Newly passed Massachusetts bill aims to speed greening of power, buildings, vehicles

By Colin A. Young

JULY 21, 2022…..Clearing from their plate an issue that was a priority for both chambers and the subject of two months of complicated negotiations, the House and Senate made quick work Thursday of passing a compromise offshore wind, energy and climate policy bill that reshapes how Massachusetts gets offshore wind power and takes steps to hasten the state’s shift away from fossil fuels.

Massachusetts lawmakers, along with Gov. Charlie Baker, have committed the Bay State to reducing carbon emissions by at least 33 percent by 2025, at least 50 percent by 2030, at least 75 percent by 2040 and at least 85 percent by 2050, with tag-along policies required to get the state to net-zero emissions by the middle of the century. Getting electricity from renewable sources and switching things that run on fossil fuels to use that cleaner electricity is the state’s primary strategy for meeting those requirements.

“This legislation puts us on the path to achieve the goals the commonwealth set with the roadmap bill. Our 2050 decarbonization plan calls for the installation of between 15 to 20 gigawatts of offshore wind and 15 to 20 gigawatts of solar between 2030 and 2050 in order to achieve net-zero emissions by 2050. This legislation provides the tools that allow us to do that, and the bill helps us to avoid the worst effects of climate inaction,” Rep. Jeff Roy, the lead House negotiator, said.

The House passed a bill in early March that was essentially a deep dive on offshore wind policy while the Senate adopted legislation in April that more broadly covered climate and energy policy, touching upon offshore wind but also dealing with topics like climate resilience, solar policy and electric vehicles. A six-member conference committee had been stitching together the two bills since its first meeting on May 20.

Both lead negotiators, Roy and Sen. Michael Barrett, said they were pleased with the final product (H 5060) and each claimed victories for their own branch. Barrett said he was “very happy with the bill” and circulated multiple pages of Senate highlights in the final bill. Roy told reporters Thursday afternoon that “everything that we listed as priorities from the House perspective is in there.”

“Developing an offshore wind industry was the top priority and all of the elements associated with developing that industry remain in the bill. The Grid Modernization Planning Council is in there, the transmission pieces, including procurements and the Transmission Working Group, are part of this bill and everything that we had hoped would get in there is in there,” Roy said.

SHNS Video: Chairman Roy on Clean Energy Conference Report
The compromise bill passed the House on a 143-9 vote with one Democrat (Rep. Colleen Garry of Dracut) joining eight Republicans in opposition. In the Senate, the vote was 38-2 with one Republican (Minority Leader Bruce Tarr) joining the Senate’s 37 Democrats in support. Procedural votes will send the bill to Baker, who has mostly been a supporter of offshore wind and climate policy during his time in office.

Massachusetts has two offshore wind projects totaling about 1,600 megawatts under development and two more projects with contracts under review. If all four become operational — as is expected by the end of this decade — offshore wind will generate roughly 25 percent of Massachusetts’ current annual electricity demand, enough to power about 1.6 million homes, the Baker administration has said.

The compromise bill makes the Massachusetts Clean Energy Center the focal point for the state’s offshore wind efforts, everything from boosting academic research efforts and innovation to supporting a strong supply chain and dealing with barriers in the way of offshore wind companies.

MassCEC would award up to $35 million in annual tax incentives and make expenditures available to offshore wind companies to promote research and innovation, assist entrepreneurs, support port development and site remediation work, and to “stimulate increased financing” for the siting and expansion of permanent offshore wind manufacturing facilities in Massachusetts.

“These tax breaks are not going to be handed out profitably. We are not going to see the kind of scandals 10 years from now that have afflicted the use of tax incentives and tax loopholes in other areas of commerce in the state, occasionally, and sometimes in the country or the world,” Barrett said. “We’re really targeting these breaks to bona fide reintroduction of manufacturing capacity in the commonwealth of Massachusetts, and they are not going to be used unless they materially give people jobs in a manufacturing sector of the sort that the state does desperately need.”

The Massachusetts Offshore Wind Industry Investment Program would be specifically tasked to “develop and expand offshore wind industry-related employment opportunities in the commonwealth and to promote renewable energy-related economic development in the commonwealth by supporting and stimulating manufacturing and related supply chain capacity in the offshore wind industry.”

