The New Balance: Environment and Energy

Robert Ruddock

The Massachusetts Biotechnology CouncilLaw and Policy Committee

July 9th, 2009

Business as Usual: 90 plus years Vertically integrated regulated utilitiesEvolving environmental rules

Restructuring Revolution 1997/8Competitive generation/electricity salesRegulated distribution/transmission

Environmental Revolution 2007/8/9GHG driverProfound consumer/ratepayer impacts: cost,

generation and conservationKey Points:

No cost effective technological fix for CO2 reduction

Not a localized pollutant

Context

Mechanisms: OverviewRegional Greenhouse Gas Initiative (RGGI) –

northeast statesFederal legislation (proposed)Massachusetts Green Communities Act (GCA)Massachusetts DPU: Decoupling OrderMassachusetts Global Warming Solutions Act

(GWSA)ISO NE: Transmission projectsDPU National Grid/Bay State Gas cases - now

Mechanisms (cont.)Regional Greenhouse Gas Initiative

(RGGI) – northeast statesCap/trade model100% auction80% Massachusetts revenues to energy

efficiency Federal legislation (proposed)

Cap/trade approachNot 100% auction

Mechanisms (cont.)Massachusetts Green Communities Act

(GCA)Energy efficiency/conservationRenewable Portfolio StandardsEnergy building codeSmart Grid

 Massachusetts DPU: Decoupling OrderAlign utility goals with efficiency goals

Mechanisms (cont.)Massachusetts Global Warming

Solutions Act (GWSA)Statutory reduction (1990 emissions) goals: all

GHGs2020 (10-25%) 2050 (80%)Secretary EOEEA rules –discretion: ten

working groups/DEP ISO NE: Transmission projects

Mechanisms (cont.)DPU National Grid/Bay State Gas cases –

nowRate increasesDecoupling

Big Picture Impacts on Consumers/Ratepayers/Society Costs

RGGI – through power rates GCA – add-ons costly Decoupling – loss of efficiency savings on distribution side GWSA – impacts on electricity and individual operations

Benefits Reduced GHG Opportunity for efficiency improvements New jobs for the economy Reduced costs over time

  

Practical Implications Funding for on-site renewables, CHP,

efficiency Lower costs in the long run Facility operations affected by:

increasing electricity costscontinuing efficiency paymentson-site GHG regulation (?)

 Implementation of new laws – consumers united