Connecticut Legislative Update

When the final gavel came down in Hartford on May 4, Connecticut passed historic climate legislation. After 3 years of mediocre to dismal results striving to fight greenhouse gas emissions from transportation and buildings the passage of the Connecticut Clean Air Act was itself a breath of fresh air.  

People from all walks of life came together to make this happen.  True, it took some time, but over the last 2 to 3 years this broad-based human effort has been building, restructuring, changing and growing.  One of the reasons for this success was the comprehensive policy known as the Transportation Climate Initiative (TCI).  But TCI went up in flames in 2021, so how could it be responsible for Connecticut’s success this year?   

The people. The people fought to refine the transportation message. They revamped the Transportation Climate Coalition and worked toward tackling emissions. Advocates talked in plain language, and put equity into every message, not as an afterthought or an add-on but as a central framework of all our goals. What was the message that resonated and finally got the attention of legislators?   Climate change is real. Entire communities are becoming permanently sick. Our children can’t get to school safely.  We are unable to afford clean transportation options. Finally, the people were heard, and decision-makers responded. 

 SB 4 – The Connecticut Clean Air Act – was passed. It includes: 

  • Electrification transit buses 
  • Phasing out of diesel school buses for environmental justice communities by 2030, 100% zero-emission and alternative fuel for the state in 2035 and 100% zero-emission by 2040 for the state. 
  • Electric Vehicle rebates: focused on low- and- middle income residents 
  • E- Bike rebates: minimum of $500 for up to $3000 bike 
  • Implementation of the California emission standards on medium-and -heavy duty vehicles 

SB 4 gives Connecticut’s Department of Energy and Environmental Protection (DEEP) the authority to move forward with medium- and heavy-duty vehicle regulations adopted by a growing number of states from coast to coast, including California, Massachusetts, New Jersey, New York, Oregon, and Washington. This will allow the state to proceed with adoption of various life-saving regulations that address nitrogen oxide (NOx) pollution and would put more zero-emission trucks on the road, including the Advanced Clean Trucks rule and the Heavy- Duty Omnibus rule.  

These rules will deliver clean air by deploying more electric trucks and by slashing pollution from diesel trucks currently on the roads. The bill also invests in and transitions the state fleet, transit buses, and school buses to electric, introduces consumer e-bike rebates, and expands access to electric vehicle charging. 

This bill encompassed many of the goals of TCI and boldly put equity front and center.  The coalition of people brought together 2 to 3 years ago reached back into the communities and said, “join us now, together we can do this.” And the people did.  Real momentum built and the legislative champions were emboldened.  People started to see the path forward. Decision makers were out of the building riding e- bikes and driving EVs.  How does this make a difference? Because talking directly to each other…. on the grass, outside the halls for the capital, creates an environment where all are heard and everyone was learning and listening.  The time for meaningful climate change policy was within reach. 

Acadia Center is proud and honored to have helped create this victory in Connecticut.  Acadia Center uses our data and research to make the case for good policies to be passed. The case is made with modeling, analysis, research, and dissemination of important and compelling reports to decision-makers who can vote to change the status quo. The community, advocates, and legislators worked together to make a difference.    

Other significant legislation that passed the 2022 session  

Bills Transmitted to the Governor

 

 

 

 

Study lays out options for New England grid operator to help cut emissions

The regional electric grid operator for New England is beginning to study how it could play a new role in cutting power sector emissions.

ISO New England oversees the electric grid for the six-state region, coordinating the real-time flow of electricity as well as operating longer-term markets to make sure an adequate supply of generation is being built.

Traditionally, as with other regional grid operators, its top concerns have been reliability and affordability: making sure it always has enough power to keep the lights on at the lowest possible price.

In recent years, though, many states have adopted a third priority: reducing emissions. Critics say grid operators have been slow to respond, and that their policies have become barriers to states’ climate goals by prioritizing conventional power plants over emerging clean energy resources.

ISO-NE’s recent Pathways study, released in February, lays out four possible frameworks for how the grid operator might integrate clean energy into the grid. They include continuing the status quo, creating a new clean energy market, implementing carbon pricing, and a hybrid scenario.

Advocates say the report is a pivotal — if long overdue — step toward decarbonizing the region’s power supply.

“To date, the ISO’s market designs have been holding back the region,” said Melissa Birchard, director of clean energy and grid reform at environmental advocacy group the Acadia Center. “This study is a first step to changing that.”

Goals and barriers

The New England states have generally set ambitious goals for reducing greenhouse gas emissions. Five of the states have decarbonization mandates that aim to eliminate all or most carbon dioxide emissions by 2040 or 2050. New Hampshire has called for a reduction of 80% by 2050, though this target is not enshrined in law.

To reach these targets, each state has its own combination of incentive programs, regulations, and energy procurement strategies. Connecticut, Massachusetts, and Rhode Island have all committed to significant offshore wind energy procurements, and Massachusetts’ solar incentive program is designed to bring 3,200 megawatts of renewable energy online.

It is widely believed, however, that the actions of individual states will not be enough to achieve the needed carbon reductions across the entire regional grid.

“To meet the decarbonization goals at the state level requires such a monumental shift of capital and investments,” said Dan Dolan, president of the New England Power Generators Association. The current course, he said, “is probably unsustainable.”

For many years, renewable energy supporters, climate activists, and state leaders have contended that the way ISO-NE pursues its goals has created barriers to decarbonizing the grid. For example, the organization’s minimum offer price rule — set to end in 2024 — has made it financially challenging for renewable resources to participate in capacity markets, advocates argue.

