trending Market Intelligence /marketintelligence/en/news-insights/trending/tin0-tdzoexvcjaiz4ynpq2 content esgSubNav
In This List

Mass. court rules against generators on new emissions regulations


Despite turmoil, project finance remains keen on offshore wind

Case Study

An Energy Company Assesses Datacenter Demand for Renewable Energy


Japan M&A By the Numbers: Q4 2023


See the Big Picture: Energy Transition in 2024

Mass. court rules against generators on new emissions regulations

A Massachusetts judge has rejected challenges by a coalition of New England generators to the state's new emissions regulations of power plants. Contrary to the generators' assertions, Justice Scott Kafker of Supreme Judicial Court of Massachusetts determined that the state's new mass-based greenhouse gas cap emissions rules are lawful.

Massachusetts' Department of Environmental Protection and the Executive Office of Energy and Environmental Affairs issued the new regulations August 2017 after the Supreme Judicial Court ruled that the state's 2008 Global Warming Solutions Act, or GWSA, required a mass-based greenhouse gas cap. The court reasoned that the state's previous "aspirational" goals were failing to meet reduction targets of 25% by 2020 from 1990 levels and 80% by 2050.

The 2017 regulations set a sector-wide, annually declining limit on aggregate carbon dioxide emissions from Massachusetts' 21 large fossil fuel-fired power plants, decreasing 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 power from low- and zero-emissions generation, starting with 16% of their electricity sales in 2018 and increasing annually to 80% in 2050.

A September 2017 lawsuit filed by the New England Power Generators Association, or NEPGA, and NRG Energy Inc. subsidiary GenOn Energy Inc. argued that mass-based emissions reductions would increase, not decrease, air pollution because less efficient and higher-emitting out-of-state generators would fill the gap left by the reductions imposed on in-state power plants.

The generators further argued that the GWSA requries that emissions restrictions on the electric power system be based on consumption and purchases of electricity. In addition, the suit claimed that the state agencies lacked authority to regulate the electric sector differently from other industries, especially the transportation sector, which avoided major emissions restrictions. It also claimed the agencies failed to show that the mass-based reduction goals will decrease statewide emissions and not cause "leakage" in neighboring states.

Judge finds emissions rules apply to generators

In the Sept. 4 ruling, Kafker determined that the two state agencies have the authority to regulate emissions in the electric industry. Kafker said claims that the GWSA excludes the electric sector, which is responsible for approximately 20% of Massachusetts' emissions, from its reduction requirements makes "little to no sense."

Kafker said that without the new regulations, the expiration of current regulations after 2020 "would create an absurd result: a long-term 2050 statewide emissions goal without … any tools to reach it." The court also said state lawmakers did not intend to render "meaningless" the 2016 court decision directing the Department of Environmental Protection to impose new declining annual aggregate limits of emissions for generating sources that would be required to ensure future climate goals are met.

The judge agreed with the state agencies that the regulations would not increase emissions because shifting to out-of-state generation to comply with the cap would be unnecessary. If the regulations result in more electricity imports, the judge said the mandated growth of clean energy resources would result in the development of renewables and other clean energy sources in neighboring states.

NEPGA responded to the court ruling with a statement claiming that the judge's opinion ignores the regulation's impact on emissions from power generation to meet electricity demand.

"As went unrefuted throughout the case, with Massachusetts plants having their operations limited by this regulation, less efficient plants out of state will be dispatched to make up the difference," said NEPGA president Dan Dolan. "This case was not about Massachusetts meeting its climate change obligations, but ensuring that it does so most efficiently."

Dolan noted that NEPGA's power producing members have cut carbon dioxide emissions by nearly 60% in Massachusetts and more than 40% across New England since 1990. "Those reductions now place power plants as less than half the emissions from the transportation sector, which still does not have any meaningful regulations in place," said Dolan. "But it is now past time for Massachusetts to engage other sectors, as will be necessary to meet the economy-wide legal mandates."