OUR COMMON FUTURE
Bold Leadership for Clean Renewable Energy in Massachusetts Democrat for Governor
Bob Massie Policy Series – Our Common Future: Energy
Acknowledgments
Special thanks to our energy and environmental advisory board members and to a host of independent energy and economic advisers for their time and contributions to this Massie Energy Plan. This group enriched the process of refining my energy policy and provided a sounding board to ensure that the resulting policies and action recommendations will deliver tangible positive results for the Commonwealth. While writing this policy document, I was constantly reminded of something Robert F. Kennedy once said, paraphrasing George Bernard Shaw, which seems highly applicable to the urgent task of transforming our energy system today: There are those that look at things the way they are, and ask why? I dream of things that never were, and ask why not?
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Table of Contents
I. THE VISION: LEADING MASSACHUSETTS TO 100% CLEAN RENEWABLE ENERGY ................. 3 Overview................................................................................................................................................................................. 3 Plan Elements ....................................................................................................................................................................... 3 II. THE CHALLENGE: ESCAPING THE SLOW STRANGULATION BY FOSSIL FUELS ........................ 6 The Electricity Sector: Overview ................................................................................................................................ 6 Why Are We Keeping Fossil Fuels On Life Support? ......................................................................................... 6 How Did We Get Here? Misaligned Incentives ..................................................................................................... 7 We Need Regulatory Change ........................................................................................................................................ 9 A New Approach to Regulation..................................................................................................................................11 A New Model for Utilities..............................................................................................................................................12 III. THE OPPORTUNITY: CREATING JOBS, BUILDING THE ECONOMY .......................................... 13 Expand our Resources and Rebalance the Portfolio .......................................................................................14 Modernize the Grid ..........................................................................................................................................................15 Environmental Justice and Public Health .............................................................................................................17 Buildings and Transport ...............................................................................................................................................19 Explore and Develop New Technologies...............................................................................................................20 IV. THE PATH FORWARD: GETTING TO A CLEAN RENEWABLE ECONOMY ................................ 21 Guiding Principles ............................................................................................................................................................21 Fostering Democracy with a New Regulatory Model .....................................................................................21 A Faster Transition to Clean Renewable Energy...............................................................................................22 Ensuring Energy Equity ................................................................................................................................................22 Reducing Total Energy Requirements ...................................................................................................................23 Managing a Smooth Transition ..................................................................................................................................23 V. THE RESULTS: MAKING A BETTER FUTURE TODAY WITH 100% CLEAN RENEWABLES ......... 24 We Can Do This Today ...................................................................................................................................................24 Our Common Future: The Transformative Impact of Energy on the Commonwealth ...................25 End Notes .............................................................................................................................................................................26
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I. THE VISION: LEADING MASSACHUSETTS TO 100% CLEAN RENEWABLE ENERGY Overview We are standing on the edge of the greatest opportunity for new and equitable prosperity the Commonwealth has ever seen – by making use of what nature provides us every day. We can accelerate the transition to clean renewable power, stabilize energy costs, drive fossil fuels out, improve public health, and expand the renewable sector of our economy to create, more and higher-paying jobs. This will increase and strengthen economic activity in the state, create additional tax revenues and open the door for Massachusetts to become a net exporter of energy. Plan Elements Six key plan elements drive our efforts in clean renewable energy as we work to build a common future. Addressing them will benefit every citizen in the Commonwealth: 1. Expand our clean energy capabilities with more solar and land-based and offshore wind, ground source heat pumps, and dozens of other existing technologies - thus lowering the cost of energy for families, towns, small businesses, and the state 2. Strengthen our commitment to environmental justice and address the social, environmental and health benefits of all of these actions 3. Keep the economic benefits within our region, building on our local renewable strengths, where possible 4. Foster energy democracy by putting consumers, some of whom are now producers with rooftop solar (“prosumers”), at the center of our policy initiatives, not outdated regulatory structures that preserve polluting fossil fuel investments 5. Build a more resilient, decentralized, electric infrastructure built on smart grid and microgrid technology to reduce storm-related disruptions and eliminate terrorist targets 6. Contribute to the climate change solution by backing up our support for the multistate U.S. Climate Alliance with substantive actions to meet our goals
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These six energy plan elements provide a framework for action to achieve specific goals. Massie Energy Plan Framework
Plan Elements
What, How & Why
Goal
1 Expand Clean Renewable Energy Capabilities
The fossil fuel industry is dying, and it is time to take it off life support and end its burden on Massachusetts taxpayers. I will stop all investment in new fossil fuel infrastructure. All new efforts will facilitate the transition to renewable energy, adding solar and wind capacity.
Let’s get to 50% Clean Renewable energy by 2030 and 100% by 2050, if not before. We can move the utilities back to serving the public, not the fossil fuel interests.
2 Strengthen Environmental Justice and Public Health
We can reduce air pollutants that are harming our citizens, particularly low income and communities of color, and stop building unnecessary pipelines and other infrastructure.
When Clean Renewable Energy reaches 100%, we will all breather easier, and air pollution-related health costs will drop.
3 Keep the The energy industry can produce tens of Economic Benefits thousands of new, clean renewable energy within our Region jobs that can’t be exported. Energy efficiency will also save large amounts of money for families and businesses.
We can end the transfer of $20 billion for fossil fuels out of state and keep the money in the local economy, adding jobs.
4 Foster Energy Democracy
We can rework the utility model and put consumers, some of whom are now producers with rooftop solar (“prosumers”), at the center of our policy initiatives, not outdated regulatory structures that preserve polluting fossil fuel investments.
Replace Public Utility Commissioners with prosumer advocates and reform the framework we apply to regulate public utilities in the Commonwealth by 2020.
5 Build a Resilient Grid for Increased Public Safety and Security
The old utility business model promotes huge generating stations and electric transmission lines that have become security targets. A more distributed generation model, with new storage and a modernized grid will reduce outages and increase public safety.
We can build a modern, maximally distributed grid with sufficient battery storage to eliminate peak demand issues by 2025.