“It’s hard for the states to make progress when the ISO’s markets are putting up barriers,” Birchard said.

Four paths forward

The Pathways study is an attempt to begin investigating ways ISO-NE might in fact help drive the decarbonization of the grid over the coming decades.

“It’s asking, ‘What types of wholesale market designs might best help the region get to where it wants to go?’” said ISO-NE spokesperson Matthew Kakley.

The study, conducted by Boston-based economics consulting firm The Analysis Group, lays out four scenarios:

  • Continuing the status quo, in which individual states choose their own policies and enter into long-term contracts with renewable energy suppliers to achieve their targets.
  • Creating a forward clean energy market, a centralized market that compensates clean energy resources for committing to supply power at a future date.
  • Implementing a carbon price, which would require generators to pay for their carbon emissions and then return the money generated to energy consumers.
  • A hybrid scenario combining a forward clean energy market for new non-emitting resources with a carbon price for existing generators.

The study returned a broad-level look at the potential advantages and disadvantages of each scenario. A net carbon price would likely reduce carbon dioxide emissions most cost-effectively, with a forward clean energy market or a hybrid model performing just slightly less effectively. A carbon price and, to a lesser extent, a hybrid approach would also provide incentives for generators to reduce their carbon intensity.

A carbon price, however, would require the highest level of coordination among participating states, while the status quo, in which states operate individually, would naturally require the least coordination.

Now, ISO-NE will be collecting feedback from stakeholders as it determines the next steps forward.

“It’s really intended to be the foundation for broad discussions,” Kakley said.

States to play a key role

Some of the interested parties have already declared their preferred path forward. ISO-NE has long advocated for a carbon price, and the New England Power Generators Association has also made clear that this is their preference as well.

“We’re heartened to see that’s the lowest-cost option under the analysis that was done,” Dolan said.

The New England States Committee on Energy, a group representing the six New England states in regional energy matters, has been active in advocating for better ways to decarbonize the grid. In 2020, the group released a vision statement outlining the ways it felt the current ISO-NE markets placed obstacles in the way of clean energy development.

The group has welcomed the Pathways study as a valuable first step and said it will hold off on endorsing a specific option for now. However, it also acknowledges it “is interested in continuing development of [a forward clean energy market], which each state could elect to use to facilitate financing for new clean resources.”

Whatever path is chosen, there is widespread agreement that ISO-NE will need the support and engagement of the states to make the solution work.

“The states are going to play a key role in whatever market mechanism is selected here,” said Phelps Turner, senior attorney with the Conservation Law Foundation. “They’re going to be key participants and their views are critical in selecting and designing which mechanisms go forward.”

However, even as stakeholders embrace the Pathways study, many feel it has taken too long to get to this point. The need to make decisions and take action is only getting more urgent, Turner noted.

“It’s going to take time to design and implement whichever market mechanism or mechanisms the region decides to go with,” he said. “We’re keeping an eye on the clock here.”

Read the full article in Energy News Network here. 

The Climate Minute Podcast: Assembling the puzzle pieces for green and reliable electricity

Melissa Birchard, Senior Regulatory Attorney with Acadia Center participates in The Climate Minute podcast for Mass Climate Action Network. Listen to the episode here.

New England predicted to see nation’s highest wholesale electricity prices this summer

New England is predicted to see the most expensive wholesale electricity prices in the nation this summer, according to a recent report by the U.S. Energy Information Administration.

The region’s mushrooming costs are indicative of the continuous turmoil of today’s energy markets — a combination of COVID economic recovery, inflation and the ongoing war conflict in Ukraine driving up prices for natural gas and oil.

But making matters worse in New England, experts say, is the region’s reliance on natural gas — perhaps the biggest culprit for its highest-in-the-nation designation.

This past winter, New Englanders already saw themselves paying significantly more for electricity and home heating, and summertime is infamous for high bills because of air conditioning and appliance use.

Average summer residential electricity prices in New England could increase close to 16%, the EIA predicts, compared to 4% nationally. The average monthly price that utility companies purchase electricity for — the wholesale price — could be 167% more than last summer. How and when the wholesale increase presents itself on customers’ bills will vary.

“This is not because of hot weather, this is because we are over-reliant on natural gas,” said Melissa Birchard, director of clean energy and grid reform at the Acadia Center, a nonprofit working to recalibrate the Northeast’s energy system. “Natural gas has become very expensive and hard to get after the Russian invasion of Ukraine.”

Because New England produces no natural gas of its own, “we have to get it from somewhere,” Birchard continued. As a result, “New England consumers are paying the price for an over-reliance on this fuel that’s an international commodity subject to price volatility.”

About half of New England’s electricity is currently powered by natural gas, a climate change-contributing fossil fuel that releases greenhouse gas when burned. ISO-New England, the entity that operates the region’s power grid 24/7, has taken heat from advocates working on the energy transition, who claim ISO is making it difficult for renewable energy options to power the grid, and instead, allowing it to remain largely reliant on natural gas.

ISO-New England, however, refutes that claim. Spokesperson Matt Kakley called it “misleading” to point fingers at ISO-New England for the rate increases in question, citing its federal mandate to be fuel and technology-neutral, and delays in clean energy sources, such as wind power, coming online in New England.

Electricity prices are volatile, but more increases in New England not a surprise

In its short-term summer outlook, EIA acknowledges “realized prices can be extremely volatile and average price forecasts can be very uncertain.” But Birchard said the projected increases aren’t a surprise, considering New England’s wholesale electricity prices increased more than 80% in the first three months of 2022.

