Constellation published a very informative blog showing us how the Clean Energy Standard will likely impact our supply price in Massachusetts.
Two regulations were passed in August 2017 that will affect your rates in Massachusetts:
- Regulation 310 CMR 7.74: Reducing CO2 Emissions from Electricity Generating Facilities
- Regulation 310 CMR 7.75: Clean Energy Standard (CES)
Reducing CO2 Emissions from Electricity Generating Facilities
The goal of the first regulation is to reduce emissions 80% by 2050, from 8.96 million metric tons to 1.8 million metric tons.
According to Constellation, the generators subject to these regulations may “feel additional financial burden when complying.” The additional burden can be passed into potentially higher energy supply offers which could “marginally push up wholesale power prices.” Which, in other words, means slightly higher electric prices in the Northeast.
Clean Energy Standard (CES)
The primary focus of the blog is the Clean Energy Standard, passed alongside the above regulation.
CES “sets a minimum percentage of electricity load served in Massachusetts that utilities and competitive suppliers must procure from non-CO2 emitting generating resources.”
What does that mean? Well, it means suppliers and utilities must use clean energy for some percentage of their electricity load. The regulation does allow them to use Clean Energy Credits, alternative compliance payments or Class I Renewable Energy Certificates to fulfill the regulation.
This regulation will likely result in additional cost burdens for electric generating facilities and utilities. These costs will again make their way to the end-users.
Constellation is already addressing these additional costs as part of its forward supply price: “This provides customers the option to fix (restrictions apply) or pass-through CES costs on their monthly bill”.
The cost could range anywhere from $0.50 to $2.00/Mwh depending on the contract and “account load shape.”
Check out the blog for more details on Constellation’s CES cost solutions.