Massachusetts kicked off the year by giving new life to a longtime goal of many climate and clean energy advocates in New England: developing a Forward Clean Energy Market.

The FCEM idea has been floating around New England since at least 2016, when it was put forward by renewable energy companies.

It has evolved into a proposal that the Massachusetts Department of Energy Resources (DOER) put out in the first week of January, relying on help from consultants at the Brattle Group and Sustainable Energy Advantage. (See Massachusetts Floats FCEM Proposal.)

“Our current market structures and the current procurement process, although they provide a lot of incentives, it’s difficult to scale those both in size and speed,” Joanna Troy, Massachusetts’ director of energy policy and planning, said in a recent webinar.

That’s why the state has put forward the regional plan, aiming to accelerate the development of clean energy sources to help Massachusetts and the region’s other states meet their ambitious goals.

But with the document now out and making the rounds, the question floating around New England’s energy stakeholders is: “Now what?”

As the state tries to advance its plan to start a regional clean energy market, it will have to face down a heavily bureaucratic stakeholder process, a cautious grid operator, and the general inertia of a region that remains way behind on its decarbonization goals.

The key to Massachusetts’ proposal, energy and climate experts say, is that it remains flexible and gives states some leeway to transition their own existing, patchwork clean energy incentives into a regional market over time.

“It’s tailored to the fact that the region has a bunch of renewable energy decarbonization goals that have different flavors to them,” said Pete Fuller, a consultant at Autumn Lane Energy Consulting.

“What the DOER and their consultants have done here is to try to meet the region where it is and create a platform … that will enable the region to meld existing policies and objectives into this new platform. I’m very encouraged by that,” Fuller said.

The proposal includes four types of clean energy certificates with varying degrees of resource specificity; plus it would allow states to offer their own individual RECs or other existing incentives on the regional platform.

That would let the New England states access the market without necessarily making any changes to their existing statutes — at least at first.

Susannah Hatch, director of clean energy policy at the Environmental League of Massachusetts, echoed that understanding of the FCEM plan’s design.

“It’s an additive feature to existing markets currently being administered by ISO-NE, which would still allow states to explore procurements outside of it,” she said.

But she said she’ll be watching closely to see how the market would address the fact that sometimes cost isn’t the overriding factor in procuring energy.

“Renewable energy sources are not apples to apples,” she said. “We definitely want to make sure that the market incentivizes a balanced renewables portfolio for New England.”

Big Governance Questions to Answer

What’s prevented FCEM from moving from concept to reality is primarily a complex set of questions about how the market would be governed.

To what extent would ISO-NE be involved? Would the market be FERC-jurisdictional? How would the states share control of its design and operation?

The Massachusetts proposal recognizes the difficulty of answering those questions and puts forward a preliminary plan that includes creation of an independent nonprofit governed by representatives of the six states, which would work alongside ISO-NE and have the ability to propose rule changes to FERC.

But it also mentions possible alternatives and says the states will keep studying.

“The fact that Chapter 1 of the report is governance highlights the importance of that topic and hopefully jumpstarts those conversations so that we can begin to resolve this stuff and put some real certainty to a structure, rather than the sort of speculative conversations we’ve been having,” Fuller said.

As far as ISO-NE is concerned, the ball is fully in the states’ court.

ISO-NE spokesperson Matt Kakley said the grid operator is “reviewing the proposal and awaiting further guidance from the New England states on whether this is a path they’d like to pursue.”

Fuller said the RTO is a “cautious beast.”

“And they are very anxious that the states lay out a clear plan and really provide a definitive direction,” he said. “Once the states do that, then I think the ISO will engage, and I think we can all get into problem solving.”

Troy said that the state’s priority is getting feedback from the public.

After that, she said, Massachusetts will “continue discussion within the NESCOE setting with other states before determining what or if an additional NEPOOL or process would be necessary.”