Section 83E Round 1 Issued; DOER Seeking Comments on Round 2

Round 1 Updates

On July 30, 2025, in Docket 25-59, the Massachusetts DPU issued its order on the draft Section 83E Round 1 RFP, directing several clarifications before the final version was released on July 31, 2025. While stakeholders had proposed a number of substantive changes (see a detailed discussion in our previous blog post), the DPU elected not to adopt most of these changes.

The only truly substantive change to the Round 1 solicitation is that the RFP explicitly states that existing energy storage systems are eligible to participate without having to demonstrate that a Section 83E contract is necessary for financing. This clarification resolves a tension in the draft language (and the enabling statute), which created uncertainty by appearing to require all projects to show that the contract would enable financing, a requirement that appeared to run afoul of the statute’s explicit direction to make existing energy storage eligible.

From a practical perspective, this means that capacity at the Bear Swamp pumped hydro facility should be eligible to participate in the first solicitation. Based on DOER’s CPS qualified units list, this represents a total of 88 MW of capacity that Brookfield (the owner of Bear Swamp) could bid into the first solicitation. If future solicitations do not require that resources include CPECs as one of the provided quantities, this change could also signal that the full output of MA’s pumped hydro facilities (approximately 1.7 GW after eliminating the incremental Bear Swamp capacity associated with the retrofit) could compete in future Section 83E solicitations. This would dramatically affect the total volume of mid-duration energy storage solicitation capacity (3.5 GW in total) available to new resources.

The changes also leave some ambiguity for projects that are under development and that may have already closed construction and/or term financing (see, for example, Cranberry Point). The language below is from the bidder form:

Please submit information and documentation that demonstrates that long term contracts resulting from this RFP Process would either permit the bidder to finance, or refinance, its proposal that would otherwise not be financeable or assist the bidder in obtaining financing of its proposal.   Existing projects are not required to make a statement that demonstrates how a long-term contract would permit financing; however, existing projects should complete the sections below to the best of their ability.

The CPMO Team’s perspective is that projects under development that have closed financing would still likely be eligible to participate, though it’s possible that they could see some reduction in their qualitative score on the basis of their closed financing (though, one would hope this would be more than offset by the greater maturity of these projects). These projects could also consider seeking (or claiming that they will seek) to refinance the project should they be awarded a contract.

At a Bidders’ Conference on August 14^th, there were no questions raised that would likely have a significant impact on expected auction outcomes or the approach to structuring bids.

Looking ahead, the remainder of the RFP will follow the timeline below:

Round 1 Schedule

• RFP Issuance: July 31, 2025
• Bidders’ Conference: August 14, 2025
• Deadline for Questions: August 21, 2025
• Proposals Due (Confidential & Public): September 10, 2025 at 12:00 p.m. ET
• Selection / Negotiations Begin: December 9, 2025
• Execute Long-Term Contracts & MOU with DOER: March 27, 2026
• Submit Contracts for DPU Approval: April 24, 2026
• COD Deadline: December 31, 2030

The final RFP language is in line with assumptions adopted by the CPMO Team in our most recent briefings.

Round 2 Preview

In its July 30 Order, the DPU supported the intent of DOER and the EDCs to include distribution-connected resources in subsequent Section 83E solicitations. The final Round 1 RFP included language confirming this. On July 31, DOER, the electric distribution companies (EDCs), and the MA Attorney General’s Office (AGO), collectively, the “RFP Drafting Parties”, posted a document seeking input on how to incorporate distribution-connected resources into the Section 83E Round 2 solicitation, which would seek a total of approximately 1 GW of mid-duration energy storage.

The document included initial thoughts on how distribution-connected projects would be included in the solicitation, stressing that the proposed design is subject to change:

• Eligibility:
  • Bids, which may include aggregated units, must have a minimum total capacity of 5 MW. Individual projects would have a minimum size of 2 MW.
  • Projects must be front-of-the-meter
  • Projects must be standalone, or, if co-located with solar, the solar cannot participate in the SMART program
• Dx-carve-out. The Drafting Parties stated that they anticipated setting a meaningful “target” for distribution-connected resources and that they were considering the “optimal balance among several key variables to determine appropriate procurement size” for distribution-connected projects. The document stated that distribution-connected projects may be subject to different criteria than transmission-connected projects, but would still be subject to an evaluation of net benefits.

The document sought stakeholder comment on how to include distribution-connected in the Round 2 solicitation. The document asked for stakeholders to comment on:

• Whether bidders would prefer to bid only energy attributes (i.e., CPECs), “Energy Services”, or both.
• The unique value of distribution-connected resources (relative to transmission-connected resources), and how DOER might value and incentivize projects in advantageous locations
• The impact of changes to the ITC on project viability (while the document was released after the passage of the One Big Beautiful Bill Act, it does not explicitly reference it)
• How to evaluate aggregations of projects with different characteristics
• The commenter’s project pipeline (total MW, type, etc.)
• How to structure bid and security fees
• How to structure a contract that includes Energy Services. [We note that this prompt will also be extremely relevant to transmission-connected resources].

Responses are due by 5:00 PM on August 28, 2025. We anticipate that most comments will be made public; when they are, we will summarize them in a future blog post.

CPMO can Help

The CPMO Team will continue to follow Section 83E developments in detail, and incorporate updates into CPMO’s market analysis. If you want to take advantage of the unique insights stemming from our objective market analysis, we invite you to reach out to the CPMO team for a demo.