Renewable Portfolio Standard

The Massachusetts Renewable Portfolio Standard (RPS) is designed to diversify the state's electricity supply portfolio, stabilize rates, increase energy security, improve environmental quality, and invigorate the clean energy industry.

Established as part of the 1997 utility restructuring act, the RPS (225 CMR 14.00) was issued by the state's Division of Energy Resources (DOER). It promotes the deployment of clean energy technologies in a couple of ways.

First, it requires all retail suppliers licensed in Massachusetts to buy renewable energy certificates (RECs) produced by generating facilities that meet certain criteria. For each megawatt-hour of green electricity produced by these facilities, a REC is generated. Licensed suppliers must hold RPS-eligible RECs equivalent to a fixed percentage of the electricity that they sell to consumers each year, in megawatt-hours.

Second, it creates a new revenue stream for facilities meeting RPS criteria. Facility owners can sell both electricity and RECs, either directly to consumers or to other suppliers.

The state's RPS rises annually, as shown in the table below. Accordingly, it mandates a steady increase in both renewables capacity and in demand for RECs generated by wind, solar, hydro, bioenergy, and other qualified facilities.

Compliance Year	Minimum Percentage of Renewable Generation
2003	1.0
2004	1.5
2005	2.0
2006	2.5
2007	3.0
2008	3.5
2009	4.0
2010-2014	+1% annually

Qualifying Forms of "Renewable" Generation

The DOER determines whether renewable energy facilities qualify for RPS eligibility. A qualified generating unit must meet the following criteria:

•  It must produce electricity from one of the following sources, fuels, or technologies:

• Solar photovoltaic or solar thermal electric energy
• Wind energy
• Ocean thermal, wave, or tidal energy
• Landfill methane gas and anaerobic digester gas, provided that the fuel is directly supplied to the generating unit rather than conveyed through conventional delivery networks for natural gas
• Low-emissions, advanced biomass power conversion technologies using an "eligible biomass fuel"
• Fuel cells using an "eligible biomass fuel," landfill or anaerobic digester methane gas, hydrogen derived from such fuels, or hydrogen derived using the electrical output of a qualified renewable generation unit. (Fuel cells using hydrogen derived from other fuels or from electricity produced by non-renewable units are ineligible).

Eligible biomass fuels are defined as follows: "Fuel sources including brush, stumps, lumber ends and trimmings, wood pallets, bark, wood chips, shavings, slash and other clean wood that are not mixed with other solid wastes; agricultural waste, food material and vegetative material as those terms are defined, or may subsequently be defined, by the state's Department of Environmental Protection through 310 CMR 6.00; energy crops; biogas; organic refuse-derived fuel that is collected and managed separately from municipal solid waste, or neat biodiesel and other neat liquid fuels that are derived from such fuel sources."

Cofiring generating units-units that use multiple types of fuels, either for startup or as a means of keeping output consistent-may also qualify, even if they use both eligible and ineligible fuels. If the ineligible fuel is used only to cold-start a unit that otherwise solely runs on a renewable fuel, then it is acceptable. If the total electrical energy output of the eligible fuel in a given time period is equal to the ratio of the net heat content of all other fuels consumed, then it is acceptable. Finally, if the generator is using an eligible biomass fuel, then the unit must meet the same air emissions requirements as advanced biomass power conversion technologies.

•  The commercial operation date of the generating unit must be after December 31, 1997 , unless the unit receives a "vintage waiver." Such a waiver may be obtained if the unit produces power only from renewable means and its electrical output is greater than it was before 1998.

•  Generating units connected directly to the grid may be located anywhere within the control region of ISO- New England (ISO-NE) , the independent system operator for the New England electricity marketplace. Grid-tied units outside of the ISO-NE control area may qualify, but their output must be verifiable by ISO-NE. Off-grid and behind-the-meter (customer-owned) units may qualify, but only if they are located in Massachusetts.

•  The electrical output of the generating unit must be verifiable by ISO-NE unless it qualifies as a small generating unit. A small unit must be able to verify its output in a manner satisfactory to the DOER , and it also must verify that its RECs are not being sold or used to satisfy RPS requirements outside of Massachusetts.