No corner of the state’s energy industry seems to go untouched in the climate bill passed by the Massachusetts House and Senate on Monday, with just over one day left in the two-year legislative session.
The primary goal is environmental: slowing the rate of climate change with a road map to position the state as a “net zero” producer of carbon emissions over the next three decades. Assuming Governor Charlie Baker signs the sprawling bill, the ramifications for the business community could be significant.
Offshore wind: Few, if any, sectors of the economy benefit more from this bill than offshore wind. It’s been a slow start, for sure. Construction has yet to begin on a major offshore wind farm in New England, despite a 2016 state law designed to spur these projects. (A five-turbine plant off Block Island is the only one operating today.) The industry’s best hope has been Vineyard Wind, an 800-megawatt project planned for waters south of Martha’s Vineyard that could provide power for 400,000-plus homes. But it has been tied up by a permitting imbroglio within the Trump administration. Next in line is a similarly sized project, dubbed Mayflower Wind, also for waters south of the Vineyard.
The new climate bill requires utilities to enter into contracts for another 2,400 megawatts worth of offshore wind projects, on top of the 3,200 megawatts of capacity already either authorized or mandated, and speeds up the pace at which these contract auctions occur. The bill also accelerates requirements for utilities to buy more renewable power, essentially raising the mandate to 40 percent of their electricity supplies mix in 2030 (from 18 percent today). It sends a message that Massachusetts is serious about fostering offshore wind, as several East Coast states try to one up each other in an arms race for offshore turbines and the jobs the industry could bring.
Development: The commercial real estate sector isn’t necessarily opposed to climate change legislation. But NAIOP Massachusetts, its primary local trade group, expressed grave concerns about this one. The reason? The bill paves the way for cities and towns to adopt new codes that could require new buildings to be “net zero” in terms of emissions. It sounds a bit like the natural gas hookup bans that were gaining popularity among some municipalities until one such ban in Brookline ran into legal problems.
Senator Mike Barrett, one of the lead negotiators of the bill, said creative builders can find ways to offset natural gas usage, such as through solar power, for example. But NAIOP blasted the bill in a statement, saying it threatens the state’s “precarious economic recovery from the effects of the global crisis caused by the COVID-19 pandemic.” Of particular concern: the energy-intensive labs needed by life sciences companies, a proverbial golden goose for Greater Boston.
Heating oil: This sector faces new challenges from the gradual “electrification” of heating sources that could be imposed by these new building code rules, new sector-specific emissions targets, and other sections in the bill. The oil companies’ primary lobbyist on Beacon Hill, the Massachusetts Energy Marketers Association, fears new restrictions on installations of fossil fuel hookups as a result, although the group also remains hopeful that it can demonstrate the role of biodiesel in the state’s future energy mix.
Natural gas: The bill’s net-zero rules for buildings also could put a damper on natural gas hookups. But the bigger impact to the industry might be the way the legislation tries to wean the electricity grid off of gas, by prioritizing wind and solar. There’s no magic wand that can make this happen quickly, though: Natural gas still fuels roughly half of the electricity used in New England, and on some days, such as a moderate winter day like Monday, that number is more like two-thirds. (The bill also sets new safety rules for the industry, in the wake of the 2018 Merrimack Valley explosions.)
Solar: The increase in the state’s “renewable portfolio standard” benefits solar, too. But there are other benefits for the industry. Among them: changes that allow large businesses and commercial landlords to sell wholesale power generated from rooftop solar at retail rates, instead of lower wholesale rates. That shift should help more projects pencil out as fiscally sensible ventures. Notably, Associated Industries of Massachusetts had joined the solar industry in supporting the change. AIM and the industry had once been opponents in the perennial Beacon Hill debate about these so-called “net metering” credits.
Municipal light plants: The “munis,” as they are known, had long avoided the state’s clean-energy mandates. Not anymore. At their request, municipally owned electric utilities will now be held to their own emissions standards, moving to cleaner energy sources over time. Importantly for them, they can count nuclear power and hydropower for these goals. That’s particularly helpful for the city and town light plants that have decades-old contracts with the region’s two big nuclear power plants, Millstone and Seabrook.
Biomass: A controversial wood-burning plant proposed for Springfield will be harder to finance now, Barrett said. That’s because moratorium language in the bill is aimed at preventing the output from these kinds of biomass plants from qualifying as a non-carbon emitting resource, at least when municipal electricity purchases are concerned. Will it be enough to stop the Springfield plant? A spokesman for the developer, Caletta Renewable Energy, declined to comment.
MassCEC: Many leading players in the clean-tech industry had hoped the Legislature might provide a new funding mechanism to sustain the Massachusetts Clean Energy Center, a quasi-public agency that provides grants and other forms of assistance. On this front, the legislation appears to fall short. The bill provides $12 million a year to the agency for workforce development, primarily to prepare fossil fuel workers and small businesses owned by women and people of color for clean-tech jobs. But advocates want at least twice that level of funding. Expect the pleas for assistance from Beacon Hill to resume in the new legislative session.