Citing milder expected temperatures, the EIA is, however, anticipating lower-than-average electricity use this summer, which could offset the soaring prices. For New England, electricity use — or kilowatt hours — could be 5.6% less than last summer, the administration forecasts.

That would be a drastic change from last year, when multiple heat waves gripped parts of the region during the course of the summer. 2021 ultimately became the hottest year on record both in Boston and Providence, Rhode Island.

ISO-New England has cited a developing trend of more “duck curve” days, indicating lower grid demand in the afternoon than overnight. On May 1, ISO said it observed the lowest mark of demand for grid electricity since it began operating the system in 1997 — a combination of “mild temperatures, sunny skies and typically low Sunday demand.”

The grid operator has cited more rooftop solar installations as a leading reason.

“While these changes haven’t happened overnight, a day like May 1 is a good reminder of the progress New England has made in its transition to the future grid,” said Vamsi Chadalavada, ISO-New England’s chief operating officer.

What is the difference between wholesale and retail electricity costs?

Electricity is produced and sold on a wholesale level to energy delivery companies — like Eversource, National Grid and Central Maine Power — and then from there, sold and distributed to individual customers.

Prices vary across the region based on specific utilities and retail distribution. Utility companies operate on different schedules, setting rates based on what low price they’re able to shop from electric suppliers. Rates are then approved by state regulators and the Federal Energy Regulatory Commission.

According to ISO-New England, a consumer’s retail electricity bill reflects the wholesale market price of electricity as a cents/kilowatt hour (kWh) charge, typically shown on a bill as “basic service” or “default service.” That rate is just one piece of a bill. Bills also include charges for delivery and transmission, among other things.

The price of wholesale electricity can change depending on the time of day, season and location in New England, based on factors like price of natural gas and consumer demand. Utility companies typically set rates two or three times per year, abiding by the varying state regulations to protect customers from fluctuations and immediate hikes. Many companies also have long-term contracts in place as a cushion against price volatility.

Wholesale costs ultimately affect individual consumer bills, but there might not be an immediate impact, explained Birchard. But if companies have fuel adjustment clauses in place, that can allow a rate change to occur more quickly.

“Eventually consumers have to pay,” Birchard said, warning about next winter. Though prices will rise, she said individual bills will not see the “same magnitude of the wholesale price elevation.”

The average summer real-time wholesale electricity price for June-August 2021 in the region was $40.22 ($/MWh), according to ISO-New England, during which time the cost of natural gas had more than doubled over the same period in 2020.

Per EIA’s predictions for this summer, New England’s average wholesale electricity price could skyrocket — a 167% increase from last year. EIA is forecasting retail residential electricity customers in the region could see a 16% increase.

William Hinkle, spokesperson for Eversource, New England’s largest energy provider serving Massachusetts, New Hampshire and Connecticut, said the changing costs of demand and global market forces are “directly passed through to customers with no profit to the company.”

Like Birchard, Hinkle cited New England’s “heavy reliance” on natural gas, high demand and rising prices worldwide as driving costs increases locally. Other contributing factors, he said, include previous prices that were at 10-year lows, the war conflict in Ukraine and extreme weather events within the last year that have impacted gas production in states that produce their own natural gas.

Will electricity rates in New England continue to climb?

For National Grid customers in Rhode Island and Massachusetts, summer electricity rates will actually be a reduction from what they were paying before April 1 and May 1, respectively, but an increase over what they paid last summer.

Ted Kresse, spokesperson for National Grid Rhode Island, said they’re anticipating  customers will see a roughly 2% increase compared to summer 2021. National Grid customers in Massachusetts will see closer to 9%. Both supply rates, though, are reductions from what people were paying this winter.

But looking to its Oct. 1 rate change, National Grid is telling its 500,000 customers in Rhode Island to prepare for both residential and commercial rates that haven’t been seen in the state in at least two decades, if ever.

“We’re happy our customers will see some relief on the price of electricity during the upcoming summer months,” said Brian Schuster, director of customer and community management with National Grid Rhode Island. “But… as energy prices remain extremely volatile due to global issues, the outlook for winter electric prices could mean significant rate increases. And while we can’t control the cost of the energy supply, we do want to encourage customers to prepare now for that potential.”

Under the new estimate of 16.8 cents, the residential rate for Rhode Island customers would be more than 50% higher than last winter’s rate, and more than double the current rate that went into effect April 1.

In Maine, state numbers show electricity supply rates have reached the highest levels in at least 10 years. The 2022 supply rate for most Central Maine Power customers went up more than 80%, adding about $30 to the average monthly bill.

The next rate change for Eversource customers in Connecticut and Massachusetts is scheduled for July 1, and Aug. 1 for New Hampshire. The proposed electricity supply rate change for western Massachusetts, for example, is about an 11% increase from the current rate, while the eastern Massachusetts rate is expected to be filed later this month. That’s not a total bill increase, per se, but rather an increase to the supply portion of the bill.

“We know there is never a welcome time for news of higher prices and we work with our customers every day to find payment assistance programs, energy efficiency solutions or other options to help,” said Hinkle.

Eversource customers can use between 25-35% more electricity during hot summer months, Hinkle said. The company encourages customers who are struggling to pay their utility bills to “reach out so that we can help find the best solution for their individual case, even if they have never qualified for or needed assistance before.”

The exorbitant cost of natural gas will persist as long as the Russian invasion of Ukraine does, too, said Birchard, leaving the New England region vulnerable to those price fluctuations. In addition, New England hasn’t taken strides in clean energy alternatives as fast as other regions, she noted.

