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Mass. regulators issue finalized clean energy standard to cut emissions

New regulations to reduce carbon emissions have been issued by Massachusetts regulators to help the state meet clean air goals.

The Massachusetts Department of Environmental Protection, or DEP, on Aug. 11 issued the new regulations as required by a May 2016 decision by the state Supreme Judicial Court. In that ruling, the court said the state's 2008 Global Warming Solutions Act requires a mass-based greenhouse gas cap. The court said the state's previous "aspirational" goals were falling short of meeting emissions reduction targets of 25% by 2020 from 1990 levels and 80% by 2050.

In a September 2016 executive order, Gov. Charlie Baker directed the DEP to craft new regulations to satisfy the court ruling. In December 2016, the DEP released an initial draft of the regulations, including the state's clean energy standard.

The finalized regulations set a sector-wide, annually declining limit on aggregate carbon dioxide emissions from Massachusetts' 21 large fossil fuel-fired power plants, from 8.96 million metric tons in 2018 to 1.8 million metric tons in 2050. The new rules also require utilities to procure an increasing proportion of electricity from low- and zero-emissions generation, starting with 16% of their electricity sales in 2018 and increasing 2% annually until reaching 80% in 2050. Renewable portfolio standard, or RPS, Class I renewables will make up 13% of that minimum requirement in 2018 before increasing by 1% per year until reaching 45% in 2050.

Compliance can also be met through using clean energy credits or alternative compliance payments. Banking of clean energy credits will be allowed starting in 2021 but will be limited to ensure annual reductions in emissions.

Eligible clean energy generators — such as hydro and nuclear — must either be RPS-eligible or demonstrate a net life cycle of greenhouse gas emissions of at least 50% below those of the most efficient natural gas generator and be located in ISO New England's wholesale electricity market or in an adjacent area and have begun commercial operations after Dec. 31, 2010. In a review slated to start this year and be finished before 2022, the DEP will consider older resources that were online before 2011.

Changes in the finalized regulations have also sought to accommodate electricity sold under existing contracts in 2018 and 2019 by allowing a limited grandfathering of those contracts between competitive suppliers and customers. In addition, limited allowance banking and an "emergency deferred compliance" option have also been included to ensure the reliability of the power grid is not impacted by the changes.

Expert consultants hired by the DEP said electricity bills are unlikely to increase by more than 1% to 2% as a result of the regulations and forecast low allowance prices as well. The DEP will review the program every 10 years, starting in 2021.

The regulations also include new rules pertaining to natural gas and transportation. These sections seek to limit carbon dioxide emissions from state-operated vehicles and reduce both methane emissions from natural gas distribution companies as well as sulfur hexafluoride emissions from gas-insulated switchgear owned by large utilities.

"These rules re-establish the Commonwealth as a national leader in developing sensible, enforceable standards to transition our economy to a low-carbon future," Bradley Campbell, president of the pro-renewable Conservation Law Foundation, said in a statement. "Much more needs to be done."