On Thursday, August 11th, 2022, Governor Baker signed H.5060 An Act Advancing Clean Energy and Offshore Wind into law, thereby establishing the second landmark piece of climate legislation passed in Massachusetts in the 2021-2022 legislative session. Largely intended to help implement the statutory climate commitments of the Climate Act of 2021, including achieving a net zero economy by 2050, the comprehensive 2022 climate bill contains bill components to expand renewable energy, promote clean energy innovation and technology, electrify buildings and transportation, expand grid capacity and modernization upgrades, encourage grid resiliency and reliability through energy storage, bolster equitable workforce development programs within the Massachusetts Clean Energy Center, and commit to statutory mandate updates for the Department of Public Utilities that will help to better align the gas system and infrastructure upgrades with our statutory emissions limits and sublimits. With the establishment of several new funds and governing bodies, this bill helps to begin to implement the roadmap of climate commitments established in 2021, and affirms Governor Baker and the Legislature’s climate leadership legacy.
Within the building sector, H.5060 establishes the first-ever statewide reporting requirement for large existing buildings over 20,000 square feet. To maximize reporting efficiencies, utilities are now required to annually report energy usage of large buildings over 20,000SF directly, with any additional usage being reported by owners themselves. The bill language also allows Boston and Cambridge to continue to enforce BERDO 2.0 and BEUDO, respectively. This reporting requirement will help the State to establish baseline building emissions data, which can help to track progress on building sector emissions sublimits, established by the 2025 and 2030 Clean Energy and Climate Plans. The establishment of statewide reporting and baseline data for existing buildings is an important first step in tracking our building emissions, however, the bill does not consider EEA staff capacity or the digital infrastructure that will be required. The bill also seeks to limit Mass Save incentives from supporting fossil fuel infrastructure for heating and cooling beginning in 2025, with exceptions for emergency backup.
Despite many bill components that A Better City was happy to support, the one section that we continue to have concerns with is section 83 of H.5060, which allows 10 municipalities to file home rule petitions that would pursue fossil fuel bans by local approval. As we stated in an earlier comment letter, this demonstration project section would effectively create a fourth building code, without ample assurance that the electricity grid would have the capacity to support this increase in load. Depending on which municipalities are resourced enough to electrify first, these demonstration projects in 10 municipalities may also contribute to regional inequities and a higher energy burden placed on ratepayers left behind to pay for remaining fossil fuel infrastructure. As you may have heard, on Tuesday, August 16th, Mayor Michelle Wu led Boston to file the first home rule petition in response to H.5060, thereby pursuing a demonstration project for fossil fuel bans in new construction and major renovations within Boston. Please see Rick Dimino’s statement on Boston’s move to ban fossil fuels below:
"While we support the City of Boston's commitment to achieving our climate goals, the pursuit of a carbon free future must not imperil the equitable growth of our regional economy," said Rick Dimino, President & CEO of A Better City. "We urge Mayor Wu to prioritize engagement with stakeholders from the real estate and development community to ensure that the phase-out of fossil fuels is both technically and financially feasible in terms of building construction and operations and grid capacity and reliability, while being clear on timing and implementation. Additionally, it is imperative that this new effort aligns with the various policies underway at the city and state levels, including Boston's BERDO 2.0 and Zero Net Carbon Zoning Initiative and the state Stretch Energy Code, which are already presenting a dizzying compliance patchwork for many developers."
In Boston and at the state-level in Massachusetts, we will continue to urge policy makers to consider the unintended impacts that misaligned building policies may have on the economy and our communities alike, and the need to promote better consistency and alignment across climate policies moving forward.
H.5060 also has several bill components that seek to scale up the adoption of electric vehicles (EVs). First, all sales of new gasoline or diesel-powered vehicles would be banned in Massachusetts beginning in 2035. To help track vehicle miles traveled by vehicle type, the State would also create an aggregated and anonymized database of motor vehicles by zip code and type of vehicle that would be published annually on the Department of Energy Resources’ (DOER) website. Additionally, the bill would establish an Electric Vehicle Incentive Trust Fund that would help to offer EV rebates – both at the point of sale and the point of lease – that would increase the incentive from the current rebate of $2,500 to $3,500 for new and used EVs costing $55,000 or less, with the additional $1,000 bonus for drivers who trade in a fossil fueled car of truck, and an extra $1,500 to lower-income residents for new and used EV purchases. The State is also directed to do community outreach in lower-income neighborhoods and places with high vehicular air pollution to encourage EV adoption. To help monitor equitable EV adoption, the State will need to track their progress reaching low- and moderate-income households and people of color, and will need to build a website to help people find available EVs through car dealerships. The bill also establishes an Interagency Council for EV Charging Infrastructure, that will help MassDOT to install chargers at all Mass Pike service plazas, five commuter rail stations, five substation stations, and at least one ferry terminal.
