Low-income communities could be saving money on energy while helping the climate, but the DPU is standing in the way

INTO THE RED: Climate and the fight of our lives

On Cape Cod and Martha’s Vineyard, there are 250 low- and moderate-income households that could be switched to solar power and heat pumps instead of fossil fuel. In the city of Boston, another 20,000 low-income households could be getting solar energy credits that would save them money now.

But both projects, which aim to cut heating costs for low-income households while also reducing carbon emissions, have hit a roadblock: bureaucratic holdups at the state’s Department of Public Utilities.

In the first case, the state’s utility regulator said the Cape Light Compact cannot use energy efficiency dollars for a solar power project because it doesn’t reduce energy use, it just changes the energy source. And the DPU said the Boston project cannot go forward without additional layers of approval — a process that will take an indeterminate amount of time.

“By now we could have had people getting discounts on their bills,” said the Rev. Mariama White-Hammond, the city of Boston’s chief of Environment, Energy and Open Spaces. “I just can’t understand why — when people are suffering and struggling to pay their bills — you would stop us from building them renewable energy, and then giving those credits to support people.”

A spokesman for the state’s Energy and Environment Agency, which oversees the DPU, says the department embraces the state’s climate goals but is bound by the limits of existing statutes, and needs to proceed with caution as it sets a template for renewable projects in the state. But advocates, developers, and supporters of the projects say the state’s energy regulator is stuck in old ways of evaluating energy projects at a time when it’s supposed to be doing things differently.

Earlier this year, when Governor Charlie Baker signed landmark climate legislation into law, the DPU saw its core mission change. Instead of focusing solely on the safety and affordability of electric, natural gas, and water utilities, the department now also has to take into account equity and the state’s climate goals.

These low-income renewables projects meet both objectives, advocates say, and the DPU’s failure to quickly approve them may be indicative of growing pains, as the agency figures out how to meet its new requirements while wading through systemic changes that must happen if the state is going to successfully get to net-zero emissions by 2050.

Ultimately, the DPU logjams may need to be resolved either by the Legislature — one proposed bill would set a timeline for the DPU to hit certain solar benchmarks — or by the Supreme Judicial Court, which hears appeals of DPU decisions.

In the meantime, vulnerable homeowners are being left behind, and the state is missing out on opportunities for greener energy.

In the case of those 250 households on the Cape and Vineyard, Cape Light Compact has proposed a program that would install solar panels, battery storage, and heat pumps onto homes, paid for with energy efficiency funds from the Mass Save program. The program would switch homeowners off of oil, propane, or electric resistance heat, which is far less efficient than modern heat pumps. It would also meet the criteria of the Mass Save program, which balances the cost of a program with its eventual savings and its potential for addressing equity and reducing greenhouse gas emissions.

“We felt the Cape and Vineyard [were] uniquely positioned because we have higher oil and propane use,” said Maggie Downey, the administrator of the Cape Light Compact, a municipal aggregator. “We were also, at the same time, working on solar, and it became clear to us that low- and moderate-income customers were being left behind.”

Attorney General Maura Healey has said she supports the Cape and Vineyard plan. The Department of Energy Resources has also commended the initiative, saying it could help low- and moderate-income customers electrify their homes, which usually comes with a high price tag, and that the program supports the state’s climate goals.

But in an order from November, the DPU essentially eviscerated the proposed project, stating that it is illegal because it uses energy efficiency dollars in an unauthorized way.

“This is a nonsensical thing for the DPU to say,” said Caitlin Peale Sloan, a senior attorney at the Conservation Law Foundation, adding that the department’s approach ultimately favors one interpretation of the law over another, without a clear reason.

According to the state, the Green Communities Act of 2008 requires that energy efficiency dollars must be used for programs that save energy, but installing solar doesn’t save energy — it just changes the kind of energy being consumed. Same goes for the battery storage that is part of the Cape and Vineyard plan.

But the Cape Light Compact disagrees. In an appeal filed with the Supreme Judicial Court, it points to a different part of the law — added in 2018 — that says energy efficiency funds can be used for “programs that result in customers switching to renewable energy sources or other clean energy technologies.”

The DPU’s decision-making on a program aimed at delivering solar credits for 20,000 low-income ratepayers in Boston seems similarly cloudy.

“The very simple thing is that bureaucracy holds up jobs, low-income customer discounts, tax and rent payments to municipalities, and investments in infrastructure,” said Aaron Culig, the president of NextGrid Inc., the renewable power company behind the proposed Boston plan.

When he started coordinating with the city of Boston in late 2020, he expected to quickly deliver 100 megawatts of solar to city, which would then offer discounted credits to low-income residents as part of Boston’s Community Choice Energy program. That program provides an alternative to offerings from Eversource and allows Boston residents to choose to pay a bit more than the program’s basic rate for more renewable power.

The savings were modest — on the order of $125 to $150 a year — but as low-income households grappled with the COVID crisis, the city hoped that any bit of savings would help.

Boston officials decided to add the solar credit program after the energy department revised a regulation to allow for low-income solar to be offered via municipal aggregation. Because that request had come from the state, Boston was under the impression that they could add the low-income discount to their existing offering, which had already been approved by the DPU, without jumping through additional bureaucratic hoops.

When Boston announced its low-income community solar discount on Dec. 4, 2020, state Energy and Environment Affairs Secretary Kathleen Theoharides voiced her support, commending the city for finding an innovative way to use the administration’s solar incentive program to save low-income residents money.

But a week and a half after Boston’s announcement, the DPU responded with a cease-and-desist letter, alerting the city that since the low-income offering hadn’t been part of the city’s initial solar program, it did not have the proper approval.

“What’s frustrating is it’s blocking our ability to do many more things, and if we could really move in this direction we could start making significant savings for people,” said White-Hammond. “It’s not just the one project, it’s the precedent that it sets.”

Boston is still arguing to the DPU that it did, in fact, have the authority to offer the low-income discount but, for now, the initiative is on hold.

Craig Gilvarg, director of communications for the Environment and Energy Administration, said the Baker administration welcomes Boston’s effort, but that “at the same time, the Department of Public Utilities has a statutory requirement to review and approve all aspects of a municipal aggregation program, including discounted rates, to ensure that all plans provide universal access, equitable treatment of customers, reliability, and fully comply with Massachusetts law.”

That process is underway, as the DPU considers how to get solar power to low-income customers. But a decision is not expected any time soon.

Sabrina Shankman can be reached at sabrina.shankman@globe.com. Follow her @shankman.