“In the near term, the region needs to activate demand management tools to reduce costs over the next year,” she said. “During that time, we need to expedite market reforms to reduce our over reliance on natural gas.”

What is ISO-New England’s role?

Birchard asserted that ISO-New England has been “lagging behind.” Five out of six New England states have set strict emissions-based climate goals, and yet, “ISO-New England has made the electric grid increasingly reliant on natural gas rather than accelerating clean energy,” she contended.

“ISO-New England needs to catch up with the states and protect its consumers from these types of (financial) impacts, as well as climate impacts.”

ISO-New England, which is overseen by the Federal Energy Regulatory Commission, is “one part of a regional energy system” that involves state and federal regulators, argued Kakley — a part responsible for administering wholesale energy markets based on federal law.

“When you look at the evolution of the power system over the last 25 years or so, there has been a significant increase of natural gas in New England that has replaced coal, oil and nuclear,” he said. “As we find ourselves looking at the clean energy transition, we’re seeing those older legacy resources retire, but we’re seeing delays on the development and connection of clean energy resources intended to take their place.”

Read the full article in The Providence Journal here. 

Maine Legislative Update

Maine policymakers wrapped up its two-year 130th Legislature in May 2022, completing one of the “most productive environmental and energy legislatures in more than 30 years,” according to one environmental advocate.

During the first year, Acadia Center wrote and championed legislation requiring the Maine Public Utilities Commission to include achieving the state greenhouse gas reduction targets as a primary mission. The bill opened the door for state agencies to take actions that consider equity and environmental justice goals in all state policy, programmatic, and regulatory decisions. Maine implemented key Climate Action Plan goals like eliminating HFCs, promoting offshore wind, setting appliance standards, and increasing weatherization funding; expanded electrification for building heating and transportation; and bills to incentive renewables, energy storage, microgrids, and other non-wires alternatives in Maine’s electricity grid.

With such a successful 2021, we expected 2022 to involve smaller-scale wins – but we had some big ones, too. Legislators passed bills to protect and conserve natural lands and waters and carbon storage opportunities. They enacted legislation to ensure renewable energy project siting is streamlined and transparent and avoids negative impacts to natural resources, including agricultural lands and forests. Policymakers funded climate education for schools, students; and teachers; established a Climate Corp for workforce development and energy projects; mandated carbon neutrality in Maine by 2045; made zoning and land use changes to increase affordable, efficient housing opportunities; set targets for electric vehicle fleet procurement in schools and towns; and provided tax incentives for clean energy projects, such as energy storage and energy-efficient buildings.

Acadia Center and its partners also took the lead on two substantial steps forward toward a clean energy future that benefits everyone.

  1. LD 1959 – An Act Regarding Utility Accountability and Grid Planning for Maine’s Clean Energy Future. Governor Mills introduced this bill in early 2022 to hold Maine’s electric utilities accountable to ratepayers for their performance. For months, Acadia Center worked with the Governor’s Office, legislators, the Public Advocate, environmental groups, and others to improve the bill. Acadia Center introduced language that implements the first half of our RESPECT plan – conducting comprehensive, all-fuels planning through a process involving stakeholder review and transparency. In the end, LD 1959 represents considerable progress in holding utilities accountable and initiating serious integrated grid planning for a reliable, clean, and affordable electricity grid, whether its investor or consumer owned utilities who are distributing the electrons through the wires. In an era of sky-high electricity prices and climate pollution, legislators chose not to leave Augusta without holding the state’s two utility-owned investors, Central Maine Power and Versant, accountable for their future performance and impacts on ratepayers. Instead, they embraced an all-encompassing, long-term, strategic grid planning process to modernize Maine’s electricity and engaging all stakeholders in designing, building, and operating a clean energy grid of the future. This was one of the most significant climate accomplishments of this legislative session.
  2. LD 2018 – An Act to Implement Recommendations Regarding the Incorporation of Equity Considerations in Regulatory Decision Making. This bill was a direct result of Acadia Center’s 2021 bill requiring the Governor’s Office to evaluate equity considerations in state-government decision making. It makes PUC proceedings more accessible to Maine people and requires the PUC to develop an environmental justice plan; requires the DEP to adopt rules establishing procedures to ensure that persons in environmental justice populations and frontline communities are provided with fair and equitable access to the department’s decision-making processes; and establishes definitions for “environmental justice,” “frontline communities” and related terminology. LD 2018 moves Maine forward in its commitment to environmental justice and a clean and safe carbon-neutral economy that benefits all people.

Acadia Center is already looking forward to 2023 and hopes to keep pushing to make this decade count for utility business model innovation, clean transportation, clean heating and next generation energy efficiency, grid modernization and transmission, offshore wind, and more.

More energy storage is needed to support wind and solar power, MIT study finds

A new report released Monday by researchers at MIT finds that it’s technologically and financially feasible to use energy storage systems, such as massive batteries or hydroelectricity, to almost completely eliminate the need for fossil fuels to operate regional power grids.

Such systems are becoming in greater demand in New England, and beyond, as more renewable energy powers homes and businesses and they require ways to keep the lights on when the sun isn’t shining or the wind isn’t blowing.

“Our study finds that energy storage can help [renewable energy]-dominated electricity systems balance electricity supply and demand while maintaining reliability in a cost-effective manner,” said Robert Armstrong, director of the MIT Energy Initiative, which commissioned the three-year study.

The authors of the report estimated that the costs of transforming power grids in the Northeast, Southeast, and Texas will range between 21 percent and 36 percent higher than if nothing was done to promote storage-backed renewable energy. The costs will be higher in the Northeast, where there are greater energy demands in the winter.

