Massachusetts Doubles Renewable Energy Requirements for Utilities

July 9, 2008

Massachusetts Governor Deval Patrick has signed new comprehensive energy legislation that doubles the requirement for the state's utilities to draw on renewable energy for their electricity, while also encouraging the utilities to use energy efficiency and helping municipalities that wish to follow suit. The Green Communities Act, approved on July 2, doubles the rate of increase in the state's Renewable Portfolio Standard from 0.5% per year to 1% per year, with no cap. As a result, utilities and other electricity suppliers will need to draw on renewable power sources for 4% of their electricity sales in 2009, rising to 15% by 2020, 25% by 2030, and so on. To help utilities meet those requirements, they'll be able to enter into 10- to 15-year contracts with renewable energy developers, and they'll also be allowed to own solar energy systems installed on their customers' roofs. The act also encourages larger customer-located systems by allowing customers with solar and wind power systems as large as 2 megawatts in capacity to earn credit on their power bill for any excess power fed back into the grid, under so-called net metering agreements.

To encourage utilities to also pursue energy efficiency, the new law will make energy efficiency compete in the market with traditional energy supplies, and utilities will be required to purchase all available energy efficiency improvements that cost less than new power generating sources. The utilities will also offer rebates and incentives to encourage their customers to take advantage of energy efficient technologies for lighting, air conditioning, and industrial equipment. For municipalities that wish to pursue energy efficiency and renewable energy, a new $10 million state program will provide technical and financial assistance. Called the Green Communities Division, it will be part of the state's Department of Energy Resources, an expanded and elevated revision of the state's current Division of Energy Resources.

The Green Communities Act also requires the State Board of Building Regulations and Standards to adopt, as its minimum standard, the latest edition of the International Energy Conservation Code as part of the State Building Code. It also requires new buildings owned or operated by the state to minimize their life-cycle costs by using energy efficiency, renewable energy, and water conservation. Regarding vehicles, the act requires the state to purchase hybrid or alternative fuel vehicles to the maximum extent feasible, with such purchases providing at least 5% of all new motor vehicles purchased by the state. The act also gives final legislative approval to the state's participation in the Regional Greenhouse Gas Initiative. See the governor's press release and the full text of the legislation, Senate Bill 2768.