Dive Brief:
- In response to the elevated price of oil, Gov. Maura Healey, D, issued an executive order Monday instructing the state to provide home energy assistance to households in Massachusetts this winter, to be funded by alternative compliance payments, or ACP — the fees that electricity suppliers pay when they fall short of mandated clean energy targets.
- The order also temporarily cuts by 50% the ratepayer costs associated with the state’s Alternative Portfolio Standard, and temporarily orders the use of ACP funds to cover the “distributed solar charge” line item that is normally billed to ratepayers to support the Solar Massachusetts Renewable Target program.
- “We agree with the governor that oil prices have risen to the point at which the state needs to supplement federal support for low-income energy assistance,” said Larry Chretien, executive director of Green Energy Consumers Alliance, in an email to Utility Dive. “However, we would rather see the money come from the general fund than [reallocate] ‘alternative compliance payments’, which is funding that should go to clean energy projects.”
Dive Insight:
Gov. Healey’s executive order declared an energy emergency in Massachusetts, and directed the state’s Department of Energy Resources and Department of Environmental Protection to identify ACP funds that can be used to “augment federal funding for the Home Energy Assistance Program” this winter. The order also directs the creation of a one-time benefit for middle-income households that don’t qualify for HEAP but rely on oil for home heating.
Home heating oil in Massachusetts averaged $6.12/gallon last week, up nearly 75% from a year ago, according to the most recent data from the DOER.
Chretien noted that “in the last year or two, Governor Healey's team has invested ACP money well” in projects such as battery storage and microgrids to increase resiliency in environmental justice communities, and making state and local government buildings more efficient and lower cost to operate. “All of those investments reduce costs for ratepayers and taxpayers,” he said, adding that he would also like to see the state prioritize heat pump conversions.
The 50% reduction in ratepayer obligation to the Alternative Energy Portfolio Standard, which incentivizes technologies like renewable thermal and flywheel energy storage, will provide $20 million in additional ratepayer relief, said a release from the governor’s office. Maria Hardiman, a spokesperson with the Massachusetts Executive Office of Energy & Environmental Affairs, told Utility Dive that the governor plans to wind down the APS program, beginning with the 50% cut.
In addition to temporarily eliminating ratepayers’ responsibility for the Solar Massachusetts Renewable Target program, which provides incentives for residential and commercial solar projects, the governor ordered several state agencies to review “statewide net-metering compensation, program costs, cost growth, and the appropriate structure and level of compensation.”
“The review shall examine reforms adopted in other jurisdictions and identify reforms that could control costs while continuing to support solar deployment in Massachusetts,” the order said.
However, the order also stated, “Nothing in this Executive Order shall negate the directive in Executive Order 654 to double the amount of solar on the system by 2035. Massachusetts can both continue to grow solar and ensure ratepayers are not paying more than is necessary to realize the benefits of that growth.”
Currently, net-metering compensation is dictated individually by state utilities like Eversource, National Grid and Unitil.
In an email to Utility Dive, National Grid spokesperson Brian Noyes said the company “supports meaningful, sustainable solutions that address energy affordability while ensuring the Commonwealth maintains a safe and reliable energy system.”
“We support the Governor’s all-of-the-above approach to meeting Massachusetts’ energy needs and will continue working with the Administration, Legislature, and regulators on practical measures to improve affordability while preserving the investments needed to serve customers and strengthen the energy network,” Noyes said.
