Municipal light plants decry proposed greenhouse gas limits
WORCESTER - Representatives of local municipal light plants are
protesting their inclusion under a proposed clean energy standard that
sets limits on greenhouse gas emissions.
"Imposing a one-size-fits-all clean energy standard on Holden could produce conflicts with our existing commitments and/or result in undue costs that could compromise our ability to continue providing the low-cost, reliable service that our customers depend on," said James S. Robinson, general manager of the Holden Municipal Light Department.
In May, the Supreme Judicial Court ruled the state hasn't met the
requirements of the 2008 Global Warming Solutions Act, which required
reductions of greenhouse gas emissions to reach targets of a 25 percent
reduction from 1990 levels by 2020 and an 80 percent reduction by 2050.
Stemming from an executive order by Gov. Charlie Baker, the Department of Environmental Protection is proposing regulations imposing a clean energy standard to meet those reduction goals, and is including municipal light plants - of which there are 41 in the state - for the first time under the standard.
Four people - representing municipal light plants in West Boylston, Holden, Sterling and Shrewsbury - testified Wednesday at a DEP public hearing in Worcester concerning the proposed clean energy standard.
The testimony focused on three themes.
Those testifying said that the Global Warming Solutions Act doesn't give the DEP the legal authority to impose a clean energy standard on municipal light plants, as municipal light plants are not specifically included in the legislation.
"There has to be some statutory authority and DEP is stretching when they say they do have the authority," said Jonathan Fitch, general manager of the West Boylston Municipal Light Plant.
Second, the representatives questioned the need for a clean energy standard, arguing that they were already buying carbon-neutral and green power without a mandate. Holden, for instance, has a power supply that is 54 percent carbon neutral, with power from nuclear projects, two wind projects and three hydroelectric products, according to Mr. Robinson.
But the proposed standard doesn't give the full benefit of the
carbon-neutral power that comes from nuclear plants, Mr. Robinson said,
and several municipal light plants are locked into long-term contracts
with nuclear providers.
Such long-term commitments lead to the third concern of those who testified: that the business model of public power could not easily adapt to the proposed regulations.
Municipal light plants operate primarily on long-term contracts, according to testimony, rather than going out to bid to buy power every six months like investor-owned utilities such as National Grid. This makes them less flexible to adapt to new regulations for power sources.
West Boylston, for instance, is already contracted out to buy 80 to 90 percent of its power through 2020-2025, according to Mr. Fitch. If they have to buy additional power to meet the proposed clean energy standard then they will have more power than they need and the cost will be passed on to ratepayers, he said. Or the municipal light plant could pay alternative compliance payments - essentially fines for not meeting the standard - which would also be passed on to ratepayers.
For West Boylston, those compliance payments start at $75,235 in 2021 and increase to $1,526,920 by 2050, according to Mr. Fitch.
Those who testified offered several suggestions to improve the proposed clean energy standard. Suggestions included that nuclear commitments count toward the clean energy standard and that any compliance payments remain under the control of each municipal light plants to be used for new renewable and clean energy projects.
But Mr. Fitch said he expected the No. 1 issue - whether the new standard would apply to municipal light plants - would be resolved in a courtroom.
Public comment on the proposal ends Feb. 24, and the regulations must be promulgated by Aug. 11, according to the DEP.
"Imposing a one-size-fits-all clean energy standard on Holden could produce conflicts with our existing commitments and/or result in undue costs that could compromise our ability to continue providing the low-cost, reliable service that our customers depend on," said James S. Robinson, general manager of the Holden Municipal Light Department.
Stemming from an executive order by Gov. Charlie Baker, the Department of Environmental Protection is proposing regulations imposing a clean energy standard to meet those reduction goals, and is including municipal light plants - of which there are 41 in the state - for the first time under the standard.
Four people - representing municipal light plants in West Boylston, Holden, Sterling and Shrewsbury - testified Wednesday at a DEP public hearing in Worcester concerning the proposed clean energy standard.
The testimony focused on three themes.
Those testifying said that the Global Warming Solutions Act doesn't give the DEP the legal authority to impose a clean energy standard on municipal light plants, as municipal light plants are not specifically included in the legislation.
"There has to be some statutory authority and DEP is stretching when they say they do have the authority," said Jonathan Fitch, general manager of the West Boylston Municipal Light Plant.