But they described those costs as “relatively modest” and noted there would be many hours when the costs of electricity would be near zero. That means future power grids are more likely to enable the low-cost charging of increased numbers of electrical vehicles and homes with electrical heating systems. They will be able to be charged when prices dip.

“These cost increases are relatively modest compared to the costs of not doing anything, and especially compared to the costs of climate change, which is an existential threat,” said Dharik Mallapragada, one of the authors of the report.

As of 2019, New England had 62 megawatts of battery storage capacity, according to a report last year by the US Energy Information Administration. There are numerous projects that have proposed adding some 6,500 megawatts of energy storage to the regional grid, with more than 630 megawatts of new storage capacity slated to become operational by 2025, according to ISO New England, the regional grid operator.

Joe Curtatone, president of the Northeast Clean Energy Council, said the report underscored that storage can be used in many locations. The report noted that many existing fossil fuel plants could be converted into storage facilities.

“That means energy jobs all over our region, and the best part is it’s ready to be deployed now,” he said. “We don’t need to be wasting time or money on archaic projects, like the proposed Peabody peaker plant. We should be building energy storage to cover our peak power needs.”

The Baker administration has authorized the construction of a 55 megawatt fossil fuel plant in Peabody designed to operate on the coldest and hottest days of the year to add power to the grid when needed.

Some who follow the renewable energy industry said there was little new in the report.

“All of their conclusions seem like concepts that are widely agreed upon in the energy wonk realm,” said Kyle Murray, a senior policy advocate at the Acadia Center, an environmental advocacy group in Boston. “We in the energy realm have been stressing for a long time that cost-effective storage is absolutely essential for our renewable energy future.

Read the full article in The Boston Globe here.

D.P.U. 20-80 (Future of Gas)

Back in June of 2020, Attorney General Maura Healey posed the question to the Department of Public Utilities – how does the business model of natural gas distribution utilities (or LDCs, as they’re called in industry parlance) need to change in order to allow the state to meet its climate goals of net zero by 2050?  The resulting proceeding, D.P.U. Docket 20-80, Investigation by the Department of Public Utilities on its own Motion into the role of gas local distribution companies as the Commonwealth achieves its target 2050 climate goals, is also known as the Future of Gas. In the last year, there have been several developments in the docket, including stakeholder input on scenarios and models produced by hired consultants, the LDCs developing Net Zero Enablement Plans based upon those models, and a comment period opened by the D.P.U. on alternative regulatory proposals. Acadia Center has been actively involved since the stakeholder process began in May 2021, and recently submitted comments in response to this request from the Department.

Modeling Issues

Acadia Center found multiple troubling flaws in the Energy and Environmental Economics (E3) analysis that underpinned the LDCs’ regulatory proposals. Ultimately, the LDCs asked the Department to adopt a lot of regulatory changes in line with the Efficient Gas and Hybrid Electrification scenarios that rely heavily on using “renewable” natural gas, hydrogen, and synthetic natural gas in LDC pipelines. But these scenarios that rely heavily on alternative gases are likely to emit far more GHG emissions, cost ratepayers billions more, and be far more difficult to implement than assumed in E3’s study. The difference between E3’s modeling assumptions and the expert consensus on topics including the GHG intensity of RNG, future availability of alternative fuel supplies, and the future cost of alternative fuels is so significant that it calls into question many of the conclusions – and the LDCs’ regulatory proposals to use these fuels in their pipes. Finally, even if RNG, SNG, and hydrogen can feasibly be used to perpetuate use of the LDCs’ systems into the future, as a policy matter, they should not be.

Fundamentally, the transition should center on technologies that we know are safe, effective, and available – in other words, electrification through air- and ground-source heat pumps and geothermal technologies. The Department should not begin to introduce gas alternatives into pipelines that serve consumers’ homes and businesses without substantial additional research into safety and health impacts. This docket is not just about scenarios, regulations, costs, and carbon. It’s also about how the people of the Commonwealth will be kept warm and safe by their government and trusted utilities in 2050 and beyond. We know that the use of methane (either natural gas or RNG) in homes, especially in cooking, is far more harmful to occupants’ health than previously understood. We know that hydrogen is a highly combustible fuel that poses a significant safety risk in the context of residential and commercial buildings. The Department must, as one of its first obligations, keep consumers and the Commonwealth safe. Pursuant to the precautionary principle, it is better to wait until RNG, SNG, and hydrogen technologies’ use indoors are firmly understood before we begin even pilots that allow them to be introduced in pipelines at the concentrations contemplated by the LDCs.

Acadia Center Proposal

As an overarching theme to Acadia Center’s comments, decarbonizing the economy of Massachusetts, and particularly our buildings, is not optional. We cannot fail. Nor can we afford to wait and put off decisions to future generations, especially given the rapid pace of climate change already observable in Massachusetts.  The transition may be expensive – but the cost is insignificant compared to the cost of the climate crisis itself.

This transition will require all players – utilities, regulators, government, businesses, advocates, and customers – to pull together and work towards a common purpose. It requires a strong central authority to keep everyone working together, and not at cross purposes. Acadia Center’s regulatory proposal follows our RESPECT concepts. RESPECT is an idea for utility planning reform that rests upon the idea that states should:

  • 1) conduct independent and comprehensive distribution system planning that incorporates meaningful stakeholder input, including voices that have been ignored to date; and
  • 2) separate “planners” and “owners” by creating a separate, neutral planning entity that is designed to look for solutions beyond utility boundaries and across fuels.

