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

With a $400 million infusion, Massachusetts shifts transition to electric vehicles into drive

In a move hailed as a major step in the state’s climate battle, Massachusetts has approved a $400 million plan to install tens of thousands of electric vehicle chargers as part of an effort to encourage larger numbers of drivers to switch from gas cars to electric.

The order from the state’s Department of Public Utilities, issued last week, allows electric utilities Eversource, National Grid, and Unitil to put a surcharge on ratepayers’ electricity bills to support the build-out of needed infrastructure. Under the plan, the utilities over the next four years will upgrade and lay wires to support chargers and offer rebates to individuals and businesses looking to install them at homes, apartment buildings, workplaces, and public locations like retail parking lots. The plan reserves money for charging hubs in poor and minority neighborhoods, as well as for marketing the rebates.

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Amy Boyd, vice president of climate and clean energy policy for Acadia Center, a clean-energy advocacy group, said she was glad to see the order, but said she would rather “have it be more of a strategic, government-led, undertaking, as opposed to industry-led.” That would allow for the planning process to take into account the bigger climate picture, she said, like whether to co-locate solar or battery storage along with chargers, or to think about upgrading transformers at the same time to facilitate increased energy demands from the electrification of heating.

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Read the full article in The Boston Globe here.

Advocates say Massachusetts clean heat policy needs focus on heat pumps, equity

Massachusetts climate advocates say a clean heat standard proposed by state officials could fail to create meaningful progress toward decarbonization if it overvalues alternative fuels and doesn’t prioritize equity.

“The devil is in the details,” said Amy Boyd, vice president of climate and clean energy policy at the nonprofit Acadia Center, one of several environmental groups closely following the developing state policy.

In January 2022, then-Gov. Charlie Baker convened a Clean Heat Commission to develop strategies for decarbonizing the state’s building sector, which accounts for about 40% of its total emissions. Among its final recommendations released in November was the adoption of a clean heat performance standard.

The policy would create a system similar to a renewable portfolio standard but for heat instead of electricity. Heating fuel suppliers would be required to contribute to clean heat projects, likely by buying credits generated from activities such as heat pump installations and weatherization improvements. Over time, the amount of clean heat credits required would increase.

Read the full article at Energy News Network here.

The winter energy crunch, what it costs, and what it will take to fix it

Connecticut’s first-ever Comprehensive Energy Strategy, released 10 years ago, was built around natural gas. Gas was cheap, plentiful and cleaner than oil or coal. It was touted as a bridge from those fuels to renewables for electric power, and better than oil for heating. The CES set out to convert hundreds of thousands of homes to gas heat.

But that strategy came with a big red flag, now all too familiar.

“The interstate pipeline system that supplies Connecticut’s natural gas is already constrained, and there is limited liquified natural gas (LNG) capacity in Connecticut. At current use rates, there will not be enough interstate pipeline, storage, or peaking capacity to serve a large-scale addition of new customers,” the CES said. “Underestimating and purchasing too little capacity could lead to reliability issues (i.e., a shortfall in supply during peak winter season).”

And that is precisely what happened. Ten years later we are facing another winter of price-spiking, hand-wringing and finger-pointing over the current shortfall.

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“Because this is an urgent situation now that we haven’t resolved in the past decade, we need all of the parties to come to the table. And we need the federal government, ISO New England and the New England states to work cooperatively to craft a set of solutions that can keep the lights on,” Birchard, formerly of Acadia Center said. “Those solutions have to start with clean energy.”

She singled out demand response, which alters the power need through systems such as control of thermostats, lighting, industrial processes and even the number of elevators that are operating in buildings.

“They don’t require the huge transmission lines. They don’t require the huge infrastructure and time processes that some other types of investments do,” Birchard said.

And there’s storage that allows for collection of excess power. Eversource fired up it first storage project a few months ago – 25 megawatts of battery capacity in Provincetown.

“We had three or four outages this summer,” Nolan said. “11,000 customers never knew we had an outage. It rolls right through it with that battery.”

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Read the full article in CT Mirror here. 

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

Gov.-elect Healey taps EPA’s Melissa Hoffer as state’s first climate chief

Gov.-elect Maura Healey announced Monday that she’ll appoint Melissa Hoffer to become the state’s first “climate chief.” Hoffer currently serves as the U.S. Environmental Protection Agency’s principal deputy general.

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“Melissa Hoffer has an incredible track record as a fierce climate advocate,” said Kyle Murray, the Acadia Center’s Massachusetts senior policy advocate. “She has proven again and again that she has what it takes to both listen and lead, and she knows the urgency of the climate crisis. I am confident that she will hit the ground running immediately and help guide our Commonwealth toward our decarbonization goals.”

