A Partnership Between the State and Its Energy Users

1. Massachusetts Department of Energy Resources Creating A Greener Energy Future for the Commonwealth A Partnership Between the State and Its Energy Users Gerry Bingham, Coordinator Gerry.Bingham@State.MA.US

2. Today’s Slides • Today’s Energy Drivers • DOER Mission • Bold Opportunities • Green Communities Act Summary • DOER “Assistance for Business” • Energy Planning Tips for Business • Important Resources for Industry • Energy Leaders

3. NEMA Wholesale Electricity Price– historical trend and rolling projection based on natural gas futures This is not a DOER forecast. We use the NYMEX forward price curve for natural gas and an implied heat rate for the marginal gas fired power plant to calculate an implied electricity price for forward time periods. All available actual data is used so that assessments for 2008 increasingly utilize actual year to date available wholesale data and consequently are less based on projections. Projections do not include RGGI CO2 allowances

4. http://www.mckinsey.com/clientservice/ccsi/pdf/US_ghg_final_report.pdfhttp://www.mckinsey.com/clientservice/ccsi/pdf/US_ghg_final_report.pdf

5. DOER Mission • Implement energy policies that ensure an adequate supply of reliable, affordable and clean energy for the businesses and residents of Massachusetts. • Improve and streamline energy regulation, promote greater efficiency in all energy uses, reduce energy costs and mobilize energy education.

6. Today's Drivers Create Opportunities to be Bold • Energy costs have never been higher. • Saving energy has never been more valuable. • Climate is now among highest priorities. • Being Green is Good for Business. • New Energy Developments: • The Green Communities Act • Global Warming Solutions Act • Green Jobs Act • Commonwealth Energy Resource Team • Energy Leaders Website

7. Electric System Overview: BEFORE

8. New Policies for the Electric System Alternative Energy Portfolio Standard Utility Ownership of PV • Two Major Components: Generation Service and Delivery Service Greenhouse Gas Cap and Trade (RGGI) Net Metering Long-Term Contracts for Renewables All Cost-Effective Efficiency Carbon Regulation (All Sectors) Smart Grid Pilot Renewable Portfolio Standard Renewable Energy Grants Clean Energy Sector (Green Jobs Act)

9. The Green Communities Act • Creates unconstrained market for energy efficiency to compete with supply – utilities to invest in all cost-effective energy efficiency • Partners state with towns/municipalities to implement energy efficiency and renewables • Expands clean energy goals through increase in RPS minimum standard and additional RPS/APS classes • Enhances market opportunities for renewables through municipal ownership, net metering, and utility PV ownership And much more including RGGI authorization, MRET changes, State facilities, Ratepayer Advocacy in AGs office, DPU steam system oversight, support hybrids, form economic target areas

10. The Commonwealth Energy Assistance Team (CERT) • CERT is a one-stop-shop resource for business. • leverage all existing utility and state programs • Integrate available resources into your comprehensive energy plan. • Contact us for help! • http://tinyurl.com/DOER-CERT

11. The Private Sector and Electricity Source: DOER, EIA, CBECS

12. National Statistics on Energy Intensity Source: EIA, CBECS

13. The Private Sector & DOER Assistance

14. Tips for Businesses Managing Energy Costs • Identify responsibility within the company for all energy-related concerns. • Assemble energy use data. • Analyze data – compare to peers, former self • More Complex Analysis • Develop short and long term energy efficiency plans • Consider your energy procurement practices • Monitor your progress

15. Important Resources for Industry • UMass Industrial Assessment Center http://www.ceere.org/iac/ • MA Energy Efficiency Partnershiphttp://www.maeep.org/mission.cfm • US DOE ITP – BestPractices Toolshttp://www1.eere.energy.gov/industry/ • EnergyStar Tools for Buildings and Plants http://www.energystar.gov/ • MASS MEP Lean Manufacturinghttp://www.massmep.org/ • MA Office of Technical Assistance

16. Energy Leaders • DOER has created a web resource to showcase private sector Energy Leaders that are employing a variety of energy-saving strategies. • CISCO Systems and Efficiency • Cooley Dickinson and Biomass CHP • Delaware Valley and Waste Heat Recovery • Fenway Park and Solar Thermal Hot water • Rand Whitney and DOE Save Energy Now • http://tinyurl.com/DOER-EnergyLeaders