Acadia Center believes that an independent planning authority, responsible for coordinated planning to electrify and decarbonize, would be the best option for the Commonwealth to achieve its ambitious net zero greenhouse gas emissions reduction requirements, and would avoid the problems seen thus far in letting the LDCs propose their own future.

For more information:

Kyle Murray, Senior Policy Advocate-Massachusetts, kmurray@acadiacenter.org 617-742-0054 x106

Connecticut electric vehicle rebate reforms include point-of-sale vouchers

Connecticut’s electric vehicle rebate program is about to undergo an expansion and overhaul, one that will place a higher priority on equity.

The reforms are part of the omnibus Connecticut Clean Air Act approved by lawmakers in the session that ended last week. Gov. Ned Lamont signed the bill into law Tuesday.

The legislation significantly expands funding for the program, called the Connecticut Hydrogen and Electric Automobile Purchase Rebate, or CHEAPR. It currently receives the first $3 million in greenhouse gas reduction fees paid every year on car registrations. As of July 1, all of those fees will be directed to the rebate program, boosting funding by as much as another $5 million annually.

CHEAPR offers rebates of $750 to $2,250 on the purchase of battery-electric vehicles and plug-in hybrid electric vehicles. Higher incentives are available for fuel cell electric vehicles.

Beginning last year, the program began offering an additional rebate of $1,500 to $2,000 to lower-income residents, as determined by their participation in a state or federal income-qualified program. Income-qualified residents are also eligible for rebates on used electric vehicles.

But very few low-income residents have applied, said Barry Kresch, a leader of the EV Club of Connecticut. One barrier is that, unlike the standard rebate, the lower-income incentives are not immediately credited on the invoice at the dealership. Instead, they have to apply for the incentive after the purchase.

“It’s asking a lot to have a lower-income individual float that cash,” Kresch said.

The new legislation is intended to boost uptake among lower-income individuals, partly by expanding eligibility. The program will be required to give the highest priority to residents of environmental justice communities, residents with incomes at or below 300% of the federal poverty level, and residents who participate in state or federal assistance programs, including the Operation Fuel energy assistance program.

It also allows for vouchers, which could better serve low- to moderate-income drivers, said Will Healey, a spokesperson for the Department of Energy and Environmental Protection, or DEEP.

“Think of a voucher as a coupon,” he said. “A voucher can be applied upfront to reduce the purchase price at the point of sale.”

DEEP will also use some of the additional funding to expand outreach and marketing to lower-income residents, Healey said.

DEEP will now be the governing authority over the program. The current governing board, established in 2020, will instead serve in an advisory capacity.

Amy McLean, Connecticut director for the Acadia Center and a CHEAPR board member, said that while she has some concerns around the board’s loss of control, at the same time, the board was not always very good at moving forward.

“We had a hard time getting quorum, and so then we couldn’t make decisions as a result,” she said. “Before this legislation was put into place, I talked with DEEP and they expressed frustration with that.”

McLean said she views it as a “positive move” overall, given that the legislation also expands the board from six to 10 appointed members representing a wider swath of stakeholders.

Another key change is that municipalities, businesses, nonprofits and tribal entities will now be eligible for rebates. Any one entity may receive up to 10 rebates annually, up to an overall total of 20.

And finally, rebates of at least $500 will be available for the purchase of e-bikes, something environmental advocates have pushed for as a matter of equity. DEEP will establish income qualifications for the rebate, which only applies to bikes that cost $3,000 or less.

“We had a very successful event at the State Capitol in April where there were bikes for legislators to try,” said McLean, an avid e-bike rider herself. “The idea was to dispel the idea that these things are just for fun. They are fun, but they are also transportation.”

Prices on e-bikes have risen in the past couple of years due to higher shipping costs from China and general inflation, said Chris Zane, the owner of Zane’s Cycles in Branford. So a $500 rebate will basically just take the inflation out of the price, as what used to be a $1,600 bike is now closer to $2,300, he said.

“But on the other hand, it doesn’t cost anything to run,” he said. “If you have a car and you’re filling it with gas, and you can use your e-bike for half of those miles, you’re not spending $30 a week on gas. You could easily be in the black within a year or two.”

Over the 12-month period ending April 1, CHEAPR distributed roughly 1,300 rebates totaling about $1.5 million, according to the CHEAPR statistics page. More than half of purchasers bought a Toyota Rav4 Prime or a Toyota Prius Prime, both plug-in hybrids.

Tesla used to hold the number-one slot for rebates, but the automaker raised base prices for the Model 3 and Model Y above the program’s $42,000 cap, making them ineligible, Kresch said.  The new legislation boosts the cap to $50,000.

Read the full article in Energy News Network here.

What’s the state of climate change legislation in the Commonwealth of Massachusetts?

Where we are now

Massachusetts has long positioned itself as a leader in the fight against climate change, with country-leading programs in energy efficiency and ambitious net-zero greenhouse gas reduction targets set in landmark legislation that passed in 2021. But with the climate crisis accelerating, Massachusetts can’t just rest on its laurels. The Massachusetts Senate and House of Representatives have each passed climate bills with differing proposals to tackle the crisis, ranging from large investments in offshore wind to enhanced rebates for electric vehicles. This blog will highlight what was in both packages and what steps need to happen before July 31st, the end of formal sessions for the legislature.

The House climate package largely focused broadly on offshore wind. The bill did not increase procurement authorization for the Commonwealth, instead aiming to develop the industry. This legislation:

  • Creates the Massachusetts Offshore Wind Industry Investment Trust Fund
  • Requires the development of a Grid Modernization Advisory Council and requires electric distribution companies to develop grid modernization plans and submit them to the council
  • Requires the Department of Energy Resources to solicit and procure proposals for offshore wind transmission and requires the state to collaborate regionally on those procurements

The House Committee proposal was strengthened through the amendment process, delivering better protections on environmental justice, a proposal on fishing mitigation, and an allowance for federal funding for transmission procurement.

