal to deliver the maximum possible benefits to customers; 3) the AMI plans did not propose specific AMI deployment performance metrics; 4) the plans either made passing mention or no mention of equity or environmental justice; and 5) the companies did not prioritize data access for customers and third-party vendors.

Acadia Center had some success in the proceeding, achieving some direct wins, such as the Department asking the companies to include a uniform statewide approach to evaluating equity of preauthorized grid modernization investments. However, a number of requests were left up in the air, thanks to the development of the new Grid Modernization Advisory Council.

The Department evaluated grid modernization performance metrics proposed by the companies and found some of them wanting, specifically the grid-facing and AMI performance metrics. They found that “additional work [was] needed in collaboration with the parties to develop performance metrics that appropriately track the quantitative benefits associated with grid-facing and customer-facing investments, and progress toward grid modernization objectives.” The Department also acknowledged several stakeholders’ arguments about the timeline for TVR and directed the companies to work with stakeholders “to identify AMI meter deployment strategies that may expedite and maximize the availability of TVR products to customers during the AMI deployment period.” The companies must now convene a stakeholder process to settle a number of outstanding issues, including the two above. This stakeholder process will convene at the soon-to-be-created Grid Modernization Advisory Council, where there will now be significantly increased transparency, deliberation, and stakeholder participation and input.

Grid Modernization Advisory Council Impacts in Other Dockets

We have also seen the impact of the coming Grid Modernization Advisory Council in other dockets. DPU 20-75-C was a long-winding docket assessing electric distribution companies’ optimal solutions for long-term planning for the interconnection of distributed generation facilities. Unfortunately, despite significant time and work invested by stakeholders and the Department, the Department opted to close its investigation in light of the creation of the new Council. While Acadia Center is concerned by the seemingly wasted time and effort in that docket, the long and overwrought process highlighted the need for reforms that will hopefully be provided by the Council.

Similarly, in DPU 22-22, an Eversource rate docket, the Department declined to move ahead with several pieces, including an electrification framework and revised peak periods, noting that certain factors would have to be settled at the newly created Council.

Acadia Center is hopeful that this coming Council will result in comprehensive and state-of-the-art grid modernization plans and a transparent and open stakeholder process to address these important issues.

For more information:

Kyle Murray, kmurray@acadiacenter.org,  617-742-0054 ext. 106

Mass. DPU Continues Fossil Fuel-Dominant Business-As-Usual

Earlier in December, the Massachusetts Department of Public Utilities (DPU) approved a petition by Eversource Energy to supply new gas service in the Town of Douglas, MA (DPU Docket No. 22-107). The town had initially requested gas supply as part of an economic development project and stated that gas service was a prerequisite before commercial and industrial customers would bring operations to the town. Douglas does not currently receive gas service, so to meet anticipated customer demand, Eversource must build new gas distribution infrastructure.

The DPU rejected arguments by Acadia Center and others that building brand new gas infrastructure is at odds with the Massachusetts’ climate goals and is not in the public interest. The Massachusetts 2050 Decarbonization Roadmap makes clear that to meet the state’s greenhouse gas emission reduction requirements, we must move rapidly away from fossil fuels towards clean and non-emitting alternatives.

Although the Douglas case involves a relatively small project, multiplying many small projects like this one will keep Massachusetts dependent on expensive fossil fuel infrastructure, rather than on a pathway of reducing emissions and ensuring a clean, equitable energy system for all residents.

And while the Douglas case and the DPU’s approval are not unusual, the proceeding is an important example of why Massachusetts must reform utility regulation and how a lack of reform will continue to result in business-as-usual outcomes that work in the interest of the fossil fuel industry.

Acadia Center’s RESPECT proposal seeks avoid these business-as-usual outcomes by reforming how long-term distribution planning is done. RESPECT proposes two key reforms to break down planning silos planning and reduce the financial conflicts of interest inherent to utility planning today. First, states should conduct comprehensive and independent energy system planning that incorporates more meaningful stakeholder input. Second, states should create neutral, statewide Planning Entities that can facilitate long-term planning and separate the entity that does the planning from the entity that owns the infrastructure and therefore has a financial stake in the outcome of the planning decisions.