17. Massachusetts Department of Energy Resources Creating A Greener Energy Future for the Commonwealth A Partnership Between the State and Its Energy Users Gerry Bingham, Coordinator Gerry.Bingham@State.MA.US

18. Efficiency • Procure all demand resources that are less expensive than supply funded by SBC, FCM, RGGI, NOx, other • Forming Energy Efficiency Advisory Council • 11 members; specified composition • 5 year term • Clear timetable for 3 year plans • Submit to Counsel by April 30 and to DPU by Oct 31 • 90 days for DPU decision • Adopts IECC for building codes w/ automatic updating w/ inspector training and certification • Performance commissioning for commercial new buildings • Home energy audit information provided to buyers

19. Renewables • Extends and accelerates RPS Class I • 1% increase per year after 2009 • 15% by 2020 • Determine feasibility of import standards including committing resources to capacity market by 11/1/08 • Create new RPS Class II (operating before 12/31/97) and Alternative Energy Portfolio Standard (CCS required, CHP, flywheel, paper derived fuel) – targets to be set by 1/1/09 • Long-term contract pilot (10 to 15 years); capped at 3% of utility load • Creates utility owned PV opportunity 25 MW by 2009, 50 MW by 2010 • DOER to establish minimum percentage “set-aside” for on-site renewable energy generation (2 MW units and smaller)

20. Renewables – Changes to the RPS • Current RPS becomes Class I on 1/1/2009. • Class I additions: small hydropower, marine or hydrokinetic, geothermal, & behind-the-meter. • Class I increases at 1% per year after 2009. • Class II for pre-1998 generators, same technologies & resources as Class I, plus waste-to-energy (only if a facility also contracts for state-approved recycling). • DOER decides on feasibility of imports by 11/1/2008. • Special commission reports on C&D debris eligibility by 7/1/2009. • Alternative Portfolio Standard for CHP, coal gasification, and “steam technologies” – Rules by January 2009

21. New Net Metering Provisions • Under net metering, a system owner receives retail credit for at least a portion of the electricity they generate. The policy allows your existing meter to spin backwards, banking excess electricity production for future credit. • Expands previous 60 kW limit for net metering with tiered credits as follows: • Class I: 60 kW or less (all technologies) • Class II: >60 kW – 1 MW (solar, wind, agricultural business) • Class III: >1 MW – 2 MW (solar, wind, agricultural business) • Net excess $ credit is carried over month-to-month indefinitely • Neighborhood net metering • Class I, II, or III facility that serves the energy needs of a group of 10 or more residential customers in a single neighborhood and distribution company • Capped @ 1% of utility load

22. Changes to the Massachusetts Renewable Energy Trust (MRET) • Oversight: Chaired by DOER Commissioner • New technologies eligible for MRET funding (thermal technologies) • Municipal's eligible for MRET if they charge for the SBC

23. Underway • Create regulatory proceeding and filing calendars • 11/1/08 Imports • 1/1/09 RPS II and AEPS • 4/1/09 first 3yr efficiency plan to Counsel and “pay and save” pilot, smart grid pilot • 7/1/09 C&D • 10/31/09 first 3yr efficiency plan to DPU • 12/31/09 Green Building and energy efficiency cost effectiveness • 1/2/10 Siting and Hybrid and alt fuel vehicle plan • Coordinate closely with DPU • Recruit candidates for boards and commissions • Establish process for 2009 efficiency plans

24. Global Warming Solutions Act • Requires GHG Emissions reduction of 10 to 25% by 2020 • 80% reduction in greenhouse gases from 1990 levels by 2050 • Interim emissions limits for 2030 and 2040 • Establishes a regional greenhouse gas registry and reporting system for emissions sources • Requires ongoing records of all greenhouse gas emissions • Requires addressing adaptation • EOEEA Secretary to convene an advisory committee and file a report of recommendations no later than December 31, 2009

25. Green Jobs Act • Promotes jobs in the clean energy sector through grants and loans, workforce development, clean energy research, and assistance to higher education • Creates the Massachusetts Clean Energy Technology Center within the Executive Office of Environmental Affairs and a 15-member advisory committee, appointed by the governor • Allocates $68 million over the next five years for industry assistance like workforce development grants and seed funding.

26. Outcomes A new greener world order: • Much more energy efficient economy • Businesses, Institutions, Communities, Homes • No longer optimizing a fixed efficiency spend • Now spending whatever makes economic sense • Significantly increased renewables • Building off success • Adding important elements