IT’S OFTEN SAID that laws are like sausages – it’s best not to see them getting made.
But a proposal to change the way the state procures clean energy is worth keeping a close eye on, partly because the stakes are so high but also because a bit of scrutiny is likely to keep all parties honest.
The proposal didn’t follow the traditional legislative route – getting filed as a bill, vetted in a hearing before a committee, and then moving on to the full Legislature. Instead, the Healey administration broached the idea earlier this year but actual language didn’t emerge publicly until a climate bill was reported out of the Senate Ways and Means Committee midway through June.
Sen. Michael Barrett of Lexington, the point person on climate change in the Senate, said the provision was brought to him by the Healey administration, which was looking for a way to speed up clean energy procurements and incorporate them into the existing wholesale electricity markets.
The strategy calls for giving the Healey administration near-total control over when and how procurements are done, removing the Legislature and the state’s utilities from the process. The climate proposal would also do away with the practice of negotiating 20-year contracts directly with clean energy developers rather than having those developers sell their power through existing wholesale markets. Instead, the state would purchase a project’s clean energy attributes (a certificate of authenticity that retail electricity suppliers need to buy to prove a portion of their power is renewable) but the electricity itself would be sold through existing wholesale markets.
It’s a complicated process, but the goal of the Healey administration’s proposal is to start treating clean energy more like other forms of energy.
The New England Power Generators Association didn’t see it that way. “Rushing to pass a late-in-the-session, brand-new policy providing a blank contracting check creates potentially dramatic impacts on electricity markets and consumers,” the association said in a statement calling for the provision to be removed from the bill.
But after CommonWealth Beacon interviewed Healey administration officials and Dan Dolan of the association, and communicated their respective stances, the two parties talked privately and agreed on clarifying language. Dolan said on Monday he is now on board with the Healey proposal, calling it “a good first step.”
With Senate passage of the climate bill a week ago, the sausage-making process now shifts to the House, where leaders have said they favor a slimmed down bill focused primarily on energy siting reform.
Wind farm developers have also subtly in public statements and not-so-subtly in private communications raised concerns about the Healey administration’s new procurement approach, questioning whether doing away with long-term contracts will give investors enough confidence to put up the billions of dollars needed to build the projects.
Francis Pullaro, the executive director of RENEW Northeast, which represents wind farm developers, has proposed a number of reforms to the procurement process but suggested the more sweeping changes sought by the Healey administration should be studied more thoroughly, not rushed through at the end of this legislative session.
In a March 14 letter to Elizabeth Mahony at the Department of Energy Resources, he suggested the Healey administration’s approach could force wind farm developers to seek to recover a project’s full cost through the sale of its clean energy attributes.
Dolan said clean energy developers may have needed special long-term contracts to make their initial projects pencil out, but now it’s time to move on. He said every energy developer faces steep up-front costs and would like a long-term contract to remove the risk. “The question is, is that necessary?” Dolan asked. “I would say no.”
Stay tuned as the sausage-making continues.
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