The Douglas case can help us see how RESPECT reforms would lead to better outcomes. In its request to the DPU, Eversource included a short letter from National Grid (the electricity provider in Douglas) which explained that providing an all-electric solution—an option that would be much more aligned with the state’s climate goals—would require system upgrades that would take two to five years to complete.

Stakeholders, including the Attorney General’s Office, questioned the information provided by National Grid and expressed concerns that the underlying data and analysis was not made public. When asked about specifics of the electrification study that National Grid conducted, Eversource claimed that it “has no information to impart on the electric distribution service requirements” because it “is not the electric distribution service provider for the Town of Douglas.” (DPU 22-107, AG-1-5).

RESPECT attempts to break down exactly these types of planning silos. Under business-as-usual, in which gas and electric utilities are not required to fully coordinate on long-term planning efforts, problems like a two-to-five-year time horizon for electrification upgrades will not become apparent until a utility requests approval for new fossil infrastructure. By that time, as we’ve seen with Douglas, it will be easy for a utility to claim that electrification upgrades will take too long, and because the town need gas service now, the DPU should approve the new fossil infrastructure.

Successful implementation of RESPECT reforms would help to avoid scenarios where fossil fuel interests continue to win out over cleaner alternatives. RESPECT reforms would also enable greater transparency and access for stakeholders that are traditionally excluded from the planning process and would ensure that long-term planning prioritizes equity, environmental justice, and greenhouse gas emission reductions in addition to safety and reliability.

Acadia Center is working to implement utility planning reforms in Massachusetts through legislation and is hopeful that such reforms can help stakeholders, regulators, and utilities reimagine what is possible for the Commonwealth’s energy future.

For more information: 

Kyle Murray, kmurray@acadiacenter.org,  617-742-0054 ext. 106 

Oliver Tully, otully@acadiacenter.org, 860.246.7121 ext. 202

Acadia Center’s Impact in Eversource’s Rate Docket, DPU 22-22

On Wednesday, December 2, the Department of Public Utilities issued a ruling in DPU Docket 22-22, allowing Eversource to increase base distribution rates for electric service and approving a proposed Performance-Based Ratemaking (PBR) plan with a few changes championed by Acadia Center and other intervenors. 

During the process and in its brief, Acadia Center argued that Eversource’s PBR plan should be approved, though with several significant alterations. Below represents Eversource’s petition, what Acadia Center asked for in modifications, and what was approved by the Department. 

Negative X Factor – Rejected 

Eversource: A productivity factor is an accounting tool that attempts to measure the difference in the expected growth rates of an electric utility’s productivity compared to the overall economy. Eversource’s last rate case in 2018 resulted in the DPU approving, for the first time in the country, a negative productivity factor, which added over $135M in automatic rate hikes with no strings attached over the last 4 years. As part of this year’s rate case, Eversource again sought a negative productivity factor, -1.45 percent. The company initially claimed that without the negative X-factor, the company would need to come in for rate cases more often than once every 5 years, driving up transaction costs. 

Acadia Center:  As we did in the last rate case, Acadia Center asked the Department to reject the use of a negative X-factor, noting that Eversource’s proposed solution did nothing to address the underlying problem that the utility was becoming less productive every year. We noted that Eversource has received annual revenue increases under this plan of between 2.97% and 3.55%, totaling $135 million, and that a negative X-factor is unprecedented in the United States outside of Massachusetts. Acadia Center contends that a negative X-factor can result in an increase in revenues for the utility without creating a real incentive to improve performance overall or to deliver better outcomes for customers. 

DPU: The Department got rid of the negative X-factor – in a way. It approved an X-factor of zero, as Eversource relented to in rebuttal testimony, despite them stating in the same testimony that an X-factor set at zero would result in an unworkable PBR plan. As part of this compromise, the DPU approved other factors that will be advantageous to Eversource. 

Length of PBR Term – Shortened 

Eversource: After its 2018-2023 PBR plan, Eversource sought a ten-year investment plan, arguing that it would give them enough time to achieve its goals and to provide certainty needed to follow through with medium- and long-term strategic business decisions.  