6 Environment and Climate Change
At a moment of global crisis, we must switch to clean electric power and reduce our contribution to climate change
When Clean Renewable Energy reaches 100%, we will meet our targets to slow climate change.
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Clean renewable-based electricity is within reach and costs are already broadly competitive against fossil fuel-based electricity. According to the industry standard, the LCOE (Levelized Cost of Energy) measure, the operating cost of solar combined with battery storage today has fallen below the cost of just about everything else. And the cost of offshore wind is already below that of coal and certain other sources. Consider this: We have capacity for wind power off the coast of Massachusetts that is unmatched in the continental United States. We have the potential to dramatically increase solar installations. Unleashing this potential will take leadership and the will to overhaul our regulation of public utilities. We are no longer waiting for technological progress. We are waiting for decisive action and regulatory reform to end an outdated framework that protects utilities, not consumers. The United States will not be the first country to rely on 100% clean renewable energy. Iceland is just about there, with Costa Rica, Nicaragua, Scotland, Uruguay, and Germany close behind. But we could become the first state to become a dazzling 21st century clean energy powerhouse. And we could become a massive net exporter of clean renewable energy, drawing from a balanced base of offshore and onshore wind, solar, hydroelectric and anaerobic power supplies, and turn renewables into the largest single sector of our economy. We can drive fossil fuels not only out of electric generation, but out of transportation and heating too. We can stabilize energy costs, and bring thousands of new jobs to the state, while becoming more competitive on a global scale. This does not rely on some sort of magic, but on our willingness to accept innovation and new, tested technology. We were the first state to succeed at universal health care. Now we can be the first to implement 100% clean renewable energy. This is the future of Massachusetts – if we choose it. As governor, I will set us on that thrilling path.
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II. THE CHALLENGE: ESCAPING THE SLOW STRANGULATION BY FOSSIL FUELS The Electricity Sector: Overview ‘The Fossil Fuel Industry has dominated the American economy and our politics for too long. We have given them huge federal tax breaks and in return they have lied to the public about climate change and pursued an economic model which literally depends on the accelerating destruction of our fragile planetary balance. President Trump is determined to shore up these dying industries against all odds and Governor Baker’s administration is supporting that goal through its own treatment of the electric utility sector. We are stuck on a road and heading towards a cliff. Households and businesses struggle to pay for fossil fuel that imperils our health, our economy and the future of our planet. Some would have us believe that we can only change direction if we pay a premium for clean power – but this is simply not true. Solar and wind have lower direct costs than fossil fuels in many parts of the country, including here in Massachusetts. If we factor in the cost to health and the environment, renewable energy is more economical than fossil fuels. Instead, we are spending $20 billion a year importing fossil fuel from outside the state. Distributed across our population, this is the equivalent of $3,000 per person, per year. These costs burden individuals, businesses and municipalities. Without a change, we will spend approximately $400 billion over the next 20 years supporting oil and gas company profits. Instead, we should begin to wean ourselves off these dangerous, expensive, and unreliable fuel supplies. Why Are We Keeping Fossil Fuels On Life Support? Let’s be clear. Charlie Baker and his administration, including the Department of Public Utilities (DPU), work against the public interest. They are propping up an outmoded system that slows the potential transition to clean renewable energy reflected in the government projection below.
Figure 1. Change in Generation and Energy Efficiency Savings Under the Clean Power Policy Extension Casei
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I will stop all investment in new fossil fuel infrastructure. There is no supportable argument for making any further investments in new fossil fuel infrastructure today. We will take the steps necessary to stop such investments, and wherever possible, roll back recent decisions that may have inappropriately allowed such investments. How Did We Get Here? Misaligned Incentives Public utilities have played an important role in the development of the Commonwealth, dating to the early 1800s. The regulation of these utilities, which has evolved from the mid-1800’s to today, has for decades been based on a simple, but increasingly inappropriate set of principles: • Public utility companies are natural monopolies – for example, it would make no sense to have three separate gas pipelines or two parallel transmission networks. • The utilities want to produce, distribute and sell power to users – regulation can simply focus on rate-setting. • The utilities can recapture their infrastructure investments through rate increases. This framework has evolved slightly as utilities have shed much of their generation to independent power producers. However, the utilities still have stakes in some production and in pipeline transmission capacity to serve fossil fuel plants that feed them power. They have incentives to avoid measures like time of use metering that would reduce demand. And they rely on net metering caps that slow the pace by which the grid needs to adapt. Our utilities even have an interest in slowing investments in electric cars, because electric cars can provide significant grid storage that will reduce peak power needs and lower the cost of energy in peak and off-peak periods for all electric consumers. And they make money by building more pipelines whether they are needed or not. Arguably the Department of Public Utilities now functions more like a Department of Private Utilities, that long ago stopped operating in the public interest. The Commonwealth is not immune from the pressures of technological advances in clean renewable energy and neither should our Utilities Commissioners, the DPU or ISO-NE be immune from change. The basis for the natural monopoly rationale is gone. Any consumer or business can be a producer. Reducing load peaks no longer needs to rely on expensive peak capacity power plants that dramatically drive up overall energy costs. The old model is broken, but those who still make money are refusing to make change with the times. 7
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Instead, Governor Baker declines to accelerate the transition off fossil fuels, and supports and approves continued investments in outmoded fossil fuel infrastructure. For example, in the winter of 2014–15, record-breaking snowfall and freezing temperatures accompanied natural gas shortages across the state. Utilities called for the construction of new gas pipelines at the cost of tens of millions of dollars to prevent future shortfalls. Governor Baker’s DPU approved those investments, including new natural gas pipelines near active rock quarries and pump house stations that typically leak gas, near school buildings. These actions by the Baker Administration are made even more outrageous by this recently uncovered information: According to the Environmental Defense Fund, there was no shortage of natural gas pipeline capacity in 2014-15. New evidence suggests that the pipeline companies “reserved” or deliberately failed to use as much as 7% of their capacity accounting for 28% of the gas that would have been used by power generators, thereby artificially creating a shortage to justify the new infrastructure. Why? Probably because by doing so they quickly got permits to build infrastructure that they would earn hefty financial returns, even though it was not needed in 2014–15, or at any time since. A spokesperson for Attorney General Maura Healey's office said that they take the report seriously and are now looking into the findings, "after which it will take appropriate action." Even worse, there is near unanimous agreement in the industry that natural gas demand is about to go into freefall for the next thirty years as renewables increase market share and new battery storage capabilities make “gas peakers” obsolete. So, pipeline projects like those supported by the Baker administration were obsolete before the projects started. Nonetheless, the underlying investments will burden ratepayers for decades. Furthermore, instead of accelerating the transition to clean renewable energy, the DPU is empowering the utilities to block and kill renewable energy projects. They allow the utilities to profit from those actions at ratepayers expense. Our current DPU suffers from “regulatory capture” wherein the very organizations they are chartered to regulate are in effect dictating their every move. If Gov. Baker demanded that our DPU follow its charter of serving the public interest, it could work with the utilities to ensure a proper phasing out of fossil fuel infrastructure in order to reduce utility bills, clean our air and reduce our impact on climate change. If we instead continue to delay this transition to clean renewable energy, we will be locked into another 40 years of fossil fuel dependence.