The bill also targets transportation network company vehicles with a new program that would include requirements for vehicle electrification and the reduction of GHG emissions from companies like Uber and Lyft. Finally, the bill includes considerations for the electrification of some public transit, by mandating the MBTA to only buy zero-emission vehicles for their bus fleet beginning in 2030, and to have an entirely zero emission fleet by 2040. As directed, the MBTA must also begin to factor emissions and climate resiliency into its capital planning, and to consider bus maintenance facility upgrades and the prioritization of zero-emission fleet deployment in routes covering underserved with a high percentage of low-income households. State agencies will also be required to help regional transit authorities develop plans for electrified school bus fleets.
The 2022 climate bill has several renewable energy components like the expansion and institutional support of offshore wind development, solar deployment, regional collaboration on transmission and distribution infrastructure, and the promotion of renewable energy innovations like networked geothermal. In addition to establishing a Massachusetts Offshore Wind Industry Investment Trust Fund and removing the offshore wind price cap for new projects, the bill places bid selection within the hands of DOER and an independent evaluator and encourages greater weighting on bid selection criteria like manufacturing investments, equitable workforce development commitments, supply contracts with minority and women-owned small businesses, and other environmental and socioeconomic benefits. The bill also provides flexibility for farmers to explore solar energy deployment on working agricultural lands, and scraps existing rules limiting properties to only one solar installation that can qualify for net metering.
Within the Massachusetts Clean Energy Center (MACEC), this bill establishes a Clean Energy Investment Trust Fund to help scale up all kinds of renewable energy initiatives, and gives MACEC the ability to help companies working on renewable innovations like nuclear fusion, networked geothermal, and deep geothermal energy technology.
Finally, the bill has components that amend the Department of Public Utilities’ (DPU) mandate, to further consider renewable energy and emissions reduction efforts, particularly in the process of aging gas infrastructure replacement. The DPU is tasked with convening a Stakeholder Working Group to develop recommendations for regulatory and legislative changes necessary to align gas system enhancement plans with our statutory emissions limits and sublimits established in the Climate Act of 2021.
Grid Modernization, Energy Resilience, & Energy Reliability
A Better City was grateful to see that the 2022 climate bill establishes a Grid Modernization Advisory Council to help explore and encourage least-cost investments in electric distribution systems, interconnection solutions, and enhanced grid resilience and reliability. As per this bill, DPU shall direct each electric company to develop an electric-sector modernization plan that they will submit to the Grid Modernization Advisory Council to proactively upgrade the transmission and distribution systems to: 1) improve grid reliability, communications, and resiliency; 2) enable increased, timely adoption of renewable energy and distributed energy resources; 3) promote energy storage and electrification technologies necessary to decarbonize the environment and economy; 4) prepare for future climate-driven impacts on the transmission and distributions systems; 5) accommodate increased transportation electrification, increased building electrification, and other potential future demands on distribution and transmission systems (where applicable), and; 6) minimize or mitigate impacts on ratepayers while achieving our GHG reduction goals.
The bill also directs DOER to catalog all energy storage technologies currently available and under development in the state, and to issue recommendations on how to increase storage capacity to the grid. Through this process, the bill increases DOER’s ability to issue solicitations for energy storage, to up to 4,800 gigawatt-hours of storage (a considerable amount). This bill also establishes a Clean Energy Transmission Working Group to study the most effective ways to work with surrounding New England states to upgrade existing transmission capacity and/or build new lines. Finally, the bill authorizes DOER to start soliciting bids from companies that want to build an offshore transmission system to help bring power from offshore wind projects onshore.
Within MACEC, this bill also bolsters the Clean Energy Equity Workforce and Market Development Program to provide equitable workforce development opportunities and offer grants that would support employment in the building electrification and energy efficiency sectors, among others like offshore wind. This program also includes an offshore wind-specific training program for high schoolers that is state-funded, and establishes tax breaks for companies helping to build a domestic and localized supply chain and workforce for the industry.
We will continue to monitor how H.5060 will interact with city-level policies like Boston’s home rule petition to ban fossil fuels and parallel state climate policies, and will continue to urge regional consistency and alignment across climate policies whenever possible. While the bill establishes several new trust funds to help implement climate and clean energy initiatives, it is not entirely clear where all the money will come from to help support these robust programs. Additionally, as we mentioned in the context of building energy reporting, there may be additional hidden costs associated with implementation that are not captured in this bill. Separately, we are thrilled to follow federal policy updates with President Biden also signing into law the historic Inflation Reduction Act, which could potentially help to fund myriad equitable climate and clean energy solutions in Massachusetts (please see our blogpost on the Inflation Reduction Act in our forthcoming newsletter). A Better City remains engaged and committed to identifying equitable climate funding opportunities that can help to scale up our clean energy initiatives and to achieve our statutory climate commitments.