Acadia Center: Acadia Center asked the Department to approve a five-year PBR plan, as had been approved by the Department in the past, particularly in situations where a company is expected to undergo substantial capital investments. Additionally, given the fast changing nature of energy, the assumptions that all parties make today are unlikely to be true in 10 years, and it is better for all to be able to revisit these issues in 5 years. 

DPU: The Department appeared to agree with Acadia Center’s arguments, ruling for a five-year term instead of ten. The Department noted that the substantial capital investments that Eversource is planning on undertaking, such as critical infrastructure projects and other investments necessary to comply with legislative and administration policy initiatives, were more in line with a five-year term. It determined that a five-year term would allow for the resources and flexibility necessary for Eversource to adjust its operations and investments efficiently, and, in turn, best ensure ratepayer benefits of increased operational efficiencies and improved service, and the opportunity for avoided administrative costs. The DPU also said Eversource could file a request to continue the PBR plan for another five years when this one ends. 

Return on Equity (ROE) – Lowered 

Eversource: An ROE represents the cap on what a utility can try to earn on its investments. Eversource sought an ROE of 10.5 percent, claiming it was needed to cover a revenue deficiency of $89 million. 

Acadia Center: Acadia Center noted that a 10.5 percent ROE would be wildly out of step with ROE’s approved in the region for utilities in similar situation and asked the Department to approve no higher than a 9.25 percent ROE.  

DPU: The DPU, for a number of complex reasons, chose to effectively split the difference and approve an ROE of 9.8 percent. They noted that this was within a reasonable range of rates that would preserve Eversource’s financial integrity, would allow it to attract capital on reasonable terms and for the proper discharge of its public duties, and would be comparable to earnings of companies of similar risk. In approving an ROE of 9.8%, not only did the DPU approve an ROE lower than what was requested, it approved an ROE that was lower than Eversource’s current ROE of 10%.

Stakeholder Engagement – Required  

Acadia Center also advocated for better stakeholder processes and input going forward, noting deficiencies in the process in this docket and with PBR metrics. The DPU also noted deficiencies in the proposed PBR metrics and ordered refinements to be conducted through an inclusive stakeholder process over the course of the PBR plan. The Department then set out specifics for that stakeholder process, such as requiring reports on the number of stakeholder meetings held and lists of stakeholders that participate. Acadia Center thinks that the forthcoming Grid Modernization Advisory Council, a stakeholder body established by the 2022 climate bill to provide to grid modernization and planning like what the EEAC has done for efficiency, might be a good venue to handle development of the metrics for PBR, as well as grid modernization. 

For more information: 

Kyle Murray, kmurray@acadiacenter.org,  617-742-0054 ext. 106 

Massachusetts Clean Heat Commission Report Delivers a Bold Vision for a Decarbonized Future

The much-anticipated Massachusetts Clean Heat Commission (CHC) report dropped yesterday and was a breath of fresh air. Despite the Commission’s composition with fossil fuel and business-focused Commissioners outnumbering consumer and environmental advocates, they have delivered a strong proposal for real progress on decarbonization. Acadia Center staff are thrilled to engage with the incoming administration on how to implement the recommendations of this report and excited for the potential impact on the Commonwealth and the clean energy future we strive to achieve.

Among the best parts:

• Finally Saying the Future is Electric: Despite not mentioning the DPU 20-80 “Future of Gas” docket or the gas utility business model at all, the report directly identifies that “[t]he Commonwealth’s long-term building decarbonization strategy requires transitioning customers from existing pipeline gas infrastructure to electric infrastructure and, where appropriate given technical and financial feasibility, networked geothermal districts.”
• Identifying the Need for Joint Energy System Planning: The CHC proposes that the Governor and Legislature direct the DPU and DOER to conduct statewide joint energy system planning across Massachusetts’ gas and electric utilities and municipal gas and electric companies and in conjunction with key stakeholders and communities. In other words, “agencies, go do RESPECT – Acadia Center’s framework to modernize energy planning.”
• Embedding Equity, Engagement, and Representation in Decision-Making: Centering equity, engagement, and representation in all aspects of our Commonwealth’s building decarbonization principles and practices is critical to ensuring that no ratepayer is left behind. The report recommends that these core principles inform the design of all programs and policies. Acadia Center wholeheartedly agrees.
• Focusing on Institutional Coordination and Alignment: As Acadia Center has been arguing across the region for years, our climate goals are only as strong as the agencies empowered (or not) to implement them. Without buy-in from every entity across our state government, we will not be able to achieve our net zero requirements. The CHC’s recommendation for cross-cutting coordination will be critical to the Commonwealth’s success.
• Ending Investment in New Gas Infrastructure: The report echoes what Acadia Center and other climate champions have been highlighting about natural gas infrastructure in a bold and powerful statement. “Investments that would support new or increased natural gas infrastructure or capacity should instead be deployed to advance measures that help support the net zero future.”
• Considering New Ideas Like a Clean Heat Standard: Although details on the specifics of the proposed Clean Heat Standard (CHS) remain sparse, if properly designed, the CHS could serve as another valuable policy tool for cost-effectively electrifying and improving the efficiency of buildings in the Commonwealth without driving up costs to electric ratepayers. The details of how biofuels and hydrogen are treated in the CHS will be of critical importance and Acadia Center is looking forward to engaging on this topic as the details of the CHS get fleshed out.
• Being More Realistic About the Decarbonization Potential of Alternative Fuels: Unlike the DPU 20-80 “Future of Gas” analysis – that completely ignored lifecycle emissions from biofuels – the CHC is clear about the need for a science-based, full lifecycle analysis of various biofuels to determine their carbon intensity. This is an essential step for determining whether supporting the use of specific biofuels in buildings via policy makes sense. The report also highlights that alternative fuels are “…not a long-term solution for most of Massachusetts’ building stock.”
• Creating One-Stop Shopping for Climate-Positive Projects: Acadia Center agrees that Mass Save could use some reforms and that the whole suite of building decarbonization programs should get pulled together under an umbrella that provides a single point of contact for consumers. But the devil is in the details on the Building Decarbonization Clearinghouse, and we would hate to lose the transparency and stakeholder leadership brought about through the Massachusetts Energy Efficiency Advisory Council (EEAC). We are excited to get to work on this issue further and have a lot to say about it.
• Expanding Building Benchmarking: Acadia Center has supported DOER’s work to expand building labeling and energy scorecards for years and continues to think it is one of the best ways to demonstrate the value of decarbonized buildings to owners and renters. The CHC’s recommendation to expand existing energy labeling programs to cover buildings under 20,000 feet is critical for driving rapid deployment of energy efficiency in residential and smaller commercial buildings.
• Funding the Transition with New Resources: The CHC recognizes that ratepayer funds, payments from regulated suppliers, and market-based funds may not be enough to finance the decarbonization of buildings that we need. Although the discussion of using taxpayer funds focuses on effective use of federal funds, rather than opening the state coffers, we appreciate the willingness of the Commission to think creatively about how we’re going to pay for this. The Climate Bank, too, has the potential to inject needed finance dollars into this cause.
• Creating Strategies for Decarbonizing the Affordable Housing Sector: Creating strategies for decarbonizing affordable housing represents an incredible opportunity for the next administration…or a potential for major failure if not properly centered. We simply cannot afford to leave our LMI households and environmental justice (EJ) populations behind, and the CHC astutely recognizes that fact.
• Additional Ideas Worthy of Merit:
  o Workforce Training and Education
  o Research and Development
  o Public Outreach and Awareness
  o Expanding Green Communities and Leading by Example
  o Electric Operating Cost Reductions

Though this report represents exactly the kind of bold thinking necessary to drive Massachusetts toward its decarbonization requirements, some difficult questions are omitted, and others require additional detail. Acadia Center will tackle those in a separate piece.

Overall, the Massachusetts Commission on Clean Heat produced a visionary set of recommendations that show impressive foresight. Members of the Commission should be proud of their work, and we laud the administration for its dedication and output under an extremely tight deadline.

For more information:
Kyle Murray
Senior Advocate and Massachusetts Program Director
kmurray@acadiacenter.org
617-742-0054 ext. 106