(1)
Purpose, Authority and Scope. The purpose of 310 CMR
7.75, promulgated in conjunction with
310
CMR
7.74, is to assist the Commonwealth in
achieving the greenhouse gas emissions reduction goals adopted pursuant to
M.G.L. c. 21N, § 3(b), by establishing a clean energy standard (CES) that
will increase the level of clean electricity that is purchased from the
regional electric grid for consumption in Massachusetts. To achieve those
goals, the Executive Office of Energy and Environmental Affairs (EEA) and the
Department, pursuant to M.G.L. c. 21A, §§ 2 and 8 and M.G.L. c. 21N
hereby jointly promulgate 310 CMR
7.75 following consultation with the
Department of Energy Resources (DOER) and based on the considerations specified
in M.G.L. c. 21N, § 3(c). In exercising their broad authority and
discretion under M.G.L. c. 21N, § 3(c), EEA and the Department have
determined that establishing the CES, along with the Commonwealth's other
climate programs and policies, will ensure achievement of the greenhouse gas
emissions limits as established under M.G.L. c. 21N, and that the 310 CMR
7.75
levels are consistent with, and take account of, regional programs such as the
Regional Greenhouse Gas Initiative (RGGI) and the Renewable Portfolio Standard
(RPS). The Department is also consolidating in 310 CMR
7.75 a requirement
previously codified at
310 CMR
7.71(9) for retail sellers
of electricity to report statewide greenhouse gas emissions and to monitor and
ensure compliance with the reporting provisions of M.G.L. c. 21N, §
2(a)(5). 310 CMR
7.75 is also promulgated pursuant to M.G.L. c. 21A, § 16
and M.G.L. c. 111, §§ 2C and 142A through 142E.
(2)
Definitions. The
terms used in 310 CMR
7.75 are defined in 310 CMR
7.75(2) and
310 CMR
7.00: Definitions. Where a term is defined in both
310 CMR
7.00: Definitions and 310 CMR
7.75, the definition in
310 CMR
7.75 shall apply.
Biogenic Greenhouse Gas Emissions.
Emissions of carbon dioxide that result from the combustion of biogenic (plant
or animal) material, excluding fossil fuels.
Business Day. Monday through Friday,
exclusive of state and federal legal holidays.
Carbon Dioxide Equivalent. The amount
of carbon dioxide by weight that would produce the same amount of global
warming impact as a given weight of another greenhouse gas.
Certificates Obligation. A term
defined in the NEPOOL GIS operating rules at Rule 4.1(b).
CES Alternative Compliance Credit. A
credit obtained by a retail seller of electricity upon making a CES alternative
compliance payment. Such credit is used to document compliance with 310 CMR
7.75(4)(a). One unit of credit shall be equivalent to one clean generation
attribute.
CES-E Alternative Compliance Credit. A
credit obtained by a retail seller of electricity upon making a CES-E
alternative compliance payment. Such credit is used to document compliance with
310 CMR 7.75(4)(b). One unit of credit shall be equivalent to one clean
existing generation attribute.
CES Alternative Compliance Payment (CES
ACP). A payment of a certain dollar amount per MWh, resulting in
the issuance of CES alternative compliance credits, which a retail seller of
electricity may submit to the Department in lieu of providing clean generation
attributes required under 310 CMR 7.75(4)(a).
CES-E Alternative Compliance Payment (CES-E
ACP). A payment of a certain dollar amount per MWh, resulting in
the issuance of CES-E alternative compliance credits, which a retail seller of
electricity may submit to the Department in lieu of providing clean existing
generation attributes required under 310 CMR 7.75(4)(b).
CES Statement of Qualification. A
written document from the Department that qualifies a generation unit as a
clean generation unit, or that qualifies a portion of the annual electrical
energy output of a generation unit as clean generation.
CES-E Statement of Qualification. A
written document from the Department that qualifies a generation unit as a
clean existing generation unit, or that qualifies a portion of the annual
electrical energy output of a generation unit as clean existing
generation.
