By William Opalka and Rich Heidorn Jr.

With only hours to go at the end of its session, the Massachusetts legislature Sunday night passed a major energy bill that boosts Canadian hydropower and offshore wind as sources to meet the state’s clean energy goals.

Legislative negotiators worked through the weekend to reconcile House and Senate bills that differed over the volume of offshore wind, the inclusion of the Cape Wind project and support for new gas pipelines.

The final bill (H.4568) requires utilities to annually obtain 9,450 GWh of energy that qualifies for the state renewable portfolio standard, including onshore wind and Canadian hydropower.

It also orders procurement of 1,600 MW of offshore wind by 2027 — a compromise between the House’s 1,200 MW and the Senate’s 2,000 MW. It excludes Cape Wind, which the Senate would have included, because it has not won a competitive lease auction from the federal government.

First Mover

In January 2015, the U.S. Bureau of Ocean Energy Management awarded offshore leases to RES America Developments (lease area OCS-A 0500 for 187,523 acres) and Offshore MW (lease area OCS-A 0501 for 166,886 acres) in the Massachusetts Wind Energy Area, which starts about 12 nautical miles offshore. Last June, BOEM approved the assignment of RES America’s lease to DONG Energy Massachusetts.

BOEM said the area leased could support approximately 2 GW of wind generation.

Thomas Brostrøm, general manager of North America for DONG Energy Wind Power, said the legislation “will allow the creation of a viable offshore wind energy industry here in Massachusetts.”

The company said it plans to install capacity of up to 1 GW in the form of what it is calling Bay State Wind, a project it said will create 1,000 new jobs in Massachusetts during construction and approximately 100 new jobs to support the wind farm during its life.

“With world-class wind speeds and ideal water depths of between 130-165 feet, Massachusetts will be able to garner the economic benefits and supply chain development of being the first mover to site utility-scale offshore wind energy on the East Coast of the United States,” the company said.

DONG Energy, based in Denmark, operates 19 offshore wind projects totaling more than 3 GW with another 3 GW under construction.

Offshore MW, which is partnering with the nonprofit Vineyard Power Cooperative on its project, could not be reached for comment.

Other Provisions

In addition to jumpstarting offshore wind, the Massachusetts bill:

• Promotes energy storage, authorizing the Department of Energy Resources to develop procurement targets and incentives for utilities, households and businesses;
• Requires utilities to fix their most serious gas leaks; and
• Expands energy efficiency and clean energy financing options for commercial customers under the Property Assessed Clean Energy program.

Lawmakers rejected the Senate’s proposed increase in the RPS, incentives for electric vehicle adoption and a prohibition of the so-called “pipeline tax,” which would allow electric distribution companies to assess ratepayers for construction of the extra capacity needed by natural gas pipeline owners to supply power plants.

Power plant owners and marketers oppose the policy, but state officials say the capacity is needed to mitigate price spikes caused by tight supplies.

The state Department of Public Utilities has already determined that such supply contracts are allowed under existing state law. An LNG supplier and an environmental group, supported by the Massachusetts attorney general, have challenged that interpretation. A ruling is expected soon from the state’s Supreme Judicial Court. (See More Pipelines for New England: ‘Gold-plating’ or Necessity?)

The energy legislation was one of several bills that required last-minute action at the Capitol before the July 31 deadline, after the legislative calendar was cleared for the Republican and Democratic national conventions.

Both houses had agreed that Massachusetts needed to significantly increase the amount of clean energy used to comply with its Global Warming Solutions Act, passed in 2008. Nuclear and coal-fired generation have been closing in recent years, and ISO-NE says the region is facing tight energy supplies. (See Massachusetts Clean Power Bill Hit from All Sides.)

Gov. Charlie Baker, a Republican, had opposed the Senate’s inclusion of Cape Wind and the “pipeline tax” prohibition. The governor issued a statement Monday thanking lawmakers for completing the energy bill and other legislation before the deadline.

“As our administration carefully reviews all of the legislation that lawmakers worked diligently to reach consensus on, I will continue to work across the aisle with our partners in the legislature to make Massachusetts a better place,” Baker said.

Enviros Supportive; Generators Dismayed

The New England Power Generators Association criticized the bill, saying it would “dramatically increase costs for consumers and undermine billions of dollars in energy investments” in the state.

“This energy bill represents the single biggest step away from a competitive electricity market ever taken in New England,” NEPGA President Dan Dolan said. “Power plant owners in Massachusetts will now be barred from competing for nearly 60% of the commonwealth’s electricity market. Instead, consumers will be forced to pay for huge amounts of power at above-market prices, eliminating opportunities for innovation and cost containment.”

Members of the Alliance for Clean Energy Solutions, a coalition of clean energy companies, environmentalists and consumer representatives, had a different perspective.

“This bill is a huge step on the path to a clean energy future,” said Peter Shattuck, Massachusetts director of the Acadia Center. “The legislation solidifies the commonwealth’s leadership in reducing carbon pollution and will help reduce our growing over-reliance on natural gas.”

Janet Gail Besser, executive vice president of the Northeast Clean Energy Council, said the bill “will not only accelerate the deployment of clean energy, but will also serve to accelerate our economy by providing a stable policy framework for investors and developers of clean energy.”

Emily Norton, director of the Sierra Club’s Massachusetts chapter, praised the legislature for its boost to offshore wind and “for forcing utilities to fix methane leaks that are warming our planet, killing trees, jeopardizing safety and wasting consumer dollars.”

“However the bill does not go far enough in terms of transitioning us to a clean energy economy and a transportation sector powered by clean electricity rather than petroleum,” she continued. “It is also very disappointing … in spite of a unanimous Senate vote to prohibit a pipeline tax, to see that language missing from the final version. We look forward to making further gains toward climate justice in the next legislative session.”