The Nickel Report

On March 18, 2021, the Massachusetts House joined the Senate in passing a revised, historic climate legislation that appears to finally have enough support from the Governor’s office to be signed into law.  As we have highlighted in this blog previously, complete agreement between the Commonwealth’s executive and legislative branches on the Next-Generation Roadmap for Massachusetts Climate Policy S.9 (the “Bill”) has proven elusive.  When we last left this topic, the Governor of Massachusetts was faced with a decision to: (1) sign the Bill; (2) veto it for a second time; or (3) return the Bill to the Legislature with recommended amendments.  On February 7, 2021, the Governor did the latter, returning the Bill to the Legislature with approximately 50 recommended changes to various sections within the Bill.  On March 15, the Senate adopted certain further amendments to the original Bill, which the House then likewise adopted on March 18^th, and again laid the Bill before the Governor. This leaves the Governor another ten days to either sign the Bill or veto it for the third time and face the possibility of a Legislative override.

Since the vote to pass the Bill, comments from industry, environmental groups, and the Massachusetts Executive branch have been generally positive.  For example, the Secretary of the Executive Office of Energy and Environmental Affairs voiced support for the Bill, along with key industry trade groups and non-governmental environmental groups.  The industry support indicates that some of the more controversial items in the original legislation have been resolved with the amendments passed with the Bill, which further lends itself to the likely conclusion that the Governor will sign the Bill.  For example, support for the Bill was voiced on March 22^nd by the Boston Chamber of Commerce, which followed similar comments last week from the CEO of NAIOP Massachusetts.

Key to the support of the Act by the Chamber and NAIOP were the Act’s amendments to address the proposed requirements for the state’s building code to advance construction with net-zero emissions.  In his veto of the earlier version of the Bill, the Governor drew concerns on this issue due to the drastic housing matters that the Commonwealth faces with respect to a shortage of affordable housing, and the concerns that the net-zero energy stretch code could slow the development of new housing while raising costs for Massachusetts families.  The Amendments to the Bill give the Commonwealth six more months to develop rules for new construction and allows municipalities that currently receive funding under the Green Communities Act of 2008 to maintain their status as “green communities,” even if they don’t opt-in to the net-zero stretch energy code.

The Bill includes broad, varied, and numerous provisions designed to affect the Commonwealth’s goal of net-zero emissions by 2050.  To this end, the Bill includes a statewide emissions limit, enhanced provisions to address environmental justice issues, allows towns to adopt local net zero stretch codes, increases off-shore wind development and the state’s renewable portfolio standard, and for the first time requires the Department of Public Utilities (“DPU”) to account for climate change and greenhouse gas emissions in its administrative decision making.

Key provisions of the Bill include, but are not limited to, the following:

• Establishes statewide emissions limits. Massachusetts will now set emissions limits every five years and will require the state to adopt “emissions sublimits” for the electric power, transportation, commercial, industrial and residential energy (heating and cooling), industrial manufacturing, and natural gas distribution sectors of the Commonwealth’s economy.
  • Makes legally binding the statewide greenhouse gas limit for 2050 at net-zero, as opposed to the previous target of 85% reductions by 2050.
  • Requires 50% reductions by 2030, which rejected the Governor’s proposed amendment of a 45% reduction.
  • For the first time, it requires municipal light plants to meet emissions standards, requiring them to purchase 50% non-emitting electricity by 2030 and get to “net-zero” emissions by 2050.
• Environmental Justice Matters. Notably, the Bill amends the Massachusetts Environmental Policy Act to address environmental justice by defining environmental justice populations and providing new tools, protections, and public input for these communities.
• Allows municipalities to adopt local net-zero stretch codes. Mandates the administration to create a local net zero stretch energy code that municipalities would have the option to adopt. Adds four new seats to the Board of Building Regulations and Standards (“BBRS”) for experts in building energy efficiency, advanced building technology, and the Commissioner of the Department of Energy Resources (“DOER”). Also transfers responsibility for energy code development to the DOER and away from the BBRS.
• Sets Massachusetts appliance efficiency standards to mirror those established in California.
• Increases the amount of offshore wind utilities are required to purchase by an additional 2,400 megawatts. This builds upon previous legislation and will result in a total authorization to 5,600 megawatts of offshore wind for Massachusetts. It also gives the DOER a second opportunity to require a joint solicitation for offshore wind transmission independent of offshore wind energy generation. A prior DOER effort on this front stalled-out for a host of reasons, however, given the increase in the purchase of offshore wind generation coupled with a second explicit grant of power for DOER to require the solicitation for transmission only projects, the prior determination may be revisited.
• Boosts the Commonwealth’s renewable portfolio standard by 3% each year for 2025-2029.
• Incorporates climate considerations into the DPU’s enabling legislation. Going forward, the DPU would be required to balance priorities for system safety, system security, reliability, affordability, equity, and, significantly, reductions in greenhouse gas emissions.
• Allows utilities to pilot renewable thermal technology. Authorizing utilities to pilot renewable thermal energy sources, systems or technologies capable of substituting for fossil-fueled natural gas, including geothermal heating and cooling. The Bill also gives incentives to hydrogen energy and fuel cell technology.

One way or another, it is anticipated that the Bill will, at some point soon, now become law.  In so doing, it will further fundamentally alter the electric power; transportation; buildings; industrial manufacturing; and natural gas distribution sectors of the Commonwealth’s economy.  The Bill contemplates many changes and much work remains to unfold over the next several decades, as we move toward 2030 let alone 2050. Despite the holistic, and in some cases, detailed approaches of the Bill, it does little to foretell how these changes will be implemented on a day-to-day basis. In fact, it’s very likely that the growing strains and pains of such dynamic alterations on laws, regulations and programs which impact the Commonwealth’s economy will test the Commonwealth in numerous directions and undoubtedly there will be legal challenges to some or all of the Bill’s provisions, if and when it becomes law. Nonetheless, the Commonwealth is certainly poised, motivated, and willing to tackle the enduring challenges of climate change.