Clean Existing Generation. The
electrical energy output, or that portion of the electrical energy output,
excluding any electrical energy utilized for parasitic load of a clean existing
generation unit, that qualifies under:
(a) the special provisions for a generation
unit located in a control area adjacent to the ISO-NE control area, pursuant to
310 CMR
7.75(7)(b); or
(b) the
special provisions for clean existing generation units, pursuant to 310 CMR
7.75(7)(c); or
(c) any other
applicable provision of 310 CMR
7.75.
Clean Existing Generation Attribute. A
generation attribute of the electrical energy output of a specific clean
existing generation unit that derives from the unit's production of clean
existing generation.
Clean Existing Generation Unit. A
nuclear or hydroelectric generation unit that:
(a) is located in Massachusetts, or in a
jurisdiction that exported at least 4,000,000 MWh of electricity to
Massachusetts in at least two years from 2001 through 2016, on a net annual
basis, as reflected in the state greenhouse gas emissions inventories published
annually by the Department;
(b) has
a nameplate capacity greater than 30 megawatts; and
(c) commenced commercial operation before
January 1, 2011.
Clean Generation. The electrical
energy output, or that portion of the electrical energy output, excluding any
electrical energy utilized for parasitic load of a clean generation unit, that
qualifies under:
(a) the special
provisions for a generation unit located in a control area adjacent to the
ISO-NE control area, pursuant to 310 CMR
7.75(7)(b); or
(b) any other applicable provision of 310 CMR
7.75 or
225 CMR
14.00: Renewable
Energy Portfolio Standard - Class I.
Clean Generation Attribute. The
generation attribute that is either:
(a) a generation attribute of the electrical
energy output of a specific clean generation unit that derives from the unit's
production of clean generation; or
(b) any other generation attribute that is
retained pursuant to St. 2008, c. 169, § 83D(h), as inserted by St. 2016,
c. 188, § 12. All generation attributes retained pursuant to St. 2008, c.
169, § 83D(h), as inserted by St. 2016, c. 188, § 12, including such
generation attributes that derive from generation units that do not satisfy all
limitations in 310 CMR
7.75(7), are clean generation attributes.
Clean Generation Unit. A generation
unit or aggregation that has received a CES statement of qualification from the
Department, or that has received an RPS statement of qualification.
Commercial Operation Date. The date
that a generation unit first produces electrical energy for sale within the
ISO-NE control area or within an adjacent control area. In the case of
transmission capacity that is used to transmit clean energy, the date on which
the transmission capacity first transmitted energy into the ISO-NE control area
or an adjacent control area.
Compliance Filing. A document filed
annually by a retail seller of electricity in a format determined by the
Department documenting compliance with 310 CMR 7.75(4), submitted no later than
July 1st, or the first business day thereafter, of
the subsequent compliance year.
Compliance Year. A calendar year
beginning January 1st and ending December
31st, for which a retail seller of electricity that
is not a Municipal Electric Department or Municipal Light Board must
demonstrate that it has met the requirements of 310 CMR 7.75(4) and (5).
Control Area. A geographic region in
which a common generation control system is used to maintain scheduled
interchange of electrical energy within and without the region.
Dedicated Transmission Line. A
transmission line with a commercial operation date after December 31, 2017 that
is not electrically connected to any generation unit that is not a clean
generation unit.
Emitting Electricity Generators.
Electricity generators that are powered by any fossil or biogenic fuels.
Emitting Megawatt Hours. Megawatt
hours that are generated by emitting electricity generators.
End-use Customer. A person or entity
in Massachusetts that purchases electrical energy at retail from a retail
seller of electricity, except that a generation unit taking station service at
wholesale from ISO-NE or self-supplying from its owner's other generating
stations, shall not be considered an end-use customer.
Generation Attribute. A non-price
characteristic of the electrical energy output of a generation unit including,
but not limited to, the generation unit's fuel type, emissions, vintage and
eligibility for renewable or clean energy programs.
Generation Unit. A facility that
converts a fuel or an energy resource into electrical energy.
GIS Certificate. An electronic record
produced by the NEPOOL GIS that identifies generation attributes of each MWh
accounted for in the NEPOOL GIS.
