If approved, procurement would provide 565 megawatts of energy
BOSTON – Monday, September 23, 2013 – The Patrick Administration today announced that Massachusetts’ four utility companies have filed with the Department of Public Utilities (DPU) contracts for the largest procurement of renewable energy in New England.
The joint procurement by Northeast Utilities, which owns and operates NSTAR and Western Massachusetts Electric Company (WMECo), National Grid, and Unitil would provide 565 megawatts (MW) of renewable energy, enough to power about 170,000 homes. The weighted average price from all of the contracts is less than eight cents per kilowatt hour (kWh).
“Working together, we are making significant progress towards creating cost-effective, renewable energy and reducing our greenhouse gas emissions,” said Governor Patrick. “This procurement is a critical step in creating a 21st century clean energy future in Massachusetts.”
In August 2012, Governor Patrick signed into law new energy legislation directing Massachusetts’ electric distribution companies to solicit proposals for long-term contracts associated with renewable energy projects to provide four percent of their total energy demand. The four companies issued a joint request for proposals, developed in consultation with the Massachusetts Attorney General’s Office and the Department of Energy Resources (DOER), and approved by the DPU on April 1, 2013. The following month, the companies received 40 bids to jointly consider. Short-listed bids were selected in July and contract negotiations took place throughout August.
The DPU will begin its review process to ensure the procurement is cost-effective for ratepayers. This process includes a public comment period and public hearings for each of the utilities.
“The Patrick Administration is working to ensure ratepayers are provided reliable, cost-effective energy,” said Energy and Environmental Affairs Secretary Rick Sullivan. “This procurement would be a big step forward in doing that by reducing our reliance on dirty fossil fuels and lowering greenhouse gas emissions.”
The contracts call for six projects to be built in Maine and New Hampshire by project developers First Wind, Iberdrola Renewables and Exergy Development Group.
"Through these new agreements, NSTAR and WMECo are further demonstrating our commitment to helping Massachusetts reach its clean energy goals and adding to the significant amount of renewable electricity we currently deliver to our customers," said James Daly, Vice President of Energy Supply for Northeast Utilities, parent company of NSTAR and WMECo. "We applaud Governor Patrick and Secretary Sullivan for their leadership and hands-on approach in promoting regional renewable energy projects."
“We are pleased with the results of this solicitation. By pooling the resources of all the utilities, we were able to purchase a large amount of clean, renewable energy for the state at below-market prices,” said Ronald Gerwatowski, senior vice president, U.S. Regulation and Pricing, National Grid. “In addition to delivering environmental benefits for years to come, these agreements have the potential to save customers money over the long term. Renewables are an investment in our green energy future. These long-term power supply contracts are great news for our customers and the Commonwealth.”
"Our focus as a company was to help present a filing that would meet the state's requirement for renewable energy while at the same time offering a fair price to our customers," Unitil media relations manager Alec O'Meara said. "We're hopeful this filing will accomplish these goals."
This procurement builds upon the success of the first major procurement of renewable energy that Massachusetts utilities conducted two years ago through a provision in the Green Communities Act which Governor Patrick signed in to law in 2008. Through that procurement process, each of the utilities executed long-term contracts for separate energy projects. Massachusetts and New England both have significant renewable energy resources. Massachusetts has more than 1,000 MW of wind energy potential onshore and over 6,000 MW offshore, while New England could power over 24 percent of its electricity needs from its more than 10,000 MW of wind energy potential. The Patrick Administration reached its goal of 250 MW of solar installed earlier this year, 4 years early, and set a new goal of 1,600 MW. When that goal is reached, it will generate enough electricity to power approximately 240,000 homes annually – the equivalent of 97 percent of Boston households. The Patrick Administration is currently working closely with other New England states on a regional strategy to unlock more clean energy opportunities from both renewable energy and large hydro.
“The energy policies we enacted last session are now being implemented by the Patrick Administration and I am very encouraged to see these efforts. Today the Department is helping the Commonwealth achieve its renewable energy goals, and, at the same time, is creating savings for the ratepayers,” said Senator Benjamin B. Downing, Chairman of the Joint Committee on Telecommunications, Utilities and Energy.
“I am pleased to see the continued success of the Commonwealth’s efforts to procure affordable renewable energy,” said Representative John Keenan, Chairman of the Joint Committee on Telecommunications, Utilities and Energy. “Ensuring a competitive bidding process and pooling our utilities’ resources will reduce costs to our ratepayers while making a significant stride towards reaching our renewable energy goals.”
“Massachusetts continues to lead the way in clean energy and this is a prime example of a successful policy that will benefit all of the people of the Commonwealth for the future”, said Representative Anne Gobi of Spencer, the Co-Chair of the Joint Committee on Environment, Natural Resources, and Agriculture.
“The New England Clean Energy Council is thrilled to see these proposals submitted and looks forward to a thorough and swift review by the Department of Public Utilities,” said New England Clean Energy Council President Peter Rothstein. “Massachusetts is truly a leader in the effort to bring lower cost, clean energy to consumers. Massachusetts' long-term contracting process should serve as a model for other states as they seek to develop power purchase agreements for renewables.”
"These renewable energy procurements represent a significant step in transforming New England's generation fleet over to new, clean and cost-effective resources that allow our region to invest in its local economy rather than send millions of dollars beyond its borders for fossil fuels,” said RENEW’s Executive Director Francis Pullaro.
“By again taking action to go long on renewable energy at locked-in prices, Massachusetts is further buffering electric customers from the fossil fuel price rollercoaster,” said Conservation Law Foundation President John Kassel. “Importantly, long-term renewable energy contracts allow Massachusetts customers to save money while boosting the development of new clean renewable energy projects. The package of long-term contracts announced today continues the promising trajectory of aligning environmental and economic objectives in a significant step toward a clean energy economy."
“ELM commends both the Patrick Administration and the Commonwealth’s utilities for their cooperative efforts to cost-effectively procure clean energy that will benefit both ratepayers and the environment. Long-term contracts for renewable energy will contain costs and prevent price volatility. And it will accelerate our march toward reliable, renewable, clean energy,” said Environmental League of Massachusetts President George Bachrach. “Massachusetts already leads in energy efficiency, the first off-shore wind farm in America and now a united front to increase our clean energy portfolio. This is an important public-private partnership.”
Massachusetts sits at the end of the energy pipeline, spending billions of dollars annually to import all of its fossil fuel based energy sources from places like South America and the Middle East. That is lost economic opportunity that Massachusetts stands poised to reclaim through investments in home-grown renewable energy and energy efficiency projects.
Currently, Massachusetts has 311 megawatts of solar power installed, with more than 130 megawatts installed in 2012 alone. That’s enough electricity to power more than 46,600 homes and, when compared with fossil fuel-generated electricity, the equivalent of eliminating the GHG emissions from 32,224 cars per year.
There has been an increase in wind energy from 3 megawatts to 103 megawatts since 2007, enough to power more than 30,867 homes and eliminate GHG emissions from more than 21,345 cars annually.