Massachusetts Clean Peak Energy Portfolio Standard rule draft

Massachusetts regulators are advancing the implementation of a new "Clean Peak Energy Standard" as required by a 2018 state law. Once the Massachusetts Department of Energy Resource's Clean Peak Energy Portfolio Standard regulations take effect, the new rules will require retail electricity providers to meet a baseline minimum percentage of sales with qualified clean peak resources that either dispatch or discharge electricity to the electric distribution system during seasonal peak periods or reduce load on the system.

On August 9, 2018, Governor Charlie Baker signed into law An Act to Advance Clean Energy, requiring the state DOER to develop a clean peak energy standard program. Through 2019, DOER engaged in stakeholder discussions and developed a draft regulation.

DOER has now submitted its draft Clean Peak Energy Portfolio Standard rule to the state legislature which has a statutory opportunity to review and provide feedback on the rule. The DOER's communication to the Massachusetts General Court is docketed as Bill H.4581.

As summarized by DOER, 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 during defined Seasonal Peak Periods which represent the times when demand for electricity is typically the highest. Retail electricity suppliers are required to document annually that they have procured a certain quantity of CPECs each year, and may purchase CPECs from qualified clean peak resources.

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. The CPEC mandate will then change periodically -- typically increasing by 1.5% each following year, but the requirement may increase by more than 1.5% per year if the market is oversupplied, which would trigger a decrease in Alternative Compliance Payment rate "to cool the market and reduce the ratepayer impact of an increased obligation."

The draft rules allow DOER to require the state's Electric Distribution Companies to enter into long term contracts for CPECs through a competitive procurement process. Municipal Lighting Plants are exempt from the obligation, and facilities interconnected with Municipal Lighting Plants are ineligible to participate in the program.