Greenhouse Gas. Any chemical or
physical substance that is emitted into the air and that the Department may
reasonably anticipate will cause or contribute to climate change including, but
not limited to, carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,
perfluorocarbons and sulfur hexafluoride.
ISO-NE. ISO New England Inc., the
independent system operator for New England, the regional transmission
organization for most of New England, which is authorized by the Federal Energy
Regulatory Commission (FERC) to exercise for the New England Control Area the
functions required pursuant to the FERC's Order No. 2000 and the FERC's
corresponding regulations.
ISO-NE Settlement Market System. The
ISO-NE's electronic database system into which all real-time load and
generation data are entered and from which such data are provided to the NEPOOL
GIS.
Lifecycle Greenhouse Gas Emissions.
The aggregate quantity of greenhouse gas emissions including, but not limited
to, direct emissions and significant emissions from land use changes, and
temporal changes in forest carbon sequestration and emissions resulting from
biomass harvests, regrowth, and avoided decomposition as determined by the
department, related to the full fuel lifecycle, including all stages of fuel
and feedstock production and distribution, from feedstock generation or
extraction through the distribution and delivery of the finished fuel to the
ultimate consumer, where the mass values for all greenhouse gases are adjusted
to account for their relative global warming potential.
Massachusetts Department of Energy Resources or
DOER. The Massachusetts agency established pursuant to M.G.L. c.
25A, §§ 1 through 13.
Megawatt-hour (MWh). A unit of
electrical energy or work equivalent to one million watts of power operating
for one hour.
Municipal Electric Department (MED). A
municipal electric department as defined in M.G.L. c. 164A, § 1.
Municipal Light Board (MLB). A
municipal light board as defined in M.G.L. c. 164A, § 1.
NEPOOL GIS. The NEPOOL Generation
Information System, which includes a generation information database and
certificate system, operated by the New England Power Pool (NEPOOL), its
designee or successor entity, that accounts for generation attributes of
electrical energy consumed and generated within, imported into, or exported
from the ISO-NE control area.
NERC Tag. A document that identifies
an electrical energy interchange transaction and its associated participants,
assigned in accordance with rules set forth by the North American Electric
Reliability Corporation (NERC), a nonprofit corporation granted by the FERC the
legal authority to enforce mandatory reliability standards for the U.S. bulk
power system, subject to FERC oversight.
Non-emitting Electricity Generators.
Electricity generators powered by hydro, nuclear, ocean, solar or wind
power.
Non-emitting Megawatt Hours. Megawatt
hours that are generated by non-emitting electricity generators.
Operator. Any person or entity that
has charge or control of a generation unit subject to 310 CMR 7.75(7) through
(9) including, without limitation, a duly authorized agent or lessee of the
owner, or a duly authorized independent contractor.
Owner. Any person or entity that,
alone or in conjunction with others, has legal ownership, a leasehold interest,
or effective control over the real property or property interest upon which a
generation unit is located, or the airspace above said real property including,
without limitation, a duly authorized agent of the owner. For the purposes of
310 CMR 7.75, owner does not mean a person or entity holding legal title or
security interest solely for the purpose of providing financing.
Retail Electricity Product. Electrical
energy offering that is distinguished by its generation attributes and that is
offered for sale by a retail seller of electricity to end-use customers.
Retail Seller of Electricity or Retail
Seller. A competitive supplier licensed by the Department of
Public Utilities or, as each is defined in M.G.L. c. 164A, § 1, an
electric utility, municipal electric department or municipal light board that
is connected to the regional electric grid.
RPS Alternative Compliance Credit. A
credit obtained by a retail seller of electricity upon making a payment
pursuant to
225 CMR
14.08(3): Alternative
Compliance, and used to comply with
225 CMR
14.07: Renewable Energy Portfolio Standard -
Class I.
RPS Class I Renewable Generation Unit.
A generation unit or aggregation that has received a statement of qualification
as an RPS Class I renewable generation unit from DOER pursuant to
225 CMR 14.00: Renewable
Energy Portfolio Standard - Class I.
RPS Statement of Qualification. A
written document issued by DOER pursuant to
225
CMR 14.06: Qualification Process for RPS
Class I, Solar Carve-out Renewable Generation Units, and Solar Carve-out II
Renewable Generation Units that qualifies a generation unit or aggregation as
an RPS Class I qualified generation unit, or that qualifies a portion of the
annual electrical energy output of a generation unit.
