Massachusetts H 4581: An Act Communication from the Division of Energy Resources of the Executive Office of Energy and Environmental Affairs (under the provisions of section 12 of Chapter 25A of the General Laws) submitting regulations to 225 CMR 21, Clean Peak Energy Portfolio Standard (CPS).

Bill Text

COMMONWEALTH OF MASSACHUSETTS
EXECUTIVE OFFICE OF
ENERGY AND ENVIRONMENTAL AFFAIRS
DEPARTMENT OF ENERGY RESOURCES
100 CAMBRIDGE ST., SUITE 1020
BOSTON, MA 02114
Telephone: 617-626-7300
Facsimile: 617-727-0030

Charles D. Baker
Governor

Karyn E. Polito
Lt. Governor

Kathleen A. Theoharides
Secretary

Patrick C. Woodcock
Commissioner

March 19, 2020

To: Clerk of House of Representatives, Clerk of the Senate
CC: Chairs of the Joint Committee on Telecommunications, Utilities, and Energy
RE: Submission of 225 CMR 21.00 Clean Peak Standard Regulation Submission to General
Court

Dear Clerks:

Pursuant to M.G.L. Chapter 25A Section 12, please find enclosed:
 225 CMR 21 Clean Peak Standard Regulation
 Summary of the Regulation in layman's terms
In addition to the requirements of Section 12, please also find enclosed:
 225 CMR 21 Clean Peak Standard Regulation in redline format over the originally
proposed regulation prior to the public comment period required by Chapter 30A; and
 DOER Response to public comments received
In the development of 225 CMR 21.00, the Clean Peak Standard Regulation, the pertinent
provisions of Chapter 30A, except section five, have been complied with.

Please direct questions and comments on this regulation to:

Serafina Zeringo
[email protected]
617-626-1108

Sincerely,

s/Patrick C. Woodcock
Patrick C. Woodcock
Commissioner

Regulation Summary

Summary of Draft Clean Peak Energy Standard –225 CMR 21.00

The Clean Peak Energy Standard was established as part of the Act to Advance Clean Energy of
2018 and is codified at M.G.L. c. 25A, § 17C (Statute). This draft regulation represents the
Department of Energy Resources (DOER) first promulgation of regulations to implement the
Statute.

The Clean Peak Energy Standard allows for qualified renewable energy generators, energy
storage resources, and demand response resources to earn Clean Peak Energy Certificates
(CPECs) for every megawatt hour of electricity they produce or reduce coincident with Seasonal
Peak Periods as established by the regulation. Seasonal Peak Periods represent the times of day
in which the Net Demand for electricity is typically the highest. The CPECs may then be
purchased by retail electricity suppliers, who are required to document annually that they have
procured a certain quantity of CPECs each year. These resources contribute to the
Commonwealth's clean energy goals by increasing renewable energy generation, reducing the
need for conventional fossil fuel-based power generation, and assisting the Commonwealth in
meeting its obligations under the Global Warming Solutions Act.

In 2020, retail electricity suppliers will be obligated to procure CPECs equal to an amount of
1.5% of their total electricity sales to end-use customers. This requirement increases by 1.5%
each following year. The requirement may increase by more than 1.5% if the market is
oversupplied. A requirement increase greater than 1.5% is accompanied by a decrease in
Alternative Compliance Payment rate, to cool the market and reduce the ratepayer impact of an
increased obligation. The DOER may also require the Electric Distribution Companies to enter
into long term contracts for CPECs through a competetive procurement process.

Municipal Lighting Plants are exempt from the obligation, and facilities interconnected with
Municipal Lighting Plants are ineligible to participate in the program.

The Clean Peak Energy Standard will send a market signal to clean energy generation to invest
in storage technologies to deliver energy to users and to reduce demand during peak periods,
thereby reducing the emissions and costs associated with these periods. The market signal will
include prioritization of Winter and Summer seasons, resources which enhance energy resilience,
performance coincident with actual monthly system peak demands, and resources which are new
and provide incremental additional energy on peak beyond what already exists or is contracted
for. The market signal will reduce the Commonwealth’s reliance on high emissions and high
cost power plants and enable the continued integration of renewable resources in support of
achieving the Global Warming Solutions Act.

A summary of changes to the regulation in response to comments is as follows:
 Increase the initial ACP value to $45 from the originally proposed $30
 Hold the initial ACP for 5 years instead of the originally proposed 10 years
 Increase the Summer/Winter Multiplier to 4x from the originally proposed 3x
 Increase the Actual Monthly Peak Hour Multiplier to 25x from 15x

 Adjust the EDC procurement target according to the market supply of the previous year
 Adjust the obligation (up) and ACP (down) in response to market oversupply

HOUSE . . . . . . . . . . . . . . . No. 4581
Communication from the Division of Energy Resources of the Executive Office of Energy and
Environmental Affairs (under the provisions of section 12 of Chapter 25A of the General Laws)
submitting regu