The compromise eschews the ratepayer charges that the House had pursued in its bill as a means of funding many of the new programs. Roy told reporters that, instead, the Legislature intends to fund the programs with money included in a massive economic development bill that is working through the House and Senate on its own track.

“If you look at the economic development bill that the Senate is taking up today, you’ll see a number of items in that that will fund some of the pieces for the climate bill. And when that reaches a conference committee, I’m sure that the House priorities will be part of the discussions,” he said. “That’s going to be the vehicle for funding these programs at this time.”

The conference committee bill adjusts the offshore wind price cap, which requires each new project to offer power at a lower price than the one before it, but did not eliminate it. Instead, it would come into play only if fewer than three bids come in for an offshore wind solicitation and the bill takes economic factors like inflation into account when applying the cap to solicitation rounds that result in two or fewer bids.

The negotiators generally adopted the Senate’s approach to updating the process for procuring new offshore wind projects. It would instruct the state Department of Energy Resources to choose a winning bid in consultation with an independent evaluator, removing the utility companies from that part of the equation as they become more involved in the developments themselves.

Abandoned was the House approach, which involved a selection committee that would have included members appointed by the House speaker and Senate president. The governor’s administration had raised conflict of interest concerns with that provision and the possibility that state lawmakers could be involved in picking a winning project.

“We listened to the arguments and were persuaded that taking those folks out of the mix was worth it. We did it. But we established the criteria that we want the group to look at to make these selections, we solidified the preferences that we wanted them to focus on — economic development being a big piece. And those made it through the final cut,” Roy said.

House lawmakers had been concerned that the MassCEC board was too heavily weighted in favor of the governor, who gets individual appointments as well as seats designated for Cabinet secretaries. The compromise bill would expand the 12-person board into a 15-person board, reduce the number of seats appointed by the governor from five to four, and give the House speaker and Senate president two appointments each to the board.

Offshore wind is a significant focal point of the bill, but the compromise legislation goes well beyond that sector to touch upon other, more broad aspects of the state’s pivot from fossil fuels to cleaner power.

By the end of 2035 under the bill, all new vehicles sold in Massachusetts would need to produce zero emissions and the MBTA would be required to purchase or lease only zero-emission buses by the end of 2030 and convert the entire bus fleet by the end of 2040.

“What we’re signaling to the market as well as to our own consumers is that all this EV stuff is aimed toward turning over the fleet in a way that greens the fleet. So we’re setting a very ambitious effort to get there, to get to a green fleet in terms of newly-purchased vehicles; the old ones are going to stay on the road for quite a while, but in terms of new sales within Massachusetts, we need to go green,” Barrett said. “But we’re all mindful … that this cannot be about the electric vehicle used by the individual family and, in particular, by the individual family of means. So we balance our commitment and our interest in ZEVs, zero-emission vehicles, by our interest in greening the T.”

The bill also calls for a public directory of buildings larger than 20,000 square feet and their annual energy usage, based on required reports from gas, electric and stream distribution companies and building owners. The provision is similar to requirements previously adopted by Boston and Cambridge.

It would also require the Mass. Department of Transportation to “create an anonymized and aggregated database of motor vehicle types and locations.” That town-by-town list would include the number of each type of vehicle registration — passenger fossil fuel, passenger hybrid, passenger zero-emissions, commercial fossil fuel, etc. — and the total number of vehicle miles traveled by each category of vehicle over a defined 12-month period.

Ten municipalities would be empowered to limit the use of fossil fuels in new construction as part of a “demonstration project,” a local option that Senate Democrats crafted in response to the Baker administration’s stretch energy code that does not authorize cities and towns to mandate that builders use all-electric heating.

That part of the bill is opposed by the home and commercial heating oil, propane and renewable biofuel industry. Michael Ferrante, who represents the Massachusetts Energy Marketers Association, told the News Service that his industry “would like to be part of the climate change plan” and sees a role for itself around liquid biofuel.

“What concerns the industry is the larger issue of electrification in general and with ISO-New England still heavily dependent on natural gas and when renewable numbers are not strong in their fuel mix, we just can’t understand why the state is so aggressively pushing and leaving us out of the equation,” he said.