Read the full article in WBUR News here. 

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

Scientific journal investigating UMass hydrogen study after revelations of gas industry influence

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Beyond that, many experts say there simply isn’t enough of either gas available to feasibly heat homes.

A report by National Grid found there is ample renewable natural gas in the Eastern United States, but Ben Butterworth, the director of climate, energy and equity analysis at the clean energy advocacy organization Acadia Center, said he has not seen any independent research supporting that conclusion. Studies including a 2021 Princeton report called “Net Zero America” have found that similar supply issues face green hydrogen, because producing it at scale requires so much wind or solar power.

“It makes absolutely no sense that we would be talking about using this for residential and commercial uses,” he said.

Read the full article in The Boston Globe here. 

RGGI 58th Auction, 2022 in Review, and the Consequence for Climate and Clean Energy Transition

Media Contacts: 

Ben Butterworth, Director: Climate, Energy, and Equity Analysis
bbutterworth@acadiacenter.org, 617-742-0054 x111 

Paola Moncada Tamayo, Policy Analyst
ptamayo@acadiacenter.org, 860-246-7121 x204 

BOSTON, MA- On Wednesday, December 7th, the eleven states participating in the Regional Greenhouse Gas Initiative (RGGI) released the results of the 58th and final auction for 2022. Emissions allowances were sold for $12.99 each, generating $288 million for clean energy investments in participating states. The allowance price for the RGGI program is the lowest in 2022 but remains well above the historical average. The Cost Containment Reserve (“CCR”) Trigger Price of $13.91 per ton of CO2 was avoided, so no CCR allowances were sold in the auction. Both the proceeds from sales of allowances and the clearing price for this 58th auction ranked among the top five highest in the history of RGGI. 

Higher RGGI allowance price is good for climate, clean energy investment  

The clearing price represents the price that power plant operators must pay for each ton of CO2 emitted by their fossil-fuel-fired plants. The auction clearing price of $12.99 represents a modest 3% decrease from the previous auction in August, but, in total, the average 2022 auction price was 42% higher than the average 2021 auction price. The higher allowance prices seen in 2022 mean the RGGI program is sending a stronger incentive to produce electricity from carbon-free sources, like wind and solar. Recent auctions have demonstrated the growing significance of the CCR – the auctions in 2022 have all narrowly avoided the CCR trigger price, while the 54th auction in December 2021 represented the first time since 2015 that additional allowances were released because of triggering the CCR.  

Since the program launched, the vast majority of RGGI proceeds have been invested in energy efficiency and clean energy projects as detailed in the most recent report on RGGI investments in 2020, released in May of this year. The $288 million in proceeds generated in this auction brings the annual to-date total to $1.19 billion, which is 29% higher than the total proceeds of 2021’s record-setting total proceeds. Auction proceeds have increased dramatically in recent years.  

For example, the auction proceeds of 2022 so far are 128% higher than the total proceeds generated in all 2018 and 2019 auctions combined. This is great news for climate action, the economy, and the growing workforce in energy efficiency and clean energy.  

RGGI Third Program Review Offers an Opportunity to Direct Proceeds Towards Clean Energy Investments that Directly Benefit Environmental Justice Communities  

Since its establishment, RGGI’s priorities have centered around reducing pollution from fossil fuel power plants and achieving climate solutions for RGGI states. Every five years or so, RGGI undergoes a program review, giving the participating states the opportunity to consider the program’s performance and make various changes including the equitable disbursement of the program’s proceeds. RGGI’s Third Program Review is happening now. According to their recent Program Review Update, RGGI Inc. will be holding public meetings soliciting comments and engaging with Environmental Justice communities throughout Spring and Summer of 2023. 

As discussed in more detail in Acadia Center’s blog post The Third RGGI Program Review Should Advance Equitable Investments and Climate Goals. The Third Program review offers a good opportunity to ensure that environmental justice communities are heard and are actively involved in the development of strategies to ensure a smooth, equitable transition to a carbon-free economy. This ongoing program review provides a chance for states to consider the recent auctions, history of investments across the states, the need to directly address environmental justice communities, and other mechanisms associated with the cap-and-invest program.  

Acadia Center remains closely involved in RGGI policy conversations across the RGGI states and will continue to advocate for program reforms that drive equitable investment and climate action.   

Acadia Center is a northeast-based nonprofit research and advocacy organization advancing a safe climate and a clean energy future that benefits everyone.

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