Peak Potential: Unpacking Recent CPS Developments
This is the tenth blog in our “2024 Clean Peak Standard” blog series. Read the first nine blogs here.
This month’s sweeping regulatory and legislative developments have unlocked new opportunities and raised critical questions for Clean Peak Standard (CPS) stakeholders. On November 8, DOER released the Guideline for the Near-Term Resource Multiplier introduced through emergency regulations. Later, on November 12, the Massachusetts Department of Energy Resources (DOER) announced the schedule for procurements of Clean Peak Energy Certificates (CPECs) within the CPS. Later that week, the MA House passed the energy omnibus bill, S. 2967 – An Act Promoting A Clean Energy Grid, Advancing Equity And Protecting Ratepayers; the legislation now heads to Governor Maura Healy, who has been a strong supporter of the bill. The CPMO team will be holding a Power Lunch on November 21 to discuss the above and more (register here).
Energy Omnibus Bill
As discussed in further detail in our most recent blog post, among other provisions, the energy omnibus bill would modify energy storage system (ESS) siting and permitting regulations and require the Commonwealth’s electric distribution companies (EDCs) and DOER to procure 5,000 MW of storage by 2030. The bill raises some questions, for example, whether existing pumped hydro capacity in the Commonwealth might count towards the 5 GW goal.
CPEC Procurement
It is our read that the legislation’s requirement for an initial procurement for environmental attributes only would be a procurement for CPECs. DOER indicated in its November 12 announcement that it plans to issue the initial CPEC RFP on July 31, 2025, and subsequent RFPs every two years thereafter, but reserves the right to alter the schedule to comply with changes in law, including S.2967. Our take: it likely will not be feasible for DOER to issue the initial RFP by July 31, 2025, given procedural requirements included in the legislation (e.g., review and approval of the bidding process by DPU, hiring an independent evaluator, etc.).
Permitting
The energy omnibus legislation may also ease some permitting barriers; of note, the legislation would allow the EFSB to grant Certificates of Environmental Impact and Public Interest to 100+ MWh storage resources to which DPU has granted comprehensive exemptions from local zoning by-laws, should the EFSB determine that a state or local body has “imposed a burdensome condition.”
Additionally, the legislation would extend the effectiveness, to August 1, 2029, of any “approval” granted to a proposed clean energy generation or storage project that was in effect from October 22, 2020, to August 1, 2024, inclusive. However, the legislation notes that an “approval” for the purpose of the section does not include any “permit, certificate, order, excluding enforcement orders, license, certification, determination, exemption, variance, waiver, building permit or other approval or determination of rights” under a number of statutes, or “any local by-law or ordinance.” This language effectively neuters the approval extension language, as now very few permits qualify as “approvals” under the law.
Near-Term Resource Multiplier
Additionally, on November 8, DOER issued a new Guideline for parties interested in applying for the Near-Term Resource Multiplier (NTRM) under CPS. The NTRM will provide a 2x multiplier on CPECs issued to up to 50 MW of qualified energy storage systems (QESS) for 10 years. A QESS is an energy storage system that began commercial operation after January 1, 2019, which operates primarily to store and discharge renewable energy. To qualify for NTRM eligibility, the QESS must:
- Be a standalone, front-of-the-meter, QESS interconnected to the distribution system
- Not have received a Statement of Qualification on or before January 1, 2025
- Have a commercial operation date (COD) before January 1, 2027
- Not receive the Distribution Credit Multiplier
- Not be owned or controlled by an entity whose NTRM-qualified systems exceed 50% of program capacity (25 MW)
DOER plans to release an application on January 7, 2025, through which parties may apply to reserve NTRM capacity. DOER expects to review applications received by January 21, 2025, based on interconnection service agreement date; applications received after January 21 will be reviewed on a first-come, first-served, basis.
We’re Here to Help
All of the announced and potential changes to CPS create new opportunities for CPS-eligible resources, and a new set of questions for load-serving entities. Through CPMO, we consolidate the information, layer our informed expectations of potential future changes, and conduct robust modeling and analysis to provide our subscribers with the information they need to navigate the new opportunities that have arisen from the recent changes, and, critically, to effectively advocate for portions of the policy yet to be implemented (especially storage solicitations!).
CPMO’s next briefing, anticipated in December 2024, will explore recent and pending changes in detail. If you’re interested in gaining access to CPMO’s market intelligence to guide your decision-making during a critical phase of the CPS market or in learning more about our service please contact the CPMO team.