Short Ton. 2000 pounds or 0.9072
metric tons.
(5)
Compliance Procedures for Retail Sellers That Are Not MEDs or
MLBs.
(a)
Standard
Compliance. Each retail seller subject to 310 CMR
7.75(4) shall be
deemed to be in compliance with 310 CMR
7.75 if the information provided in the
compliance filing submitted pursuant to 310 CMR
7.75(5) is true and accurate
and demonstrates compliance with 310 CMR
7.75(4). Such retail seller shall
demonstrate, using a form provided by the Department or DOER, that clean
generation attributes and clean existing generation attributes used for
compliance have not otherwise been, nor will be, sold, retired, claimed, used
or represented as part of electrical energy output or sales, or used to satisfy
obligations in jurisdictions other than Massachusetts.
(b)
Banked
Compliance.
1. Beginning in 2021,
a retail seller subject to 310 CMR
7.75(4)(a) may use clean generation
attributes produced in either or both of the two prior compliance years,
subject to the limitations in 310 CMR
7.75(5)(b) and provided that the retail
seller is in compliance with 310 CMR
7.75 for all previous compliance years. In
addition, the retail seller shall demonstrate, using a form provided by the
Department or DOER, that such attributes:
a.
Were in excess of the clean generation attributes needed for compliance in the
compliance year in which they were generated, and that such excess attributes
have not previously been used for compliance with 310 CMR
7.75 or
225 CMR
14.00: Renewable
Energy Portfolio Standard - Class I;
b. Do not exceed 30% of the clean generation
attributes needed by the retail seller for compliance with 310 CMR
7.75(4)(a)
in the year they were generated, in excess of the clean generation attributes
needed for compliance with
225 CMR
14.07(1): RPS Class I
Minimum Standard, subject to 310 CMR
7.75(5)(b)1.d.;
c. Were produced during the compliance year
in which they are claimed as excess by the generation of electrical energy sold
to end-use customers in the ISO-NE control area; and
d. Have not otherwise been, nor will be,
sold, retired, claimed or represented as part of electrical energy output or
sales, or used to satisfy obligations in jurisdictions other than
Massachusetts.
2. Any
RPS-eligible renewable generation attributes claimed for compliance with RPS
pursuant to
225 CMR
14.08(2): Banked Compliance
and used to comply with
225 CMR
14.07: Renewable Energy Portfolio Standard -
Class I in a particular year shall be counted toward compliance with 310 CMR
7.75 in that year.
3. A retail
seller subject to 310 CMR
7.75(4)(b) may not use clean existing generation
attributes produced in prior compliance years to comply with said provision.
(c)
Alternative Compliance. Any RPS alternative compliance
credits claimed pursuant to
225 CMR
14.08(3)(a) and used to
comply with
225 CMR
14.07: Renewable Energy Portfolio Standard -
Class I shall be counted toward compliance with 310 CMR
7.75(4)(a). A retail
seller subject to 310 CMR
7.75(4) may discharge its obligations under 310 CMR
7.75(4)(a), in whole or in part, by making a CES ACP to the Department. A
retail seller subject to 310 CMR
7.75(4) may discharge its obligations under
310 CMR
7.75(4)(b), in whole or in part, by making a CES-E ACP to the
Department. Such funds shall be deposited in a segregated account, which may be
the same account established to receive auction proceeds under
310
CMR
7.74(6)(h)1.a.i.,
administered by a Trustee appointed by EEA and the Department, and used for the
purposes set forth in 310 CMR
7.75(5)(c)2.
1.
Alternative Compliance Procedures.
a.
Procedures for CES
ACP. A retail seller subject to 310 CMR
7.75(4) shall receive CES
alternative compliance credits from the Department, subject to the following:
i. The quantity of credits, specified in MWh,
that can be applied to its obligations under 310 CMR
7.75(4)(a) shall be
determined by calculating the ratio of the total of CES ACPs paid for the
compliance year to the CES ACP rate for that compliance year.
ii. The CES ACP rate in dollars shall be 0.75
times the rate calculated annually by DOER pursuant to
225 CMR
14.08(3)(a)2. for years 2018
through 2020, 0.50 times the rate calculated annually by DOER pursuant to
225 CMR
14.08(3)(a)2. for year 2021,
and $35/MWh for years 2022 through 2050.
b.