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As families trying to make ends meet, we cannot accept this. As small business owners trying to create local prosperity, we cannot afford this. As human beings witnessing the decline of our planet, we cannot allow this. The costs of delay are clear. If we do not act swiftly and decisively we will be: • Increasing energy and transmission costs that drive up expenses for consumers and business • Accelerating climate change that increases frequency of extreme weather events • Wasting hundreds of millions of dollars and endangering neighborhoods and the environment by building new pipelines at a time when their need is being challenged • Expanding the reliance on fracked gas that endangers water supplies and public health in other states and subjects us to tremendous price volatility • Increasing healthcare costs from fossil fuel pollution that exacerbate asthma, heart and lung disease • Supporting fossil fuel demand that adds to global instability and terrorism and wastes $5 trillion in subsidies • Stalling offshore wind projects that allows other states to step forward and seize the opportunity that we are neglecting Stretching out the transition will not reduce risk, but will increase costs while protecting dirty energy sources. We Need Regulatory Change We know from history that when economies evolve, public and private organizations will fight to protect their self-interest. Utilities and energy companies have asked Governor Baker to help them slow down the transition in order to squeeze more profit out of their failing business models. Governor Baker’s actions suggest that he is more than willing to put his foot on the brake of change. For example: •
Our Department of Public Utilities, with the full support of the Baker Administration, rewards expanded investments in the current system, limits net metering and slows solar and wind projects across the state.
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•
ISO-New England, a quasi-independent entity that effectively manages the New England electric grid and influences generation decisions, is broken. Its mantra that it is pursuing a mission of “energy security” means that it is favoring grossly inefficient ways of maintaining our energy supply. For example, ISO-NE pays billions of dollars a year for energy companies to build and maintain facilities that only need to be switched on for several hours or days each year – at the very moment that new systems of energy storage may make them obsolete. ISO-NE is also largely hidden from public view, effectively controlled by the utilities, and more often than not works to slow the growth of renewables instead of being its champion.
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Gas pipeline builders and owners are locked into perpetuating the use of a “bridge fuel”, which is a bridge that leads to nowhere.
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Utilities like National Grid and Eversource with massive sunk investments built around fossil fuel generation have continued to charge our citizens excessive prices, demonstrating that they care more about their shareholders than about the future of the Commonwealth. Utilities like Eversource are also fighting to remove time of use pricing, which will discourage conservation efforts (Time of use pricing was introduced during the Patrick Administration and is now being quashed by the Baker Administration)
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The nation’s frackers, oil refiners and suppliers whose interests are being protected by a president who has handed over the EPA, the Department of Energy, the Department of the Interior, and the Department of State to extremist fossil fuel advocates.
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Massachusetts is lagging other states. Renewables make up only 12% of our energy supply today. By 2020, California will be at 50%, and at 100% by 2050. In Massachusetts, we have a Renewable Portfolio Standard (RPS) that will not get us to 50% before 2055. We should be targeting 100% before 2050.
The basis of current regulation focuses on negotiating infrastructure spending and rewarding that spending, under the outdated “natural monopoly” framework. When any homeowner, school or business can be a renewable energy producer and seller, the natural monopoly framework collapses under its own weight. That framework has outlived its usefulness. This approach has not contained rates, has not accelerated retirement of fossil fuel assets, has not adequately supported expansion of clean renewable energy infrastructure, has not put us on a fast track to a more resilient grid, and has not led to adequate increases in storage capacity, among other shortcomings.
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A New Approach to Regulation We need to design new common-sense regulations to achieve new goals. The state of New York has moved toward a performance-based regulatory structure, which they refer to as “Reforming the Energy Vision” or REV. REV includes some consideration for phased retirement of non-renewables infrastructure and puts customers, not the utility companies, first. Figure 2. New York State Public Utility Commission REV Program
We can adapt the New York approach with progressive adjustments, which will enable us to catch up with other states and countries that are already farther along in the shift to clean renewable energy economy. We need new appointments to the Commonwealth Utilities Commission, to which our DPU reports, a revamped DPU using a performancebased regulatory approach similar to, but more progressive than, New York’s and a completely new set of goals. This will allow Massachusetts to: •
Accelerate the shift to clean renewable energy;
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Stabilize and lower energy costs as a share of family budgets; 11
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Reduce outages with a more stable, more decentralized grid;
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Improve public health;
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Reduce the pace of climate change;
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Save families real dollars that they can spend on other necessities; and
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Strengthen Massachusetts’ businesses and our local economy as a whole.
