The Commonwealth of Massachusetts Executive Office of Energy and

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					                      The Commonwealth of Massachusetts
                        Executive Office of Energy and Environmental
                                            Affairs
   Deval L. Patrick
     GOVERNOR

  Timothy P. Murray
LIEUTENANT GOVERNOR
                                                                                              Tel: (617) 626-1000
    Ian A. Bowles                                                                            Fax: (617) 626-1181
     SECRETARY                                                                        http://www.mass.gov/envir

    FOR IMMEDIATE RELEASE                               Contact:       Lisa Capone
    Date: January 6, 2009                                              (617) 626-1119
                                                                       Lisa.capone@state.ma.us
                                                                       Robert Keough
                                                                       (617) 626-1109
                                                                       Robert.keough@state.ma.us

     Patrick Administration Announces Rules Providing More Support
                 for Renewable and Alternative Energy
     Regulations double rate of growth for new renewable energy generation, support
        existing renewable facilities, and promote innovative energy technologies
    BOSTON – The Department of Energy Resources (DOER) has released regulations expanding
    support for renewable energy and alternative energy technologies mandated by the Green
    Communities Act, the comprehensive energy reform legislation enacted last year.

    “These regulations implement key provisions of the Green Communities Act for promoting
    renewable and alternative energy technologies,” said DOER Commissioner Philip Giudice. “The
    support they provide for expanding renewable energy capacity and investing in innovative
    energy technologies will move Massachusetts toward the clean energy future Governor Patrick
    envisions for the Commonwealth.”

    The Green Communities Act directed changes in the state’s Renewable Energy Portfolio
    Standard (RPS) to double the rate of increase in the use of new renewable energy, create a new
    “Class II” RPS to support the continued operation of older (pre-1998) renewable energy
    generating facilities, and establish a new Alternative Energy Portfolio Standard (APS) to support
    other innovative energy technologies. Required by the Green Communities Act to be in place by
    January 1, 2009, these new programs will be governed by these “emergency” regulations,
    developed through a stakeholder process that took place last fall, for up to three months, while
    the Department holds a public hearing and receives comment prior to promulgating final
    regulations.

    Principal provisions of the regulations include:
      RPS Class I Renewables: The rate of increase in the renewable energy required of
       utilities and other electricity suppliers from renewable energy generating facilities created
       since 1998, formerly known as “New Renewables,” rises from 0.5 percent of sales
       annually to 1 percent per year; that is, from 4 percent in 2009 to 15 percent in 2020 and
       continuing thereafter. Geothermal, hydroelectric, and marine and hydro-kinetic
       (including wave and tidal) energy are now eligible technologies under RPS Class I, as is
       algae, as an eligible biomass fuel. In addition, liquid biofuels eligible for RPS Class I are
       required to meet lifecycle greenhouse gas emissions and other standards set by the Clean
       Energy Biofuels Act of 2008. Compliance by utilities and other electric suppliers with the
       RPS requirement will be by purchase of the renewable attributes of electricity generated
       by eligible renewable energy facilities in the form of Renewable Energy Certificates
       (RECs) or by making an Alternative Compliance Payment (ACP). The ACP rate began at
       $50 per megawatt-hour of RPS obligation in 2003 and is currently $58.58, changing each
       year with the Consumer Price Index. In accordance with findings of the study of
       renewable energy imports required by the Green Communities Act, all newly qualified
       renewable energy generating units are prohibited from committing their capacity to non-
       ISO-New England control areas, and non-intermittent generating units (biomass, landfill
       gas, and certain hydro) must commit their capacity to ISO-New England as a condition of
       eligibility for RECs in the Massachusetts market. Operators of units that receive REC
       revenue for imports into ISO-NE must also attest that they are not engaged in “round-
       tripping,” or selling renewable energy into the New England market while exporting
       fossil-fuel-generated energy from units in the ISO-New England control area.
      RPS Class II Renewables: This new class of RPS, created by the Green Communities
       Act to support the continued operation of older renewable energy facilities, is limited to
       generation that went online on or before December 31, 1997. Utilities and other
       electricity suppliers are required to purchase RECs from Class II facilities equal to at
       least 3.6 percent of sales, or to make Alternative Compliance Payments per megawatt-
       hour to meet the Class II RPS obligation. The initial ACP rate is $25 per megawatt-hour
       in 2009, and will be adjusted each year with the Consumer Price Index.
      Alternative Energy Portfolio Standard: Established by the Green Communities Act,
       the new Alternative Energy Portfolio Standard (APS) supports innovative energy
       technologies that, while not renewable, advance clean energy goals by means of
       efficiency and reduced fossil fuel-based energy generation while meeting strict
       environmental standards. Eligible technologies include Combined Heat and Power
       (CHP), which generates electricity and useful thermal energy at the same time, greatly
       improving the efficiency of fuel use for both heat and power. Another eligible technology
       is Flywheel Energy Storage, which can improve the flow of electricity on the power grid
       by storing excess power for release when needed. Certain other APS-eligible
       technologies, such as coal gasification with carbon capture and sequestration, will be
       governed by regulations promulgated when the technologies are more fully developed.
       Initial APS minimal standard will be 0.75 percent of sales in 2009 and rising by 0.5
       percent per year through 2015. After that, the standard will rise by 0.25 percent per year,
       reaching 5 percent in 2020, and continuing upward at 0.25 percent per year thereafter.
       Compliance by utilities and other electricity suppliers will be by means of APS
       Certificates or Alternative Compliance Payments, at the rate of $20 per megawatt-hour of
       obligation in 2009 and adjusted each year thereafter according to the CPI.

DOER is expected to promulgate regulations on additional technologies mandated by the Green
Communities Act under RPS Class II and APS by this spring.
“By increasing our commitment to renewables, ensuring strict carbon emission standards are met
before receiving state support, and creating new incentives for efficient power generation such as
Combined Heat and Power, the state is taking several important steps down the clean energy
highway,” said Sam Krasnow, Policy Advocate at Environment Northeast (ENE).

“Veolia Energy congratulates the Department of Energy Resources for its creative new
Alternative Energy Portfolio Standard regulations,” said Stewart A. Wood, President and Chief
Executive Officer, Veolia Energy North America. “By encouraging Combined Heat and Power
and other innovative energy efficient technologies, these regulations will play a major role in
reducing the Commonwealth’s greenhouse gas emissions. The Department has crafted a set of
rules designed to incentivize the wide variety of innovative energy solutions that today’s
pressing climate change concerns require”.

“The Department of Energy Resources has demonstrated its leadership and vision in crafting
these regulations,” said Bill Capp, President and CEO of Beacon Power. “Flywheel energy
storage is a proven grid-stabilizing resource that provides responsive performance without
consuming fuel or producing any direct greenhouse gas emissions. These benefits not only make
our power grid more reliable, they also support a more sustainable, carbon-free future.”

The new RPS and APS emergency regulations can be found at
http://www.mass.gov/energy/rps_regs. The date, time, and place for a public hearing will be
announced in the next few weeks.


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