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Mass. State Agency Sets Clean Peak Compliance Percentage Applicable To Retail Suppliers For 2019

January 02,2019



Pursuant to Chapter 227 of the Acts of 2018 (the Act), the Massachusetts Department of Energy Resources (DOER) was required to, not later than December 31, 2018, determine the current percentage of kilowatt-hours sales to end-use customers in the commonwealth from existing clean peak resources during the seasonal peak load hours to establish a baseline minimum percentage of kilowatt-hours sales to end-use customers that shall be met with clean peak certificates beginning on January 1, 2019.

DOER said that, after reviewing available information, the statutory definition of clean peak resources, and a number of other factors, DOER has determined that approximately 0 MWh are being served by existing clean peak resources during peak load hours as of December 31, 2018. The definition of clean peak resources in the Act includes qualified RPS resources, qualified energy storage resources, and demand response resources. Both qualified energy storage systems and qualified RPS resources can only qualify if they have an in service date on or after January 1, 2019, thus no such resources are in existence as of December 31, 2018. The definition of demand response resources does not have a specified in service date requirement, however, the eligibility criteria to qualify as such a resource still needs to be established in regulation by DOER. Therefore, in the absence of such a definition, DOER cannot determine at this time that any such resources are currently in existence and providing energy during seasonal peak load hours, DOER said

In addition to establishing a baseline of 0 MWh of existing clean peak resources, DOER establishes the Minimum Standard percentage requirement for retail electricity suppliers in the 2019 compliance year at 0%. This models the approach used by DOER to set the initial RPS Class I Minimum Standard when the program originated in 2002. At that time, DOER established an "early compliance year" for calendar year 2002, in which the Minimum Standard percentage requirement was established as 0%, but allowed certificates to be generated, purchased, and settled at NEPOOL GIS by retail electricity suppliers for use towards requirements in subsequent calendar years. This allowed the market to commence, but delayed actual compliance filings from retail electricity suppliers by one year, DOER said

Similarly, any clean peak resource with a commercial operation date on or after January 1, 2019 that meets the standards of a clean peak resource during a seasonal peak period, as defined in the final promulgation of the clean energy peak standard regulation, may be permitted to generate clean peak certificates that can be purchased in compliance year 2019 by retail electricity suppliers for use towards compliance requirements in 2020 or 2021, DOER said

In order to fully set out the parameters of the Clean Peak Energy Standard, DOER will establish a regulation via a rulemaking that will be preceded by a more informal stakeholder process. DOER plans to commence its stakeholder process to design the Clean Peak Energy Standard in the next few weeks. The first step in this process will be to release a set of questions for stakeholder input to elicit feedback on regulation development and assist DOER in developing a straw proposal for the Clean Peak Standard regulation. These questions will be posted on DOER’s Clean Peak Standard webpage. Following its review of the feedback received, DOER will next release a detailed straw proposal and solicit comments on it prior to filing a draft regulation.

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