The men and women who work for our utilities are not bad people. Their creativity and talents could be used to move us forward, rather than holding us back. But we cannot expect them to drive structural change when the financial incentives reward them for staying put. Our common future of clean, renewable energy – distributed across the state rather than concentrated in massive centralized plants – will require us to shrink their size and decrease their control over Massachusetts’ households and businesses. A New Model for Utilities As part of the shift to performance-based regulation, utilities will be directly measured on whether they attain higher renewables generation targets, improve service reliability, and retire fossil fuel infrastructure. We need to be adding 2–5% per year in renewables to the current base, not 1% per year. To do that, we need to end the net metering cap that slow the adoption of solar power, step up grid improvements, accelerate renewable clean energy project approvals, foster coordination between renewable clean energy project developers, improve grid adaptability and add storage capacity to the grid. And to do so, we need to get the foxes out of the chicken coop. Dan Dolan, president of the New England Power Generators Association, recently commented on how the DPU and the utilities collaborate too closely on the design and approval of new projects, most of which favor fossil fuel. Today, they work so closely together on energy-related infrastructure procurements that effectively, we are allowing the foxes to guard the henhouse. “We simply don’t see a way for it to be an open and truly competitive process when you have that sort of structure in place,” Dolan commented. “It’s hard to claim that a [utility] company that writes the RFP, bids on the (request for formal proposal), and decides who wins the RFP is unbiased.” ii We must break free from this broken system. As governor, I will make sure that we do.
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III. THE OPPORTUNITY: CREATING JOBS, BUILDING THE ECONOMY Too often we have seen technology changes bring benefits to those who are already well-off, while leaving others behind. Though change is rarely even, smooth or simple, a new approach to energy would go a long way toward achieving greater economic justice. As governor, I will insure that the transition meets its objectives while assisting communities across the state - especially low income and communities of color. The transition to clean renewable energy could create tens of thousands of new well-paying jobs. Consider this: • The Massachusetts clean energy sector already employs nearly 100,000 workers at over 6,400 businesses across the state. • Clean energy is an $11 billion industry in Massachusetts and represents 2.5% of the gross state product. • Clean energy jobs represent 3.3% of the overall workforce in the state. • Three-quarters of the clean energy workers earn more than $50,000 per year. Now imagine what those numbers will look like if we were to encourage the industry’s growth and become a net exporter of clean renewable energy. The industry could grow to be ten or twenty times larger than it is today. The world is moving forward. Whether Governor Baker likes it or not, whether we are ready or not, the fundamental reshaping of the global energy industry is upon us. Europe is rapidly dropping fossil fuels, with some countries already generating 50% or more of their energy from wind and others preparing to ban all fossil fuel car sales within 20 years. China has committed $361 billion over just three years to expand their leadership in renewable energy. While the current US administration is trying to do the impossible – to turn back the clock on technology and separate itself from this historic and immensely powerful transition - we do not have to bow to the insanity flowing from Washington. We have the greatest opportunity in the history of the state to strengthen the local economy, dramatically grow jobs, and drive down costs through a strong clean energy policy. International investors are providing clear signals about the enormity of the opportunity before us, as the full cost of energy production for solar and wind plunges.
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Most exciting is that the solutions are well within reach. In my first years as governor we will make strong progress not only to address our immediate problems but to do what this state has always done – to set a path for future generations. Like all deep and vital change, this will require courage, planning based on science and justice, a comprehensive understanding of the opportunities, and strong, consistent leadership. This is not a job for the faint of heart, but for the intrepid American spirit that created this state and this nation. Expand our Resources and Rebalance the Portfolio Massachusetts produces 12% of its energy demand with renewable sources today, which has been rising at a rate of 1% per year, the amount required by our current RPS standard. In 2015, most of the electricity generated by Massachusetts power plants was from natural gas (64%). Additionally, in 2015, 9.4% of net electricity generation in Massachusetts came from renewable energy resources - almost two-thirds from solar, wind, and biomass and more than one-third from hydroelectricity.iii California, by contrast, has been increasing their renewable share by 2–5% per year and is already at 35%. By 2020, California should be at 50%. If your first reaction was, well, that’s sunny California for you, that accounts for the different pace between the Commonwealth and the Golden State. Guess again. There are enough potential projects in New England for Massachusetts to see 2–5% gains per year. The difference is regulatory policy and leadership. A higher RPS does much more than speed up the transition to clean renewable energy. An aggressive RPS can drive down the cost of renewable energy. In California from 2008 to 2016, the price of utility solar contracts declined 77%; and from 2007 to 2015 the price of wind contracts declined 47%.iv We need to adopt a new Renewable Portfolio Standard and associated supporting policies to drive annual renewable clean energy gains toward 3–5% per year. The renewables mix should include solar, onshore and offshore wind, anaerobic digestion, small and big hydro. Some advocate that we burn wood and other biomass because those sources can be grown and thus can be considered renewable - but they come with a high price in carbon emissions. Our greatest opportunity right now is to capture a large share of the offshore wind industry and make it ours. Off the coast of Massachusetts, we have the best conditions for wind generation in the United States. We should line up multiple projects instead of permitting one project at a time. This will allow us to build out the infrastructure economically to serve a full-scale operation and to build the support industries – construction, electrical work, software design, and many others – in our coastal and gateway cities. 14
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We should also go full throttle on programs to encourage on-shore wind development and solar farms in underutilized industrial zones and parking lots, as well as dispersed roof-top solar. We need policies to encourage solar farms in rural areas balanced with protecting prime farmland. Modernize the Grid One of the most important tasks ahead of us is modernizing the grid. But what is the grid? Ever wonder how electricity gets to your home? It’s delivered through the grid – a complex network of power plants and transformers connected by more than 450,000 miles of high-voltage transmission lines. The basic process: Electric power is generated at power plants and then moved by transmission lines to substations. A local distribution system of smaller, lower-voltage transmission lines moves power from substations to you, the customer.v However, that government definition above is already outdated. Today power is generated on residential and commercial rooftops, on small hilltop wind farms, on ocean wind farms, in rivers and streams, and yes, still in large power plants. The modern grid will possess smart sensors, self-programming thermostatsvi and software systems to allow two-way communication between power sources and end-users. Automated feeder switches and phasor measurement units (PMUs) vii sense two-way power flow along the transmission lines and provide an exact and comprehensive view of the entire interconnection. They enable rapid response to changes in grid conditions... Consumers can adjust their consumption to take advantage of off-peak rates. Under today’s system, we are being ripped off every year paying billions of extra dollars for “forward capacity generation,” which is a fancy way of saying that you build an extra natural gas-powered plant that you only turn on for a few hot days in the summer. This is like buying a new Cadillac that sits unused in the garage for 51 weeks of the year – good for car manufacturers and dealerships, bad for consumers. New battery storage technologies are changing the need for forward capacity generation. Battery storage prices have dropped significantly, and battery performance has improved, which means we don’t need those extra power plants.
