New England States Embrace Regional Procurement for Renewable Energy

Six New England states led by Massachusetts plan to coordinate purchases of renewable energy, leveraging their scale for better pricing and encourage more clean energy diversity in the region.

The move follows Massachusetts’ own move to encourage a competitive bidding process for renewable energy projects.

Under the resolution passed unanimously during the New England Governor’s Conference in late July 2012, the New England States Committee on Electricity (NESCOE) will develop a request for proposals to be issued in 2013.

The resolution directs "NESCOE and their regulatory and policy officials to implement the work plan and any regulatory proceedings or procedures as are necessary or appropriate to execute the coordinated competitive regional procurement of renewable power, with the goal of issuing a solicitation for procurement by the end of December 2013."

"We are encouraged to see New England’s commitment to creating mechanisms that promote large-scale renewable generation projects," says Jeff Grybowski, Senior Vice President for Strategic and External Affairs at Deepwater Wind, an offshore wind development company with projects in multiple New England states. "The clean energy industry is growing and developing in ways that bring down costs and create a solid foundation for the region’s energy security. This type of regional planning shows the government commitment needed to spur continuing development in New England."

NESCEO represents Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.

These states (along with Maryland, Delaware and New York) are also part of the Regional Greenhouse Gas Initiative (RGGI), a regional cap-and-trade program that added more than $1.6 billion in economic value back to the states during the past three years. New Jersey was originally part of RGGI, but it pulled out last December and Governor Christie just thwarted an attempt to rejoin in July.

According to NESCOE research published in the New England Governors Renewable Energy Blueprint, offshore and onshore wind energy alone could provide more than 12,000 megawatts (MWs) of electricity, enough electricity to supply 24% of the region’s electricity demand.

Massachusetts Mandates Competitive Bidding

The regional resolution follows Massachusetts’ move to approve a new clean energy plan.

The state’s primary renewable energy goals include 250 MWs of solar by 2017 and 2,000 MWs of wind by 2020. The new strategy doesn’t change those overall goals but it requires state utilities to work together to create new 10-year to 20-year contracts to meet at least 4% of total customer demand through renewable energy. (It doesn’t affect spot purchases.)

Perhaps even more significant, the new bill requires competitive bidding for those contracts, a measure that was at least partially inspired by fights over the troubled Cape Wind project. The first power purchase agreement for the nation’s first offshore wind project set a price for the energy that was more than double then-current retail rates.

The new Massachusetts law also expands the cap on the state’s net metering program from 3% to 6%.

That’s good news for businesses and residential customers that want to sell excess energy back to the grid.

A new report from Environment Massachusetts shows that the pace of solar projects structured to allow this practice grew more in the first five months than for the Commonwealth’s entire history through 2010. Since the net metering program was originally introduced, solar installations have increased 30-fold.

As you might expect, Boston had the most solar installations (157). But Falmouth and cities across Cape Cod and the Island region were the most activity in terms of development activity. Chilmark hosts the most capacity and installations per capita.

For more about the top solar cities in Massachusetts:

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