The Massachusetts legislature is expected to change existing state laws regarding net metering for renewable energy technologies before the end of the current legislative session, which is expected to conclude at the end of the year. A number of proposals have been floated regarding net metering, and more may be made before the end of the session. This article explores four bills that are now pending in the legislature, which may provide some indication of the ultimate resolution on net metering.
SB 1973, An Act Providing for the Establishment of a Comprehensive Adaptation Management Plan in Response to Climate Change. SB 1973 was originally sponsored by the Massachusetts Chairman of the Senate Committee on Global Warming and Climate Change and addressed climate change adaptation management plans. As SB 1973 made its way through the Massachusetts Senate, an amendment (Amendment 18) was added addressing the solar industry specifically, in the following manner:
SB 1973 (as amended) passed in the Senate and was referred to the House Ways and Means Committee on July 27, 2015.
HB 2852, An Act Relative to Net Metering, Community Shared Solar and Energy Storage. HB 2852 was introduced in January 2015, and scheduled for hearing on June 2, 2015. HB 2852 remains pending before the Joint Committee on Telecommunications, Utilities and Energy.
HB 2852 is moving through the legislature more slowly than other bills such as SB 1973 and HB 3724, which have garnered more attention.
HB 2879, An Act Relative to Net Metering. HB 2879 was also introduced in January 2015. The bill would allow resources that otherwise meet net metering qualifications under current net metering rules to avoid the cap allocation if such eligibility determination is obtained on or before December 31, 2016. HB 2879 was scheduled to go to a hearing on June 2, 2015. However, it was referred to the Joint Committee on Telecommunications, Utilities and Energy before being set for hearing, where it currently remains.
HB 3724, An Act Relative to a Long-Term, Sustainable Solar Industry. Proposed by the governor after the introduction of Amendment 18 to SB 1973, HB 3724 is aimed at helping Massachusetts reach the goal of 1,600 MW of solar-generated power by 2020. Under this bill, current incentives would continue to be available until the 1,600 MW target is reached. Furthermore, in order to accelerate reaching this goal, the bill proposes that the current net metering cap be expanded by 50 percent for private entities and 40 percent for public entities – which represents an increase up to 6 percent and 7 percent of the requisite distribution company's peak load, respectively. The Massachusetts Department of Public Utilities (DPU), also would be given authority to raise the net metering cap when it is in the public interest to do so. When the 1,600 MW target is reached, the incentives would be adjusted in the following ways:
The bill would also allow DOER to create a solar incentive program for new solar generators and create similar incentive programs for other renewable technologies. HB 3724 was referred to the Joint Committee on Telecommunications, Utilities and Energy on August 10, 2015, and has not yet been set for a hearing.
The governor noted that "in filing this bill, our administration reaffirms our commitment to diversifying the Commonwealth's energy portfolio, reducing our carbon footprint, and protecting ratepayers."1 Specifically with regard to net metering, Governor Baker filed this legislation in order to provide an additional revenue stream to many solar projects, with the goal of fast-tracking Massachusetts toward the previously stated goal of 1,600 MW by 2020. Beyond the 1,600 MW goal, HB 3724 "provides for a slightly higher credit value for solar installations developed by government entities, municipalities, low income ratepayers, and community shared net metering projects, as the net metering credits for these customers will be at the higher level of the basic service price."2
One distinction between HB 3724 and SB 1973 is the impact each bill would have on distribution companies with respect to their service territories. SB 1973 would raise the net metering cap without regard to service territories that have already reached the cap. HB 3724 would raise the net metering cap but still maintain different caps tied to the particular load of the utility in a customer's service territory. This distinction is important for distribution companies that may be in an area where more customers take advantage of net metering and have already reached the existing caps.
* * *
Adjusting the net metering caps for the solar industry in particular continues to be a hot topic for the Massachusetts state legislature. The legislature's action on these bills and/or any other net metering proposals in the coming months, whether it eliminates or adjusts net metering caps or allows the current caps to stand, could have a substantial impact on the future of solar energy in Massachusetts.
We will continue to monitor and will report on any material developments. For further information about this legislation, including its status, please contact any of the attorneys listed in the sidebar.
[1.] Press Release, "Baker-Polito Administration Files Solar Legislation to Raise Net Metering Caps, Continue Industry Growth," Press Office of the Governor of Massachusetts, August 7, 2015.
Jennifer Galiette will be a speaker at a New England Women in Energy and the Environment (NEWIEE) event hosted on campus at UMass Amherst.
Florence Davis co-wrote an article entitled "Taming the Duck--Distributed Energy Resource Solutions to Renewable Energy Integration," for Bloomberg BNA's Daily Environment Report.
On January 30, Jed Davis will speak at The Knowledge Group Webcast, "Best Strategies in Protecting Your Firm Against Hackers: What Hackers Can and Cannot Do?"
On September 22 and 23, Dave Doot, Tom Havens and Florence Davis will participate at Law Seminars International's 13th Annual Comprehensive Conference on Energy in the Northeast in Boston.
Day Pitney Alert
Joe Fagan was quoted in an article, "For rebuffed Jordan Cove LNG, pipeline was the stumbling block at FERC," in S&P Global Market Intelligence.
Jeff Clopeck was quoted in an article, "Cautious optimism seen as equity crowdfunding begins," in Massachusetts Lawyers Weekly.
Harold Blinderman was quoted in an article, "Coal Co.'s Win Won't Diminish EPA's Regulatory Clout," in Law360. In the article, he discusses the significance of the case, Murray Energy Corporation et al v. Administrator of Environmental Protection Agency, in which the federal District Court for the Northern District of West Virginia granted summary judgment to Murray Energy.
Joe Fagan was quoted in an article, "Pipeline Fights May Determine Scope Of Climate Reviews," in Law360. The article is about how an increase in legal challenges by environmental groups claiming that the Federal Energy Regulatory Commission must examine the climate change impacts of increased natural gas drilling before approving pipelines could help define the boundaries of a landmark 2004 U.S. Supreme Court ruling that limited the scope of federal environmental reviews to actions within an agency's authority.
John McLafferty was quoted in an article,"New pay equity law offers fertile ground for litigation," in Massachusetts Lawyers Weekly.