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That’s particularly important since buying electricity on those rare days of “peak power” is extremely expensive, and those peak prices raise the amount that we pay the rest of the year. Today solar combined with battery storage is cheaper than natural gas peak power alternatives. You might think that we must be building storage at a fast clip to take advantage of the potential price savings. Guess again. The Baker Administration recently ignored its own Department of Energy Resources (DOER) recommendation that the state build 600 MW of new storage, and instead chose to build one-third that amount, or 200 megawatts (MW).viii, ix Meanwhile, other industry observers suggested a better target would have been six times the amount they approved, or 1.2 gigawatts (GW). The decision to underinvest in storage becomes a barrier to increasing the Renewable Portfolio Standard (RPS) goal and pushes up our everyday electric bills. Figure 1. Potential Benefits of Increased Energy Storage in Massachusetts x
Today, California, Hawaii, New York and Rhode Island lead in grid modernization efforts. A recently released Rhode Island report entitled “Power Sector Transformation” puts RI in the forefront with a comprehensive plan of grid modernization to create a faster transition to a renewables future.xi We need a similar effort in Massachusetts to drive grid modernization. Tired of resetting that clock on your microwave every time the power goes out? We must accelerate the pace of grid modernization, encourage the creation of small local “microgrids”xii to boost resilience, and increase storage. Such actions will not contribute to high utility profits, but they will help stabilize our energy costs and reduce our outages. 16
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So, what will it take to take full advantage of the immense opportunity in front of us? We need: • Technical know-how and engineering talent to install and maintain new clean renewable energy infrastructure, retrofit homes and commercial buildings and dismantle old fossil fuel infrastructure • Access to proven renewable energy components • Workers with the right skills and worker training capabilities to fill gaps • Sheltered port capabilities to support offshore wind • Open land and available rooftops available for wind and solar installations Governor Baker, despite a reputation for good governance, has at every opportunity favored energy business interests at the expense of taxpayers, at the expense of our state’s economy, and at the expense of public health. After years of scientifically and financially unsupportable energy decisions by the Baker administration, it’s time to recognize that the gears of energy transformation have been brought to a near standstill. This governor, like President Trump, appears to prefer to keep us in an outmoded energy world dominated by coal, gas fracking or high cost, high risk nuclear resources, rather than welcoming and guiding the transition to clean renewable energy. By contrast, I have not, and never will be influenced by or accept money from fossil fuel interests. As an added bonus, the clean renewable energy opportunity will provide a huge positive economic impact on parts of the Commonwealth that have been greatly neglected. For example, onshore and offshore wind opportunities can benefit employment in western and southeastern Massachusetts, and provide much needed economic stimulus to several struggling gateway cities. With the right guidance from our DPU, we can build up these regions, and keep billions of dollars in our local economies. Environmental Justice and Public Health As we prepare to spend money modernizing our infrastructure and investing in our resources we must be mindful of who will benefit and who is in need. Cleaner, cheaper energy will help all families and businesses with their expenses. Our communities will be healthier, and we can slow the dangerous impacts of climate change on our vulnerable communities and industries. We must pay special attention to those communities who have unfairly borne the impact of infrastructure that provides energy to all of us.
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Fossil fuel infrastructure often turns communities into “sacrifice zones”. Naomi Klein makes the case that fossil fuels require certain areas to be sacrificed to extraction and processing, to pipelines, and transmission lines and that the people living nearby are considered disposable by corporations and politicians who put profits over people.xiii Recently, Governor Baker spoke to the citizens of Fore River about the proposed compressor station project. In response to the concerns of one resident that “compressor stations emit raw methane and upwards of 38 volatile organic compounds. They are noisy. There are seven polluting industries within one mile of the proposed compressor station. The toxins and noise are present 24/7, with no relief,” the governor said that the Fore River Basin is not “virgin territory”. xiv Perhaps Governor Baker was alluding to the other polluting industries in this zone. In his comment, he both recognized the existence of sacrifice zones and condoned them. Apparently, Massachusetts communities should pay the price pay for the governor’s refusal to move away from dirty fuels. Renewable energy infrastructure is much more benign. Even offshore wind is now in that category, since virtually all of the projects under consideration call for placement out of sight of land. Switching to renewable energy will reduce air pollutants produced in Massachusetts. One recent community-driven success involved the shutting down of a coal generation plant in Holyoke. Today, the pollutant-spewing plant has been replaced by a solar and battery storage installation. If the state’s offshore wind potential is fully developed, the Commonwealth could also be in a position to export power into the Midwest, and cause more coal generating stations to shut down, thereby ending export of airborne pollution from those plants via prevailing winds into the Commonwealth. Shifting our transportation system to non-polluting electric vehicles will dramatically reduce the health impacts felt by communities located near highway and rail systems. These areas are disproportionately low income and often communities of color. There is also universal agreement from economists – from progressives to conservatives – that we could radically improve energy for everyone if we introduced a price on carbon, something that most major companies are already calculating internally. Some people worry that this would have a negative impact on families and small businesses, but we could turn that around, taking the money raised and giving it back to families as a “transition dividend” that would assist everyone with the costs of changing energy sources. With careful attention we can make certain that all communities – especially lower income ones – receive the full benefit of moving to the new energy sources and are no longer burdened with the economic and health impacts of maintaining the status quo. 18
