March 23, 2020

UPDATED: The Clean Peak Standard in Massachusetts (Finalized March 2020)

On March 20, 2020, the Massachusetts Department of Energy Resources (DOER) submitted the finalized standard to the Massachusetts legislature.  Below is an overview of the key components of the regulations; ESA’s full summary can be downloaded here.

What is the Clean Peak Standard?

  • A clean peak standard (CPS) is a new regulatory tool to reduce the costs and environmental impact of periods when electricity demand is highest–and generation tends to be the most polluting.
  • Like a renewable portfolio standard (RPS), a CPS requires a percentage of electricity delivered during peak hours to come from eligible clean peak resources.
  • Even for areas with high percentage of renewables penetration, those resources do not generally produce energy during peak demand periods and therefore the grid may still require significant reliance on expensive and polluting generation resources.

How will the Clean Peak Standard work in Massachusetts?

  • The CPS would require electric retailers to procure a minimum percentage of their annual electricity sales from renewable generation or energy storage.
  • Starting in 2020, the Minimum Clean Peak Standard will be 1.5% of retail electricity sales and increase at least 1.5% each year to at least 16.5% by 2030, with mechanisms to accelerate the annual increases of the Minimums Standard in the event of market oversupply.
  • Electric retailers will purchase Clean Peak Energy Certificates (CPECs) to meet the obligations.
  • Different resource types have varying multipliers for CPECs, ranging 25x to 0.01x in value.

What’s driving the Clean Peak Standard in Massachusetts?

  • Massachusetts is the first state to move forward with a clean peak standard.
  • Cost savings and reduced emissions are the key drivers behind the CPS.
    • A Massachusetts report found that 10% of hours on average accounted for 40% of annual electricity spend (over $3 billion in costs to ratepayers/year).
    • The state estimates that the proposal will save ratepayers $710 million net and reduce CO2 emissions by 560 thousand metric tons over ten years.

Download the full summary below.

DOWNLOAD THE SUMMARY


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