Massachusetts House approves bill ordering hydro, offshore wind power contracts
BOSTON >> House lawmakers voted near unanimously on Wednesday to diversify the state's state energy mix by requiring utilities to solicit and enter into long-term contracts for large-scale hydroelectric and offshore wind power as part of a strategy to reduce the state's reliance on natural gas and meet its carbon emission reduction mandates.
The bill would require utilities to solicit contract proposals spanning 15 to 20 years for roughly 1,200 megawatts of hydropower and 1,200 megawatts of offshore wind energy, subject to state approval.
Gov. Charlie Baker has pushed the importation of large-scale hydropower from Canada as a reliable and cost-effective way to respond to the impending retirement of more than 10,000 megawatts of fossil fuel and nuclear power generation in the region.
Rep. Thomas Golden, the Lowell Democrat and co-chair of the Telecommunications, Utilities and Energy Committee, said the bill would lead to Massachusetts procuring 20 percent of its electric load from renewable energy sources, including "the largest procurement of offshore wind in the nation."
But the New England Power Generators Association warned the bill would "undermine a competitive electricity market driving the lowest prices in over a decade." The association said the bill could "dramatically increase costs for consumers and derail billions of dollars in energy investments here in Massachusetts" and said increasing contracting with Canadian hydropower was a primary focus of the bill.
"In response to retiring power plants, thousands of megawatts of new local plants are under development today to preserve reliability and continue Massachusetts' leadership in driving lower emissions," NEPGA President Dan Dolan said in a statement. "Locking consumers into decades-long contracts would also freeze out innovation at a time when tremendous growth and promise is evident from more efficient power generation, lower renewable energy costs and burgeoning distributed electricity supplies."
With the 154-1 vote in the House, the proposal now advances to the Senate where leaders have suggested they could look to broaden the scope of the original House bill by looking at ways to boost energy efficiency and spur the development of energy storage technology.
Advocates, such as Environment Massachusetts, are also hoping the Senate will move faster on offshore wind by requiring the purchase of up to 2,000 megawatts, and would like to see the issue of solar incentives revisited after a short-term expansion was signed into law earlier this year.
Over the course of seven hours of deliberation on Wednesday, debate in the House was sporadic as members slowly and without explanation withdrew 49 of the 61 amendments that had been filed to the bill. Among the proposals withdrawn was a Rep. Frank Smizik amendment that would have made Cape Wind, currently excluded by the restrictions in the bill, eligible to bid for an offshore wind energy contract.
Seven amendments were adopted, including a Rep. Stephen Kulik amendment aimed at helping homeowners finance energy efficiency projects, a Rep. Mark Cusack amendment to make fuel cells eligible for credits under the state's alternative energy program, and a Ways and Means amendment aimed at making sure gas companies survey and repair any leaks when pipes are exposed as part of a local infrastructure improvement project.
Rep. James Lyons, an Andover Republican, cast the lone vote against the bill after his amendment to prohibit companies from charging electric ratepayers to cover the cost of construction of new natural gas pipelines was ruled out of order because nothing in the underlying bill dealt with natural gas or pipelines.
"It was my understanding, and maybe I'm corrected, Mr. Speaker, that this was an omnibus energy bill," Lyons said.
Lawmakers from the South Coast and Cape Cod talked up the legislation's potential to spur development of wind generation off the Massachusetts shore and create jobs.
"They told me I was nuts when I said there were a lot of jobs involved," House Speaker Pro Tem Patricia Haddad, a Somerset Democrat, said on the floor. Warning of competition in offshore wind from the Empire State, Haddad said she has already heard from shipbuilders in her area beginning to build vessels for offshore wind and said central Massachusetts's precision manufacturing sector would benefit as well.
Rep. Antonio Cabral, a New Bedford Democrat, took a historical view of his district, recalling how the Whaling City and Nantucket dominated the energy market when whale oil was used for candles, before it was overshadowed by petroleum.
"Massachusetts will once again lead the nation in energy," Cabral told his colleagues. Predicting the bill would create new work for those employed in the fishing industry, Provincetown Democrat Rep. Sarah Peake called it "legacy legislation" and referred to the windswept seas by the continental shelf as an area that "has been referred to as the Saudi Arabia of wind power."
Dong Energy, a Denmark-based developer with a federal offshore lease for wind development in the waters off Martha's Vineyard, celebrated the bill's passage: "This promising initial step will help create a viable offshore wind industry here in the Commonwealth, which will bring reliable, cost-effective clean energy to Massachusetts' households and businesses."
Associated Industries of Massachusetts, lamenting the strain that high energy prices already put on Bay State employers, wrote to lawmakers Wednesday urging them to "avoid passing an energy bill that will increase the burden that runaway electricity costs place on companies struggling to create economic opportunity in the commonwealth."
AIM raised the prospect, based on its interpretation of a recent Supreme Judicial Court ruling on state emission reduction requirements, that the hydro and offshore wind power promised under the bill would not count toward reduction mandates because the power would likely come from Canada.
The Conservation Law Foundation, a plaintiff in the case, called this interpretation an "ambitious misreading" of the opinion, and said they believed any carbon reduction stemming from energy produced or consumed in Massachusetts would count under the Global Warming Solutions Act.
The business group, along with others such as the Massachusetts Fiscal Alliance, also said the lawmakers must more clearly define what it would mean for a contract to be "cost-effective" or "reasonable." Both terms are used as criteria the Department of Public Utilities would use to review and approve a contract.
"While AIM supports the concept of soliciting for clean energy resources, several provisions of the bill raise the prospect of catastrophic cost increases for both employers and homeowners," AIM wrote in a letter Wednesday.
Finally, AIM suggested that the section requiring state regulators to make a "binding determination of a winning bid" in an instance where utilities could not agree on the best hydro or offshore wind proposal could open the door to a contract being approved even if none of the bids are deemed acceptable.
"This legislation is an important step forward for the state's energy future," Rep. Brian Dempsey, chairman of the Joint Committee on Ways & Means, said in a statement. "The House is continuing to demonstrate its leadership on energy issues by looking to introduce new, clean, renewable sources to our energy portfolio through a competitive procurement process. The passage of this bill will help ensure a more secure and stable energy marketplace for the Commonwealth."
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