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Buildings and Transport This energy plan focuses on power generation for electricity and its distribution. But nationwide, electric power only consumes only 39% of our total energy usage. 32% is consumed in heating fuels and 29% in the transportation sector.xv The Commonwealth’s existing programs that address building energy conservation have contributed to significant improvements across the state.xvi While those programs need to be continued, there is more that can be done. For example, Governor Baker has not funded any Property Assessed Clean Energy (PACE) programs in the state. PACE is an innovative mechanism for financing energy efficiency and renewable energy improvements on private property, both residential and commercial. While a Commercial PACE program effort is planned for 2018, it has been neglected and remained unfunded for 3 years. And there is no Residential PACE program, not even in the planning stage. The US Dept. of Energy publishes guidelines for such programs, but it is up to the state and Governor Baker actually to put them in place. Programs like PACE could play a significant role in ensuring energy equality by making capital available to prepare buildings for the transition to 100% clean energy renewables. Without equitable financing methods and incentives, for example, low income families will struggle with high utilities costs in commercial rental units while residents in single family homes, who may have easier access to conventional financing for energy conservation measures, will enjoy low energy costs. Other programs, like the Green Bank in Connecticut, help to bring hundreds of millions into the renewable energy marketplace by offering to set aside money in case any of the investment opportunities failed. This lowered the risk for private capital. Nearly a billion dollars of private money was brought in and because none of the loans ran into any problems the cost to the state ending up being zero. While Massachusetts complies with requirements for periodic building code updates and has a stretch building code that individual towns and cities can opt into, we can do better. Soon after taking office Governor Baker changed the rules so that the stretch energy codes, when adopted by towns and cities, no longer apply to building retrofits. Since we have many old homes and buildings that are now exempt from upgrades, this has sharply constrained the potential for achieving building energy savings across the state.
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The cycle of housing stock teardown and replacement occurs over a typical 50+ year cycle. For that reason, retrofit programs are critical to achieving significant energy reductions in building energy consumption. Governor Baker’s approach stands in sharp contrast to our neighbor to the west. New York state is currently partnering with a German firm that has developed an innovative, comparatively low-cost approach to turning high energy use structures into passive or net zero buildings, where the building produces as much or more energy than it consumes. We need to partner with New York to expand this program, revise the stretch code for retrofits, and put a PACE and/or Green Bank program in place to make certain that the retrofits and resulting energy savings are within reach of every taxpayer in the state. Our comprehensive transportation plan, which was released on February 1, 2018, includes proposed infrastructure and program changes like commuter rail electrification that will produce substantial energy savings, while improving transport service levels and lowering total transport costs. For example, much of the world has committed to slowing and stopping the sale of gasoline powered cars in the next 20–30 years and to switch to all electric vehicles. Finally, programs like the Regional Greenhouse Gas Initiative (RGGI) are enormously important, particularly in this post-Paris moment, when states and regions must pick up the challenge of reducing our carbon emissions. We should apply the same RGGI framework to attack the significant emissions of our transportation sector. Explore and Develop New Technologies Massachusetts is home to some of the greatest research universities in the world, including our public university system. The biomedical revolution was started here, and we should be a leader in creating new solutions for energy generation in an era of climate change. We are no longer in the realm of science fiction – there are hundreds of existing technologies already in use around the country and around the world that we should be adopting. For example, we could be using district heating and cooling using waste heat or sewer flows, capturing wave energy, and launching new designs of smaller cheaper windmills are just a few of the opportunities awaiting development and installation. We have the resources and the state should be spurring a coordinated approach to supporting, sharing and accelerating research and development of these and other innovations.
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Bob Massie Policy Series – Our Common Future: Energy
IV. THE PATH FORWARD: GETTING TO A CLEAN RENEWABLE ECONOMY Guiding Principles As I suggest at the very beginning of this document, there are many important steps, waiting to be embraced. We must: 1. Expand our clean energy resources and put an end to regulatory support for fossil fuel-based infrastructure that are holding back our ability to innovate and improve our lives 2. Strengthen our commitment to environmental justice and address the social, environmental and health benefits of all of these actions 3. Keep the economic benefits within our region where possible, building on our local renewable strengths 4. Foster energy democracy, putting consumers, some of whom are now producers with rooftop solar (“prosumers”) at the center of our policy initiatives 5. Build a more resilient, decentralized, electric infrastructure built on smart grid and microgrid technology to reduce storm-related disruptions and eliminate terrorist targets 6. Contribute to the climate change solution by backing up our support for the multistate U.S. Climate Alliance with substantive actions to meet our goals While the Baker Administration joined the multistate U.S. Climate Alliance (currently New York, California, Rhode Island, Washington and Massachusetts), the administration has failed to back up this commitment with meaningful specific steps. In fact, many of the Baker administration’s policies work directly against the goals of the U.S. Climate Alliance. There is a path forward, but standing still or blocking renewables will not get us there. So how will we get there? Fostering Democracy with a New Regulatory Model We will start by removing regulatory barriers that choke off smart changes in utility regulation. We will: 1. Remove the foxes from hen house duty, ending undue influence of utilities over ISO-New England, which controls our power grid 2. Charge our Department of Public Utilities with encouraging renewables growth, and require renewable-based power to grow from 1% to 4-5% per year, creating economies of scale that will drive prices below those of carbon-based fuels 3. Turn DPU regulation upside down, rewarding utilities when they find ways to lower the total capital in the rate base, while supporting microgrids, that will maintain and improve distribution network reliability 21
Bob Massie Policy Series – Our Common Future: Energy