The Senate proposal, passed a month later, was significantly broader than the House’s, focusing on the transportation and building sectors in addition to clean energy. The Senate legislation:

  • Transportation
    • Focuses on increasing EV adoption through increasing rebates, creating a stable trust fund, and investing in charging stations
    • Requires electrification of the MBTA bus fleet by 2040
  • Buildings
    • Limits the use of Mass Save funds for new fossil fuel equipment
    • Creates a 10-municiaplity demonstration project allowing all-electric building construction by local option
    • Requires a mandatory adjudicatory process in DPU docket 20-80 (the Future of Gas)
  • Clean power generation
    • Prevents biomass facilities from receiving state clean energy incentives
    • Creates a $100 million Clean Energy Investment Fund,
    • Updates the offshore wind procurement process,
    • Supports solar power

This legislation was also enhanced through the amendment process. Several of the most impactful amendments that were accepted were Acadia Center priorities. These amendments included policies to:

  • Set a floor of 10,000 megawatts of offshore wind by 2035
  • Require utilities to report the total amounts of natural gas and electricity used by each large building in the Commonwealth
  • Require the MBTA to develop short-term, mid-term, and long-term plans for the electrification of all commuter rail lines
  • Requires DEP to install air monitors in 8 pollution hotspots and to set baseline air quality standards in hotspots
  • Require utilities to submit proposals for rate credits or rebates for off-peak charging to supports EV

So what’s next?

Now that each house has passed a different bill, the next step will be the appointment of a Conference Committee. The goal of a Conference Committee is for the two legislative bodies to hash out their differences on policy and come to consensus on a single piece of legislation to send to the Governor to sign. Sometimes the Conference Committees essentially mash up the two disparate policies into one amalgam, resolving minor difference along the way. More often, however, the negotiators will play hardball, trading concession for concession and whittling down the original pieces of legislation. On Thursday, May 5th, the House named House TUE Chair Jeff Roy, along with Representative Tackey Chan and Minority Leader Brad Jones to the Conference Committee. The Senate followed suit quickly, appointing Senate TUE Chair Michael Barrett, along with Senator Cynthia Creem and Minority Leader Bruce Tarr.

Nothing precludes either branch from acting on additional legislation. However, given recent history, with the legislature opting for a single omnibus package over various disparate legislation, it is likely that the final climate package for the 2021-2022 legislative session will largely resemble some of the components of these bills. Therefore, Acadia Center asks that during these negotiations legislators should see these existing policies as top priorities:

  • Development of a Grid Modernization Advisory Council that would give stakeholders a say in the future of the grid
  • Procuring at least 10,000 megawatts of offshore wind by 2035
  • Enhanced Incentives for EVs and investment in charging stations
  • Investment in regional energy transmission procurement
  • Large building energy use reporting
  • Air monitoring and air quality standards

In addition to these policies that were in the original legislation, Acadia Center also believes that using ARPA funds to repair health and safety issues in buildings that stop efficiency and electrification and redirecting some EV funds towards transportation mode shifting are essential to meeting our Commonwealth’s ambitious greenhouse gas reduction targets and doing our part to confront the climate crisis.

For more information:

Kyle Murray, Senior Policy Advocate-Massachusetts, kmurray@acadiacenter.org, 617-742-0054, ext. 106

New England grid operator moves to delay reform of rule favoring fossil fuels

A proposal from New England’s grid operator to delay a key reform that would enable more renewable energy sources to bid into the capacity market is prompting a torrent of protests in a proceeding before the Federal Energy Regulatory Commission (FERC).

U.S. Sens. Edward Markey, Elizabeth Warren and Bernie Sanders; the Massachusetts attorney general; the Maine Office of the Public Advocate; the National Caucus of Environmental Legislators; numerous environmental and clean energy organizations; and more than 100 private citizens have all submitted comments asking FERC to reject ISO-New England’s proposal.

“At the very moment when New England should be fully embracing the transition to renewables and the related socioeconomic opportunities, this decision to undermine state actions and renewable energy deployment is a terrible and ill-timed mistake,” the senators said in their mutually signed letter.

“It should come as no surprise,” they added, “that three New England natural gas plant operators developed what became the ISO-New England proposal.”

The expressions of outrage follow what critics say was a last-minute flip-flop in ISO-New England’s position on what’s called the minimum offer price rule, commonly referred to as the MOPR (pronounced moper).

The MOPR sets an artificial bidding price floor for each type of state-supported clean energy resource in ISO’s annual forward capacity auctions, which secure adequate generating resources for the region three years in advance. It is intended to prevent state-sponsored bidders from offering low bids that could distort the market because they don’t include costs that have been paid for by the state.

The rule negatively impacts many renewable and clean energy resources, which often have state contracts and other subsidies. The MOPR fixes a bidding price floor that is intended to factor in the entire reconstructed cost of each type of clean energy, including any potential support it could receive from the state. That has prevented renewable suppliers from competing in the auctions with older fossil-fuel generators.

In its proposal to FERC, ISO-New England calls for the elimination of the MOPR beginning with the forward capacity auction in 2025.

On the one hand, ISO notes, the MOPR protects investors in other generation resources from being undercut by artificially low bids from subsidized resources. But on the other, it can harm consumers. That’s because state-subsidized renewable projects like solar and offshore wind will be built regardless, meaning consumers will end up paying for additional capacity beyond what ISO selects through the auctions.

