Legislation on Beacon Hill that would increase the amount of renewable energy Massachusetts utilities must buy and require competitive bidding for the green power is on the verge of becoming law.
Provisions in separate bills approved by the House and Senate that would revamp the state's 2008 Green Communities Act highlight the delicate balance lawmakers must strike in attempts to boost renewable energy production while keeping a lid on the cost of electricity.
The bills, now before a conference committee, increase the amount of electricity from renewable energy projects that can be sold back into the grid. Both require a more than doubling of the renewable energy utilities must buy. Buying the power would require competitive bidding, a measure that is considered a response to the noncompetitive process used by Cape Wind to sell more than 75 percent of the power from the proposed Nantucket Sound wind farm to NStar -- now owned by Northeast Utilities -- and National Grid. When Cape Wind entered into contracts with the two utilities it was allowed to do so without going out to bid.
"That was probably as much as anything else the reason why I voted for the overall bill," said state Rep. Randy Hunt, R-Sandwich.
Hunt, who serves on the Joint Committee on Telecommunications, Utilities and Energy, said he expected a final bill to come out of conference committee and be voted on shortly. Lawmakers are pushing to vote on the bill before the end of the legislative session July 31.
NStar has expressed its support for the goals of the Green Communities Act in the past, Northeast Utilities spokeswoman Caroline Pretyman said.
"Obviously these bills serve to further those goals," she said. "We've also pointed out that the costs to consumers are substantial."
The proposed changes to the law would cost the utility's customers an estimated $350 million, Pretyman said.
The push for more renewable energy and the consequent benefits and costs are policy decisions that are in the hands of lawmakers, she said.
Another provision in the two bills, which requires the state Department of Public Utilities to review how much utilities charge customers on a regular basis, could have unintended consequences, she said.
"Since 1985 only one of the 31 rate cases that have been filed with the DPU have resulted in a decrease," she said.
In a July 12 letter to the conference committee, the Associated Industries of Massachusetts objected to several provisions, including one in the House bill that requires long-term contracts with new gas-generating plants at locations of existing coal- or oil-fired power plants.
The organization pushed for a requirement that above-market costs be paid by customers who buy the power and not by all distribution customers. It also sought stronger language on competitive bidding for long-term contracts to avoid the noncompetitive negotiations allowed in the case of Cape Wind.
"This option has been used only once -- despite hundreds of renewable energy projects being eligible -- to make sure the politically favored Cape Wind project received out of market contracts, a massive failure, we believe, of the open and transparent intent of the legislation," Associated Industries of Massachusetts senior vice president Robert Rio wrote in the letter.
The Cape Wind contracts were exhaustively reviewed and found to be cost-effective, in the public interest and providing unique benefits not available elsewhere, Cape Wind spokesman Mark Rodgers countered.
"Nothing in the proposed revisions challenges that conclusion, and 'cost-effective' remains the relevant standard," Rodgers said.
The proposed legislation does not address so-called "wind energy siting reform," a hotly contested issue, especially among residents in places such as Falmouth where land-based wind turbines have prompted a backlash from some neighbors.
"Some people thought that this was that," Hunt said.
Instead the Legislature required that the state Department of Public Utilities write regulations for the permitting of wind turbines, Hunt said.
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