4. Eliminate net metering restrictions that slow the adoption of fossil fuel alternatives forcing utilities to cope with the re-shaping of their industry A Faster Transition to Clean Renewable Energy We will accelerate the transition, pushing down costs with every action: 1. Make multiple awards to offshore wind developers and commit to long-term development, creating industry certainty and encouraging cooperation (The risk of not doing this could permanently jeopardize our opportunity as others lock up wind manufacturing and offshore construction resources that take years to build.) 2. Coordinate full build out of key infrastructure from the start, including undersea cables and interconnects to landside transmission. 3. Facilitate development of an onshore hub to support and service offshore projects 4. Invest more in energy research at state universities, including solar and onshore wind, and expand our partnerships with nations and international firms that are far ahead of us 5. Convert the state vehicle fleet to all-electric fleet by 2030. In Massachusetts we currently have a target to put 300,000 electric cars on the road by 2025, but the governor has done so little that there are only 11,000 out there today. To meet this target, we would have to sell an average of 41,285 cars (or 115 a day) for the next seven years. I already drive an electric car, the exceptional Chevy Volt. Why doesn’t Governor Baker? Having him appear at events in the vehicle of the future - built by American car companies – would send a huge signal, but he apparently has no interest in leading through his own behavior. Ensuring Energy Equity To ensure economic security through this the energy transition we will: 1. Support the “transition dividend” – a carbon price – in which families receive cash benefits to switch to renewable energy after the installation of carbon pricing system 2. Provide energy transition-related support for low- and middle- income families through tax adjustments, job retraining, support for domestic solar projects 3. Modify our Commonwealth’s electric car rebate program to be income-based, allowing lower income households to acquire all-electric vehicles 4. Work with ten other New England and Mid-Atlantic states to implement a regional greenhouse gases cap (similar to RGGI) targeted at transportation 22
Bob Massie Policy Series – Our Common Future: Energy
5. Align gas tax revenues with credits for economic hardship and actual infrastructure needs, with a planned transition to mileage and congestion pricing that supports full and responsible maintenance of our infrastructure 6. Drive jobs in the new clean, renewable energy economy into our gateway cities, in part by aggressive support of offshore wind that will help New Bedford and Fall River and much of the surrounding area. Reducing Total Energy Requirements We will also drive down energy consumption levels to ensure that the Commonwealth raises the bar for the rest of the country and improves our livability ranking: 1. Follow the recent decision by Amherst town meeting to pursue net zero targets in the building of all new public buildings in every Massachusetts town and city 2. Accelerate changes in the building code to green our buildings, adding jobs, and further driving down utility bill 3. Create a tax rebate system for energy efficiency conversions 4. Involve our students in greening our building infrastructure, distributing infrared cameras to high school libraries that can be borrowed by students to explore energy loss in the built environment, including their own homes Managing a Smooth Transition We will manage the transition to ensure we seize the full benefit of our clean energy future. 1. Create an Energy Innovation Roundtable drawn from industry, government, and universities, including the amazing resources in the UMass system, to bring our best ideas quickly to the forefront to reduce electricity costs and advance our renewables-based economy. The Roundtable would explore innovations to: •
Reduce peak power loads
•
Integrate electric car battery storage capacity into our networks
•
Foster microgrid developments with a leaner network backbone
2. Implement funding innovations like a Green Bank and forward-funding of clean energy infrastructure to offset initial impacts on low and middle income families 3. Create a coordinated curriculum in our vocational and college sectors for training technicians in energy fields 4. Explore and adopt new technologies for power generation, vehicles and district heating and cooling 23
Bob Massie Policy Series – Our Common Future: Energy
V. THE RESULTS: MAKING A BETTER FUTURE TODAY WITH 100% CLEAN RENEWABLES We Can Do This Today We have been waiting most of our lives to see the cost of renewable levels fall to competitive levels with polluting sources like coal, oil, and natural gas. That wait is over. Now is the time to improve the Commonwealth, its economy and its environment, while acting in collaboration with the rest of the world to protect our damaged planet. Unfortunately, our current Republican governor – who apparently does not want to cross this Republican president or the aggressively pro-fossil fuel corporate CEOs that Trump has put into his cabinet – does not have the drive, the interest, or the ability to lead this transition. His lack of passion has a source in his original and recent skepticism that climate change was even real. It’s hard to believe, but Charlie Baker was once a climate change denier. During his 2010 race for governor he said, “I am not saying I do believe in climate change. And I am not saying I don’t.”xvii His desire to avoid controversy, and his waffling and timidity in the face of overwhelming scientific evidence and physical urgency, are unworthy of the innovative tradition of our state. In summary, as governor of this Commonwealth I will pursue: •
Affordable renewables-based power for everyone
•
An explosion of renewable energy jobs, including tens of thousands of new skilled jobs
•
Stabilized and lower electricity costs, supported by a more resilient grid
•
A diversified economy, with a burgeoning renewable clean power sector that supports other growth sectors, like health care and hi-tech
•
Healthier homes and communities, with lower utility costs
•
Vibrant small business and manufacturing sectors, with stabilized energy costs and a more robust skilled worker base
•
A fully electric transportation infrastructure that runs on clean renewable energy
•
Air quality and public health improvements from all of the above
•
Reductions in our carbon impacts to exceed the Paris targets, lead the region and the country 24
Bob Massie Policy Series – Our Common Future: Energy
Our Common Future: The Transformative Impact of Energy on the Commonwealth Governor Baker likes to say we can’t do things because we don’t have the money or the ability. Here’s what we can do. We can become the largest exporter of offshore wind power in the eastern US, and the center of the off-shore wind development industry, bringing in billions more in economic activity and state tax revenues from this expanded sector of our economy. We can rapidly expand our solar base, requiring state funded building projects to be high efficiency, then net zero, then net positive for energy production. Projects like a new elementary school in Lexington, MA that will generate 25% more energy than the school needs to operate – converting the school from an energy burden to an energy profit center. We can facilitate the expansion of clean energy parks and clean energy farms, including the permitting of solar and wind arrays on rural land to support our farmers and their communities We can reduce our total energy bill with efficient, innovative building technologies to modify existing homes and build new homes that are much more energy efficient, We can convert to a non-polluting, fully electricity-based transportation system. Our modern history started with the wind that drove the Mayflower to our shores. That same wind can now be harnessed to carry us forward to a better future. We can. We must. And if I am elected governor with a mandate to lead us toward our common sustainable future, we will. To learn more or to sign up to support Bob Massie’s campaign for governor, please go to bobmassie2018.com
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Bob Massie Policy Series – Our Common Future: Energy
End Notes i While the national case in Table 1 involves phase out of proportionally more coal, New England could experience a similar fast transition, with clean renewables energy replacing nuclear and fossil fuels.
