Massachusetts Implements a Clean Peak Standard

On July 23, 2020, the Massachusetts Department of Energy Resources (“DOER”) filed final regulations implementing a “Clean Peak Energy Standard,” which formally went into effect on August 7, 2020.  The final regulations are the latest step towards making reality out of an idea enacted through the 2018 Act to Advance Clean Energy and make Massachusetts the first state to adopt such a program.

The idea is straightforward: use an RPS-like program to incentivize clean energy production during peak periods when the costs and emissions associated with generating energy are high.  But implementing that straightforward idea is not so simple.  The details matter, and DOER had to grapple with complex questions about eligibility, establishing relevant peak periods, how to value certificates, how to set minimum standard requirements, and how (if at all) to incorporate long-term contracting.  DOER engaged stakeholders and consultants to develop its regulatory approach.

It is exciting to be first, and the idea remains compelling.  Being first is also a challenge.  Towards the end of the regulatory process, there has been excitement about the new program; there have also been concerns about whether it will provide sufficient financial incentives—and certainty regarding those incentives—to drive the desired change in Massachusetts’ peak-period resource mix.  Comments submitted on DOER’s proposed regulations (which were amended before being finalized) are available here.  Now we get to see the program in action.