May 18, 2021

MassDEP Seeks Stakeholder Input in Electricity Sector Regulation Review

Holland & Knight Energy and Natural Resources Blog
Dianne R. Phillips | Mark C. Kalpin | Maria de la Motte | Saqib Z. Hossain
Energy and Natural Resources Blog

Two Massachusetts Department of Environmental Protection (MassDEP) electricity sector regulations, 310 CMR 7.74: Reducing CO2 Emissions from Electricity Generating Facilities and 310 CMR 7.75: Clean Energy Standard, require MassDEP to complete a program review by Dec. 31, 2021, and every 10 years thereafter. As an initial step in the review process, MassDEP is requesting comment on the scope of the review by May 31, with plans to consider these comments in mapping the next steps, including stakeholder meetings, collecting or developing information relevant to review of the programs and drafting regulatory language.

The regulations were promulgated in 2017 to address emissions from the electricity sector and ensure compliance with the emissions limits of the Massachusetts Global Warming Solutions Act (GWSA). The first regulation, 310 CMR 7.74, includes annually declining emission limits from electric power plants and an allowance trading program for emissions from electricity generation, and provides flexibility in the form of allowance auctions, limited allowance banking and an "emergency deferred compliance" option. With 310 CMR 7.75, MassDEP set a Clean Energy Standard (CES) that requires utilities and competitive suppliers of electricity to procure clean energy in increasing amounts over time. The percentage began at 16 percent in 2018 and increases 2 percent annually to achieve 80 percent of electricity from clean energy sources by 2050. Compliance may be achieved using clean energy certificates (CECs) or alternative compliance payments (ACPs).

The regulations specify that the 310 CMR 7.74 program review must evaluate carbon dioxide (CO2) emissions, costs, consistency with statewide CO2 emissions limits and any other relevant information, while the 310 CMR 7.75 review must evaluate projected clean energy credit supply and costs.

MassDEP has posted a stakeholder discussion document offering suggested areas for comment on topics, including the stringency of the regulations, technical review and standards for municipal light plants (MLPs). For example, on the topic of the stringency of the regulations, MassDEP is requesting that stakeholders comment on a proposal to increase the stringency of the CES from 40 percent to 60 percent or more in 2030, which could be addressed by increasing the standard by 5 percent or more each year from 2026 to 2030 instead of the 2 percent per year increase in the current regulation. Stakeholders are also encouraged to comment on the timing of any regulatory amendments.

As described in Holland & Knight's blog, Massachusetts Gov. Charlie Baker Signs Comprehensive Climate Change Legislation (March 31, 2021), Chapter 8 of the Acts of 2021 (An Act Creating a Next-Generation Roadmap for Massachusetts Climate Policy) will require additional greenhouse gas (GHG) emissions reductions by 2030 beyond those identified in the Massachusetts Clean Energy and Climate Plan (CECP). The amount of electricity sector-specific reductions that will be required is not yet known, as the plan is further revised in response to more than 1,000 comments and to comply with the new state law that requires the Executive Office of Energy and Environmental Affairs (EEA) to develop and finalize a CECP for 2025 and 2030 by July 1, 2022. The new law provides that sector sub-limits will be established, including for electric power, but the specific reductions remain undetermined. In the meantime, this electricity sector regulatory review, slated to occur once every 10 years, is an important opportunity for stakeholder engagement as MassDEP seeks to bring these regulations up to date and align them with the ambitious goals of the new climate legislation.

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