Second, the representatives questioned the need for a clean energy standard, arguing that they were already buying carbon-neutral and green power without a mandate. Holden, for instance, has a power supply that is 54 percent carbon neutral, with power from nuclear projects, two wind projects and three hydroelectric products, according to Mr. Robinson.
But the proposed standard doesn't give the full benefit of the
carbon-neutral power that comes from
nuclear plants, Mr. Robinson said, and several municipal light plants are locked into long-term
contracts with nuclear providers.
Such long-term commitments lead to the third concern of those who testified: that the business model
of public power could not easily adapt to the proposed regulations.
Municipal light plants operate primarily on long-term contracts, according to testimony, rather than
going out to bid to buy power every six months like investor-owned utilities such as National Grid.
This makes them less flexible to adapt to new regulations for power sources.
West Boylston, for instance, is already contracted out to buy 80 to 90 percent of its power through 2020-2025, according to Mr. Fitch. If they have to buy additional power to meet the proposed clean
energy standard then they will have more power than they need and the cost will be passed on to
ratepayers, he said. Or the municipal light plant could pay alternative compliance payments -
essentially fines for not meeting the standard - which would also be passed on to ratepayers.
For West Boylston, those compliance payments start at $75,235 in 2021 and increase to $1,526,920
by 2050, according to Mr. Fitch.
Those who testified offered several suggestions to improve the proposed clean energy standard.
Suggestions included that nuclear commitments count toward the clean energy standard [see Fukashima]and that
any compliance payments remain under the control of each municipal light plants to be used for new renewable and clean energy projects.
But Mr. Fitch said he expected the No. 1 issue - whether the new standard would apply to
municipal light plants - would be resolved in a courtroom.
Public comment on the proposal ends Feb. 24, and the regulations must be promulgated by Aug. 11, according to the DEP.
nuclear plants, Mr. Robinson said, and several municipal light plants are locked into long-term
contracts with nuclear providers.
Such long-term commitments lead to the third concern of those who testified: that the business model
of public power could not easily adapt to the proposed regulations.
Municipal light plants operate primarily on long-term contracts, according to testimony, rather than
going out to bid to buy power every six months like investor-owned utilities such as National Grid.
This makes them less flexible to adapt to new regulations for power sources.
West Boylston, for instance, is already contracted out to buy 80 to 90 percent of its power through 2020-2025, according to Mr. Fitch. If they have to buy additional power to meet the proposed clean
energy standard then they will have more power than they need and the cost will be passed on to
ratepayers, he said. Or the municipal light plant could pay alternative compliance payments -
essentially fines for not meeting the standard - which would also be passed on to ratepayers.
For West Boylston, those compliance payments start at $75,235 in 2021 and increase to $1,526,920
by 2050, according to Mr. Fitch.
Those who testified offered several suggestions to improve the proposed clean energy standard.
Suggestions included that nuclear commitments count toward the clean energy standard [see Fukashima]and that
any compliance payments remain under the control of each municipal light plants to be used for new renewable and clean energy projects.
But Mr. Fitch said he expected the No. 1 issue - whether the new standard would apply to
municipal light plants - would be resolved in a courtroom.
Public comment on the proposal ends Feb. 24, and the regulations must be promulgated by Aug. 11, according to the DEP.
Such long-term commitments lead to the third concern of those who testified: that the business model of public power could not easily adapt to the proposed regulations.
Municipal light plants operate primarily on long-term contracts, according to testimony, rather than going out to bid to buy power every six months like investor-owned utilities such as National Grid. This makes them less flexible to adapt to new regulations for power sources.
West Boylston, for instance, is already contracted out to buy 80 to 90 percent of its power through 2020-2025, according to Mr. Fitch. If they have to buy additional power to meet the proposed clean energy standard then they will have more power than they need and the cost will be passed on to ratepayers, he said. Or the municipal light plant could pay alternative compliance payments - essentially fines for not meeting the standard - which would also be passed on to ratepayers.
For West Boylston, those compliance payments start at $75,235 in 2021 and increase to $1,526,920 by 2050, according to Mr. Fitch.
Those who testified offered several suggestions to improve the proposed clean energy standard. Suggestions included that nuclear commitments count toward the clean energy standard and that any compliance payments remain under the control of each municipal light plants to be used for new renewable and clean energy projects.
But Mr. Fitch said he expected the No. 1 issue - whether the new standard would apply to municipal light plants - would be resolved in a courtroom.
Public comment on the proposal ends Feb. 24, and the regulations must be promulgated by Aug. 11, according to the DEP.
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