Procedures for CES-E
ACP. A retail seller subject to 310 CMR
7.75(4) shall receive
CES-E alternative compliance credits from the Department subject to the
following:
i. The quantity of credits,
specified in MWh, that can be applied to its obligations under 310 CMR
7.75(4)(b) shall be determined by calculating the ratio of the total of CES-E
ACPs paid for the compliance year to the CES-E ACP rate for that compliance
year.
ii. The CES-E ACP rate in
dollars shall be 0.10 times the rate specified by DOER pursuant to
225 CMR
14.08(3)(a)2. for year 2021,
and $10/MWh for years 2022 through 2050.
2.
Use of Funds.
Funds deposited pursuant to 310 CMR
7.75(5)(c) shall be expended to further the
goals of M.G.L. c. 21N by supporting:
a.
programs and projects to reduce greenhouse gas emissions to mitigate the
impacts of climate change including, but not limited to, clean energy and
vehicle electrification projects;
b. programs or projects to support adaptation
to the impacts of climate change;
c. mitigation or adaptation programs or
projects involving communities that are already adversely impacted by air
pollution including, but not limited to, environmental justice communities;
and
d. for the administration of
any such programs or projects. Such funds may also be used for the
administration of 310 CMR
7.75.
Such funds shall be expended at the direction of the Trustee,
in consultation with EEA and the Department. The Trustee, EEA and the
Department may consult with and enter into agreements with other agencies
within the Energy and Environmental Affairs Secretariat to assist in the
administration and expenditure of such funds.
(d)
Treatment of Existing Contracts Executed as of August 11,
2017. Notwithstanding 310 CMR
7.75(4), in determining the total
CES-qualified MWh applied to each retail seller subject to 310 CMR
7.75(4) in
2018 and 2019, the Department shall not include that portion of electrical
energy sales that were subject to a contract executed or extended prior to
August 11, 2017, provided that the electricity was sold at a price specified in
the contract and the retail seller provides the Department with satisfactory
documentation of the terms of such contracts. Contracted electrical energy
delivered after December 31, 2019 shall be included in the CES, regardless of
the contract's date of execution or extension.
1. In order to demonstrate eligibility of
contracts for exemption under 310 CMR
7.75(5)(d), retail sellers shall provide
the relevant documentation by December 31, 2017 in accordance with a form
prescribed by the Department including, but not limited to, the execution and
expiration dates of the contracts and the projected annual volume of electric
energy supplied at a contract-specified price.
2. In order to demonstrate eligibility of
electrical energy sales for exemption under 310 CMR
7.75(5)(d), retail sellers
shall provide the relevant documentation by July 1
st
of the year after the sales occurred, along with information
required in accordance with a form prescribed by the Department including, but
not limited to, the execution and expiration dates of the contracts and the
actual annual volume of electric energy supplied at a contract-specified
price.
(e)
Treatment of Existing Contracts Executed as of October 4,
2019. Notwithstanding 310 CMR
7.75(4), in determining the amount
of CES E-qualified MWh applied to each retail seller subject to 310 CMR
7.75(4)(b) in 2021 and 2022, the Department shall not include that portion of
electrical energy sales that were subject to a contract executed or extended
prior to October 4, 2019, provided that the electricity was sold at a price
specified in the contract and the retail seller provides the Department with
satisfactory documentation of the terms of such contracts.
1. The adjustment to the retail electricity
seller's compliance obligation pursuant to 310 CMR
7.75(4)(b) shall be equal to
20% of the amount of contracted electricity energy sales and shall apply to
sales that occur in 2021 and 2022 only.
