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Massachusetts Doubles Size of “SMART” Solar Program

The Commonwealth of Massachusetts is pursuing various regulatory actions to implement state policy to reduce greenhouse gas emissions from electric generation resources. As we previously reported, the Commonwealth is planning to implement a Clean Peak Standard (“CPS”) program this summer, which is designed to have renewable electricity generation resources “show up at the right time” on the grid to coincide with times of peak demand. In a complementary action, the Commonwealth has now doubled the size of its Solar Massachusetts Renewable Target (“SMART”) incentive program, along with new  performance standards for the siting of these renewable generating resources. While these changes to the SMART program were adopted as emergency regulations—making them effective immediately—the Commonwealth will go through the notice and comment rulemaking process over the next few months to provide for continued input from stakeholders on the new regulations and associated guidance.

Background

The Massachusetts Department of Energy Resources (“DOER”) adopted the SMART program in 2018. The SMART program began as a 1,600 megawatts (“MW”) declining block voluntary incentive program for solar projects. Eligible solar projects are capped at no larger than five MW and must be interconnected with the systems of one of three investor-owned electric distribution utility companies in Massachusetts. The SMART program is voluntary, insofar as no solar project proponent is required to participate. See generally, 225 CMR §§ 20.00, et seq.

April 2020 Modifications to the SMART Program

On the heels of a review that the DOER commenced when the SMART program reached 400 MWs of subscribed projects, the DOER filed emergency regulations on April 14, 2020, that made several fundamental changes to the SMART program. Key changes to the program include the following:

  • The size of the program’s incentive target has been doubled from 1,600 MW to 3,200 MW of new solar generation capacity. 225 CMR § 20.05(1).

  • “Energy Storage Systems” are now generally required to be co-located with all solar projects over 500 kW in size, with limited exceptions. 225 CMR § 20.05(5)(k). An Energy Storage System is any “…commercially available technology that is capable of absorbing energy, storing it for a period of time and thereafter dispatching the energy.” 225 CMR § 20.02. The Energy Storage System must also be eligible for the program’s “Energy Storage Adder,” which, in turn, includes criteria for: (1) nominal rated power capacity, (2) nominal useful energy capacity, (3) minimum efficiency, (4) performance data, (5) operational requirements, and (6) other metering and reporting requirements. 225 CMR § 20.06(1)(e). Ultimately, the change appears consistent with the anticipated arrival of the CPS program this summer. Conceptually, the requirement for these relatively larger solar facilities to have on-site Energy Storage Systems should facilitate the CPS goal to have the generated solar power available at times of peak demand.

  • The siting of solar projects on undeveloped or limited development lands has been further discouraged by increasing the applicable “Greenfield Subtractor” by 2.5 times its current amount. 225 CMR § 20.07(4)(g). As the name suggests, the Greenfield Subtractor works to provide less of an incentive for projects sited in certain areas (g., previously undeveloped property or open space). Historically, application of these criteria involved a fact-specific inquiry, and the changes underscore that this fact specific-inquiry will continue. Stakeholders and project proponents need to carefully review the categories of land use and siting criteria, and the associated potential exemptions, which now apply to projects looking to enroll in the SMART program after the publication date of the regulations. 225 CMR § 20.05(5)(e).

  • The Commonwealth builds upon its changes to the siting and land use criteria by expanding the program’s “ineligible land use areas” to include “Priority Habitat,” “Core Habitat” and “Critical Natural Landscape,” subject to limited exceptions. 225 CMR § 20.05(5)(e)(7)(c). Core Habitat and Critical Natural Landscape are mapped areas established through the Massachusetts Natural Heritage and Endangered Species Program BioMap 2 guide, while Priority Habitat is an established term and standard defined under the Massachusetts Endangered Species Act, M.G.L. c. 131A (“MESA”), and its implementing regulations. These terms are now included or cross- referenced in the SMART regulations. 225 CMR § 20.02 and 321 CMR § 10.02. Accordingly, understanding the eligibility of land use for the SMART program requires a careful crosswalk to MESA and its implementing regulations. 321 CMR §§ 10.00, et seq.

  • The eligibility criteria for low-income customers was expanded by including “Low Income Eligible Areas.” A Low Income Eligible Area includes: “[a] neighborhood, as identified through American Community Survey data, that has household income equal to or less than 65 percent of the statewide median income for Massachusetts.” 225 CMR § 20.02. Accordingly, customers no longer need to be on an electric distribution company low-income discount rate, but may now be eligible for the SMART program if they are located in a Low Income Eligible Area.

  • The definition of “Public Entity Projects” was expanded, and its applicable incentive “adder” was increased. The applicable definition of “Public Entity Solar Tariff Generation Unit” previously limited these types of units to those sited on property owned or operated by a municipality or other governmental entity. Now, the definition accommodates siting on private property, as long as it is either “(i) owned or operated by the Municipality in which the Solar Tariff Generation Unit is sited; or (ii) the Owner has assigned 100% of its output to the Municipality or Other Governmental Entities in the Municipality in which the Solar Tariff Generation Unit is sited.” 225 CMR § 20.02. The incentive adder for these types of units was increased from $0.02 to $0.04 per kWh.

  • Additional provisions for low-income projects and midsize projects that are between 25 kW and 500 kW were also incorporated. 225 CMR § 20.05(3)(c)-(d). These changes are designed to reserve a certain percentage of the SMART program’s capacity blocks for projects in these categories.

