Massachusetts Proposed Three-Year Energy Efficiency Plan Would Deliver Record-Setting Benefits For a Modern Energy Economy

Massachusetts is on the verge of having another nation-leading Three-Year Energy Efficiency Plan, this time specifically aimed at reducing greenhouse gas emissions and reaching environmental justice communities. Thanks to the requirements of the Climate Act of 2021 and the efforts of the Energy Efficiency Advisory Council (EEAC), on which Acadia Center is a voting member representing the environmental community, the proposed plan introduces new elements to energy efficiency planning in the Commonwealth that will deliver record-setting ratepayer benefits and drive meaningful greenhouse gas emissions reduction to help meet our state’s climate targets.

The proposed plans call for a $3.94 billion investment in energy efficiency, which will provide around $13 billion in ratepayer benefits, the highest levels in New England. The Climate Act of 2021 set a greenhouse gas emissions reduction requirement for the plans for the first time ever. The expected reductions that this plan offers (845,916 metric tons of CO2e) will exceed the target set by the Secretary of Energy and Environmental Affairs (845,000 metric tons of CO2e).

To meet these targets, the program administrators (PAs) set the social cost of carbon at $393 per ton and the discount rate at 1%, treating the future impacts of climate change as more significant than in prior plans. These figures were appropriately set to “account for the intergenerational nature of climate change,” based upon a study commissioned by the PAs. Under the Climate Act of 2021, the D.P.U. must prioritize equity and greenhouse gas emissions reduction in its decisions. Utilizing these values provides a way in which the D.P.U. can appropriately value the health of future generations in compliance with its expanded mandate.

Following more than a year of work with the Equity Working Group subcommittee of the EEAC, the Three-Year Plan includes an innovative commitment to closely monitoring participation, expenditures, savings, and benefits in 38 environmental justice communities around the state. The EEAC also got the PAs to agree to link a piece of their bonus (or performance incentive) to the amount of ratepayer benefits they generate from these 38 communities and how well they meet their electrification targets.  These performance incentives can induce PAs into behavior they would not normally prioritize and to align with the Commonwealth’s policy choices. A different approach to give the PAs a bonus based on how well they served renters in the last Three-Year Plan was rejected by the D.P.U., but Acadia Center is confident that this essential proposal will survive scrutiny.

Acadia Center is participating in the dockets (D.P.U. 21-120 through 21-129) as full intervenors, actively appearing in evidentiary hearings and submitting both Initial and Reply Briefs. Acadia Center believes these groundbreaking plans are well within the authority for the D.P.U. to approve.

The D.P.U. is set to make its decision on this plan in late January. The plan represents an unprecedented opportunity to provide benefits to ratepayers, reductions in greenhouse gas emissions, and critical advances in equity and electrification. Acadia Center urges the D.P.U. to approve these groundbreaking plans as they are.