ii “Utilities on both sides of bargaining table,” Commonwealth Magazine, Fall 2017.
iii http://www.mass.gov/eea/energy-utilities-clean-tech/energy-dashboard/mass-energy-profile/
ivhttp://www.sfchronicle.com/business/article/California-may-reach-50-renewable-power-goal-by-
12354313.php v https://energy.gov/articles/top-9-things-you-didnt-know-about-americas-power-grid vi Making the Switch: Smart Technology and Grid Reform for the 21st Century by Lynn Scarlet, January 24th, 2017 http://www.choosingcleanenergy.org/making_the_switch/ vii http://www.arbiter.com/solutions/phasor-measurement-unit-(pmu)-solutions.php viiihttp://www.acecma.org/acecma/file/FY2017/EEAC/ACECMA-DOER_Cmr_Judith_Judson_10-2516_Presentation.pdf ixhttps://www.utilitydive.com/news/massachusetts-targets-200-mwh-of-energy-storage-by-2020/446281/ x Massachusetts state report recommends 600 MW energy storage target,” Utility Dive, Peter Maloney, Sept 19, 2016 [https://www.utilitydive.com/news/massachusetts-state-report-recommends-600-mw-energystorage-target/426483/] xi http://www.ripuc.org/utilityinfo/electric/PST%20Report_Nov_8.pdf xii Local grids that are interconnected to the public utility grid, but that can operate independently of the larger utility grid. xiii https://www.lrb.co.uk/v38/n11/naomi-klein/let-them-drown xiv An Open Letter to Governor Baker, by Alice Arena;
http://www.nocompressor.com/news/2017/4/24/an-open-letter-to-gov-baker xv https://www.eia.gov/energyexplained/?page=us_energy_home xvi This refers to programs run by the Office of Technical Assistance and Technology (OTA).
xvii Editorial, Boston Globe, “Charlie Baker’s willful ignorance,” The Boston Globe, February 11, 2010
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Bob Massie Policy Series - Our Common Future: Energy
Massie Administration Plan to Move Rapidly to a Sustainable Energy Economy FOSTER DEMOCRACY WITH A NEW REGULATORY MODEL 1 End undue influence of the utilities
End utility control of ISO-New England, which controls the energy grid
2 C harge our Department of Public Utilities Increase renewable-based power target from 1% per year to 4-5% per year to encourage renewables growth 3 Turn DPU regulation upside down
Reward utilities when they lower the total capital in the rate base, while supporting microgrids, maintaining and improving distribution network reliability, with a new framework in place by 2020
4 Eliminate net metering restrictions
hange these and other constraints on renewables growth that are slowing the adoption of fossil C fuel alternatives
ACCELERATE THE TRANSITION 5 M ake multiple awards to offshore wind developers
Commit to staging long-term development, creating industry certainty, encouraging cooperation and expanding our local economy.
6 C oordinate full build-out of key renewable infrastructure
Encourage early construction of shared undersea cables and interconnects to landside transmission for offshore wind
7 F acilitate development of an onshore service hub
Encourage construction of a hub in a gateway community to support and service offshore projects
8 I nvest more in energy research at state universities
Focus supported research on solar and wind, and expand our partnerships with nations and international firms that are far ahead of us
9 C onvert the state vehicle fleet to all-electric fleet by 2030
Take steps to achieve target of 300,000 electric cars in this state by 2025. To date, the Governor has done so little that there are only 11,000 on the road. I already drive an electric car – why doesn’t Governor Baker?
ENSURE ECONOMIC SECURITY 10 Support the “transition dividend”
Establish a carbon price in which families receive cash benefits to switch to renewable energy after the installation of carbon pricing system
11 P rovide energy transition-related support Provide tax adjustments, job retraining and support for domestic solar projects for low- and middle-income families 12 M odify our Commonwealth’s electric car Modify the program so that is income-based, allowing lower-income households to acquire rebate program all-electric vehicles 13 W ork with other New England and Mid-Atlantic states
Implement a regional greenhouse gases cap (similar to RGGI) targeted at transportation
14 A lign gas tax revenues with actual infrastructure needs
Adopt gas tax credit for economic hardship to offset impact, with a planned transition to mileage and congestion pricing that supports full and responsible maintenance of our infrastructure
15 D rive renewables jobs into our gateway cities
Provide aggressive support of offshore wind that will help New Bedford and Fall River
DRIVE DOWN ENERGY CONSUMPTION 16 P ursue net-zero targets for new public buildings
Provide non- financial and/or financial incentives to drive all new state and municipal public buildings to a net-zero energy rating
17 Accelerate changes in the building code
estore stretch energy code applicability to renovation work and encourage broader adoption of R stretch energy codes, adding jobs, and further driving down utility bills; support further changes to “green” building codes
18 Create a tax rebate system
Foster energy efficiency conversions
19 Involve our students
Get students (and more families) involved in greening our building infrastructure, distributing infrared cameras through high school libraries so that they can be easily borrowed by students to explore energy loss in the built environment, including their own homes
MANAGE TRANSITION TO THE FUTURE 20 Create an Energy Innovation Roundtable D raw from industry, government, and universities to bring our best ideas quickly to the forefront and explore innovations to reduce peak power loads, integrate electric car battery storage capacity into grid, foster microgrid developments with a leaner network backbone, explore new technologies 21 Implement funding innovations
Introduce a Green Bank and forward-funding of renewables infrastructure to offset any short-term impacts on low and middle income families
22 Create a coordinated curriculum
Align vocational training and public college courses with need for training technicians in energy fields