2. In order to demonstrate eligibility of
electrical energy sales for exemption under 310 CMR
7.75(5)(e), retail sellers
shall provide the relevant documentation by July 1
st
of the year after the year for which the retail seller has exempt
electrical energy sales, along with information required in accordance with a
form prescribed by the Department including, but not limited to, the execution
and expiration dates of the contracts and the actual annual volume of electric
energy supplied at a contract-specified price.
(8)
Qualification Process for
Clean Generation Units and Clean Existing Generation Units.
(a)
Statement of Qualification
Application. For clean generation units that have not received an
RPS statement of qualification, a CES statement of qualification application
shall be submitted to the Department by the owner or operator of the generation
unit. For clean existing generation units, a CES-E statement of qualification
application shall be submitted to the Department by the owner or operator of
the generation unit. The applicant must use the most current forms and
associated instructions provided by the Department, and must include all
information, documentation, and assurances required by such forms and
instructions.
(b)
Review Procedures.
1.
The Department shall notify the applicant when the CES statement of
qualification application or CES-E statement of qualification application is
administratively complete or if additional information is required pursuant to
310 CMR
7.75(8)(a).
2. The
Department may, in its sole discretion, provide an opportunity for public
comment on any CES statement of qualification application or CES-E statement of
qualification application.
(c)
Issuance or Non-issuance of a
Statement of Qualification.
1. If
the Department finds that all or a portion of the electrical energy output of a
generation unit meets the requirements for eligibility as clean generation
pursuant to 310 CMR
7.75(7)(a), and the generation unit is not eligible to
receive an RPS statement of qualification from DOER, the Department shall
provide the owner or operator of such generation unit with a CES statement of
qualification.
2. If the Department
finds that all or a portion of the electrical energy output of a generation
unit is clean existing generation, the Department shall provide the owner or
operator of such generation unit with a CES-E statement of
qualification.
3. The CES statement
of qualification or CES-E statement of qualifications shall include any
applicable restrictions and conditions that the Department deems necessary to
ensure compliance by a generation unit with the provisions of 310 CMR
7.75.
4. If the generation unit
does not meet the requirements for eligibility as a clean generation unit or
clean existing generation unit, the Department shall provide written notice to
the Owner or Operator, including the Department's reasons for such
finding.
(d)
Notification Requirements for Change in Eligibility
Status. The owner or operator of a clean generation unit or clean
existing generation unit shall notify the Department of any changes in the
technology, operation, emissions, fuel sources, energy resources, capacity
commitment, or other characteristics of the generation unit that may affect the
eligibility of the unit as a clean generation unit or clean existing generation
unit. The owner or operator shall submit the notification to the Department no
later than five days following the end of the month during which such changes
were implemented. The notice shall state the date the changes were made to the
generation unit and describe the changes in sufficient detail to enable the
Department to determine if a change in eligibility is warranted.
(e)
Notification Requirements for
Change in Ownership, Generation Capacity, or Contact Information.
The owner or operator of a clean generation unit or clean existing generation
unit shall notify the Department of any changes in the ownership, operating
entity, generation capacity, NEPOOL GIS account, independent verification
system for the generation unit's electrical energy output, or contact
information for the generation unit. The owner or operator shall submit the
notification to the Department no later than five days following the end of the
month during which such changes were implemented.
(f)
Time Limit for Project
Implementation. Any CES statement of qualification shall expire 48
months after the issuance date of the CES statement of qualification (the
expiration date) unless the commercial operation date of the generation unit is
on or before the expiration date. The Department may, at its discretion, grant
an extension of the expiration date of the CES statement of qualification upon
petition by the owner or operator of the generation unit. If the owner or
operator of such generation unit desires an extension, such owner or operator
must submit a new CES statement of qualification application, and the decision
of the Department on such new application may be made in accordance with the
regulations and criteria that are applicable on the date that the Department
receives that application.
(g)
Suspension or Revocation of Statement of
Qualification. The Department may suspend or revoke a CES
statement of qualification or CES-E statement of qualification if the owner or
operator of a clean generation unit fails to comply with 310 CMR
7.75.
(h)
Identification of Clean Generation Units and Clean Existing
Generation Units. The Department shall inform the NEPOOL GIS
administrator which generation units should be designated clean generation
units and clean existing generation units pursuant to 310 CMR
7.75.
