On August 3, 2012, Massachusetts Governor Patrick signed new energy legislation that, among other things, expands the incentives and opportunities for developing wind, solar, hydro and other forms of renewable power generation to serve the state's electricity consumers. This law, Senate Bill 2395, An Act relative to competitively priced electricity in the Commonwealth (the "Act"), also includes provisions that aim to manage some of the drivers of energy cost increases.
In regard to renewable energy, the Act:
more than doubles the amount of power supply that electric distribution companies must purchase from renewable generators under long term contracts,increases the opportunities for owners of distributed renewable energy facilities to sell their excess power at favorable rates, andincreases the size of hydroelectric projects eligible for financial incentives under the state's Renewable Portfolio Standard (RPS).
ML Strategies and Mintz Levin have been actively engaged with the Legislature and the Patrick Administration in the development of the Act. We welcome the opportunity to advise interested companies on the details and implications of the Act as well as on the development of regulations to implement it. In this alert, we summarize the provisions in the Act that will significantly expand the opportunities and incentives for renewable energy development.
More Long-Term Contracts for Renewable Power
The Act increases the overall percentage of electricity supply that electric distribution companies may purchase from renewable generating facilities under long-term contracts to 7%. The Green Communities Act (GCA) of 2008 previously required distribution companies to obtain up to 3% of their total annual supply from long-term contracts for renewable energy with terms of 10 to 15 years. The Act adds a new long-term contracting provision, Section 83A, to the GCA, that requires distribution companies to solicit proposals from renewable energy developers for long-term contracts with terms of 10 to 20 years for up to 4% of their annual load.1 By December 2016, electric distribution companies must conduct two rounds of joint solicitations for the new 10 to 20 year contracts. Achieving the overall 7% will require renewable energy developers to construct hundreds of megawatts of new renewable generation facilities. Wind farms are likely to be the form of generation that delivers the power to meet this additional demand for renewable generation, which RPS rules allow be built in any of the New England states, New York or nearby Canadian provinces.
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