“Credit Where Credit Is Due” in Massachusetts

Massachusetts Thermal Energy Coalition Attorney David L. O’Connor

Renewable fuels to heat and cool buildings have many virtues, but their use for this purpose is distressingly low. Fuels such as biomass, biogas, and liquid biofuels—as well as geothermal, solar heating, and ocean thermal systems—can reduce greenhouse gas emissions, stabilize volatile energy costs, increase local jobs, and keep consumer energy spending local. Despite these valuable benefits, high initial capital costs or differences in fuel costs often discourage energy consumers from committing to them. While a number of states have proposed to create incentive programs that would overcome these barriers, few have been able to enact the legislation needed to do so.

However, in the summer of 2014, the Commonwealth of Massachusetts enacted legislation that guarantees the award of tradable credits for the operation of systems that use renewable fuels to generate thermal energy. Beginning in January of 2015, the state’s retail electricity suppliers will purchase these credits to fulfill their obligations to obtain a minimum percentage of their annual electricity sales from alternative energy sources. Needless to say, the companies that deliver these fuels and install these technologies are elated.

An article by Massachusetts Thermal Energy Coalition lobbyist David L. O’Connor describes the process that led to enactment of this legislation. It may help renewable companies and advocates in other states identify and capitalize on similar opportunities to obtain their own legislation. Doing so is not easy because it requires solving a number of strategic and policy challenges. Yet the Massachusetts example demonstrates that renewable energy companies and advocates can join forces to secure state legislation that provides the financial incentives that these fuels deserve.

The Geothermal Exchange Organization (GEO) was a primary partner in the Massachusetts Thermal Energy Coalition that promoted the new law, which included GEO’s language on BTUs of thermal energy avoided. Read the entire article here.