“And while there is no evidence that this potential inefficiency has harmed consumers to date,” ISO says in its proposal, “that result is clearly looming.”

So why not eliminate the MOPR immediately, rather than three years from now, ask ISO’s critics. In fact, plans were well underway to eliminate it as of the next forward capacity auction, in March 2023, until ISO suddenly scrapped that idea in favor of a slower alternative put forward by Vistra Energy, Calpine Energy Services and Nautilus Power as part of an eight-month stakeholder discussion.

“It caught everybody by surprise,” said Melissa Birchard, the director of clean energy and grid reform at the Acadia Center, a regional environmental organization that participated in the discussions. “Changing their position at the very last minute gave no one the opportunity to really look into what that meant.”

In its proposal, ISO cited reliability concerns as the primary reason for delaying an end to the MOPR. Immediate elimination could cause other capacity resources to withdraw from the market, as capacity market prices decline, which could create reliability problems if the renewable resources aren’t commercially available, the proposal said.

But Bruce Ho, New England lead for the Sustainable FERC Project, housed at the Natural Resources Defense Council, said ISO has offered little to substantiate that argument.

“We haven’t seen any real analysis from the grid operator that shows that there’s a problem,” he said. “We also need to understand the tradeoffs. Keeping the MOPR in place is going to be very expensive for customers, bad for the environment, and will keep a dirtier grid in place than the New England states are calling for.”

The Massachusetts attorney general and the Maine consumer advocate have another theory: “ISO-New England’s sudden adoption of the transition mechanism must be viewed for what it is: an attempt to disincent legal challenges to MOPR reform by fossil fuel generators.”

Instead of prioritizing reducing consumer cost and system overbuild, the authorities said in their joint comments, ISO has signaled that “protecting capacity market revenues for incumbent generators is paramount.”

The proposal does include an exemption for a total of 700 megawatts of state-sponsored renewable capacity in the next two auctions. But that’s “not at all sufficient, especially given the amount of offshore wind coming online,” said Susannah Hatch, the regional lead for the New England for Offshore Wind coalition.

Connecticut, Massachusetts and Rhode Island have set targets for more than 8,000 megawatts of offshore wind by 2030. More than 4,700 megawatts are already under contract, she said.

FERC must make its decision in accordance with the Federal Power Act, which authorizes the commission to reject a tariff proposal only if it determines it isn’t “just and reasonable” and unduly discriminatory. A decision is expected by the end of May.

Choice limited to slow or no transition

The issue of how and when to open the capacity markets to more state-sponsored renewable resources has become increasingly contentious in recent years as most New England states have ramped up their clean energy goals. Connecticut Department of Energy and Environmental Protection Commissioner Katie Dykes has been particularly vocal in her criticism, at one point threatening that the state would pull out of the ISO marketplace altogether if reforms aren’t made.

With pressure growing, ISO announced last May that it was going to work with the New England Power Pool, a FERC-approved stakeholder advisory group with more than 500 members, to eliminate the MOPR.

“We had about eight months of in-depth discussions, negotiations, presentations, and analyses all focused on getting rid of the MOPR by next year,” Ho said.

During that process, the generation companies proposed an amendment to delay elimination.

“The owners of fossil fuel generation were not happy about the proposed changes to the MOPR and were in opposition throughout the process,” Ho said. “There was a sense that if they didn’t get what they wanted, they would likely challenge it.”

But their proposal was not received positively. On Jan. 11, 2022, NEPOOL’s Markets Committee voted to approve ISO’s draft proposal to eliminate the MOPR as of 2023, with 74% in favor, according to the Massachusetts attorney general’s account. The power generators’ amendment was roundly rejected, with less than 24% in favor.

That left one final vote on MOPR reform with NEPOOL’s Participants Committee. Nine days before that vote, ISO suddenly issued a memorandum saying it “wholly supported and preferred” the generators’ proposed amendment for a slower transition.

“We often adjust our proposals before the final stakeholder votes” after listening to all the feedback, said Matthew Kakley, an ISO spokesperson.

On the day of the final vote, Feb. 3, ISO’s chief operating officer, Vamsi Chadalavada, told the Participants Committee that the transition amendment was their preference in lieu of “prolonged litigation that could result from a failure to compromise,” according to the attorney general’s account.

The amendment passed with 61.49% support, just 1.49% over the required minimum. Only that amended proposal was offered by ISO for a full vote, giving the committee the choice of voting for no MOPR reform or delayed MOPR reform. The amended proposal passed with 69% in favor.

“Our proposal is one to remove the MOPR from the capacity market in a way that protects power system reliability and continues the region’s clean energy transition,” Kakley said. “The proposal received broad stakeholder support and many comments were filed in support of the transition.”

Among the supporters is the Electric Power Supply Association, which said it “strongly agrees that simply eliminating the MOPR without a just and reasonable replacement or accompanying market reforms is untenable.”

The New England States Committee on Electricity said in its comments that it does not oppose the slower transition, so long as the 2025 MOPR elimination deadline “remains firm.”

But many of the comments from private citizens expressed extreme frustration with what they view as the continuation of a major barrier to progress on clean energy. Jon Slote, a Newton, Massachusetts, resident, said he and many of his neighbors are trying to do their part.

“We have installed added insulation, rooftop solar panels and a whole-house heat pump,” he wrote. “And I expect our utilities and regulators to be ‘rowing in the same direction’ with the citizens of the Commonwealth.”

Read the full article in Energy News Network here.