  • Finally, there are further modifications made to the SMART program’s implementing “Guidelines,” including those established for Land Use Siting and Project Segmentation, as well as Statement of Qualification requirements. These Guidelines are an important set of clarifications, interpretations, and procedures, including forms, developed by the DOER to implement the SMART program.

In addition to this list of key changes, all of the most recent changes to the SMART regulations and changes to the Guidelines bear close scrutiny by interested stakeholders. In particular, since many of the changes reflect the Commonwealth’s energy mix and other policy considerations, the fine contours of the SMART program, as now revised, may bear little resemblance to solar incentives offered in other state jurisdictions.

Procedural Next Steps

Because the changes to the SMART regulations were adopted on an emergency basis, the changes are effective for a period of 90 days. For the changes to become permanent, the DOER must proceed through the notice and comment rulemaking process during this 90-day window. Accordingly, the DOER simultaneously announced that, due to the COVID-19 pandemic, it will hold a virtual public hearing on May 22, 2020. The DOER is also accepting written comments on the modifications to the SMART regulations and Guidelines through that date. More information regarding this process is available on the DOER website.

Copyright © 2020, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume X, Number 125

TRENDING LEGAL ANALYSIS


About this Author

Michael Altieri Environmental Attorney Hunton Andrews Kurth Law Firm
Senior Attorney

Michael’s decades of government experience provide clients a valuable resource for permitting, compliance and enforcement issues relating to air, water and waste.

Prior to joining private practice, Michael worked for natural resources agencies in Massachusetts and New York, where he oversaw permitting, dispute resolutions and enforcement actions involving infrastructure construction projects, energy projects, contaminated lands and much more. Michael’s extensive agency background provides clients with in-depth knowledge of the interplay between state and federal environmental law...

617 648 2770
David C. McSweeney Environmental, Health & Safety Attorney Hunton Andrews Kurth Boston, MA
Counsel

David counsels clients through the lens of a former in-house attorney to provide insightful and practical advice. He understands a client’s business and the unique policies related to environmental, health and safety (EHS) legal issues associated with permitting, compliance, transactional due diligence, regulatory development, enforcement defense and related litigation.

David’s practice focuses on EHS matters, especially those involving the Clean Air Act (CAA), Clean Water Act (CWA), Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and Resource Conservation and Recovery Act (RCRA). He has nearly 20 years of experience working with energy clients, including oil, natural gas and natural gas liquids (NGL) companies, renewable energy companies, pipelines, domestic and international manufacturers, banking institutions, and corporate and individual clients. In addition to a myriad of matters associated with environmental and land use permitting, compliance and/or enforcement, David provides experienced corporate counseling for institutional clients regarding issues associated with environmental, social and governance (ESG) concerns, including internal assessments and auditing, reporting and disclosure concerns, with a focus on climate change. David has led environmental legal due diligence and transactional negotiations for asset and equity based transactions, brownfields redevelopments, and coordinated response and remedial actions for hazardous environmental releases. His work with clients on permitting, compliance and enforcement defense matters has led him to regular interaction with agency staffs, at US Environmental Protection Agency (EPA), US Army Corps of Engineers (Corps), US Fish and Wildlife Service (FWS) and equivalent state agencies and historic preservation officers.

Prior to joining Hunton Andrews Kurth, David was lead in-house environmental counsel for a Fortune 500, diverse midstream energy company.

Relevant Experience

  • Extensive experience with siting, permitting and compliance counseling for energy facility and linear projects, including but not limited to pipeline projects, associated compressor and/or boosting stations, natural gas/NGL processingplants and fractionation facilities, and onshore wind power generation projects.
  • Specific project involvements include, but are not limited to, legal advice and consultation on the following: New Source Review (NSR) (including Prevention of Significant Deterioration and/or Non-Attainment NSR) and/or Title V Permitting under the Clean Air Act and related state statutes/regulations; National Environmental Policy Act (NEPA) matters involved with both Federal Energy Regulatory Commission (FERC) pipeline construction projects, including pursuit of Department of State Presidential Permits for international boundary crossings; wetlands and waterways permitting under the CWA and related regulations, including federal Nationwide Permits; endangered species permitting, compliance and consultation under federal and state endangered species acts and regulations; and cultural resource compliance under the National Historic Preservation Act (NHPA) and related consultations between federal, state and tribal authorities.
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Christopher J. Cunio Litigation Attorney Hunton Andrews Kurth Boston, MA
Partner

Christopher handles complex commercial litigation, government investigations and business disputes of all sizes and varieties.

Chris has litigated and tried matters involving real estate, environmental contamination, breach of contract (including Information Technology contracts), fiduciary duty, employment law, regulatory process, administrative appeals, intellectual property, and internal and external investigations. He staffs each case based on the subject matter involved, the amount in dispute, the scope and complexity of the issues, and the eDiscovery demands for efficient and...

617-648-2743
Lauren A. Bachtel Environmental Attorney Hunton Andrews Kurth Washington, DC
Senior Attorney

A former US Department of the Interior and American Wind Energy Association lawyer, Lauren draws on her diverse experience to navigate clients through complex permitting and compliance issues that arise under a host of federal environmental statutes and regulations. She also advocates for clients during related administrative rulemakings and litigation.

Lauren has extensive experience with permitting and litigation under the National Environmental Policy Act (NEPA), Mineral Leasing Act (MLA), Endangered Species Act (ESA), Migratory Bird Treaty Act (MBTA), Bald and Golden Eagle...

202-419-2011