The Massachusetts Senate has passed a bill designed to reduce the price of electricity by identifying cost drivers, reviewing rates on a more regular basis and demanding more competition.
In order to establish competition in the market, the bill would end the current long-term contract program under the Green Communities Act by December 2012 and require investor-owned utilities to competitively bid proposals from renewable energy suppliers for long-term renewable energy contracts.
In addition, by increasing the overall net metering cap from 3% to 6%, the legislation doubles the existing limits on municipal and privately owned projects that generate their own renewable energy.
The legislation also does the following:
- Clarifies current law regarding solar and wind property tax classifications;
- Expands the Department of Public Utility's (DPU) oversight over any transaction involving a regulated company (not just Massachusetts-regulated companies);
- Establishes a voluntary energy-efficiency pilot program for the five largest electric and five largest gas users in each utility's service territory; and
- Allows hydroelectric power to count toward the commonwealth's renewable and alternative energy generation goals under the Green Communities Act.
In addition, the legislation requires gas and electric companies to file rate cases every three years with the DPU; increases from six to 10 months the time the DPU has to review rate cases; prevents the DPU from approving rate-case settlements more than once every six years; and requires the DPU to spread over a two-year period any rate increase that would exceed 10% in one year, with a first-year cap of 7.25%.
The bill also requires the Department of Energy Resources, when it intervenes on cases before the DPU, to do so on behalf of all commercial and industrial ratepayers.
"The initiatives in this bill will improve the reliability of our grid and address some of the cost-drivers for electricity prices without compromising our commitment to developing the domestic resources we do have for renewable energy," says Massachusetts Senate President Therese Murray, D-Plymouth.
The bill now goes to the Massachusetts House of Representatives.