Poison pill provision undermines Massachusetts climate legislation

Buried deep within a hallmark climate bill, “Creating a 2050 Roadmap to a Clean and Thriving Commonwealth” (H.4993), is an anticompetitive provision that would allow electric and gas utilities to construct, operate and own solar projects. On its face, it appears helpful but in reality, it’s a time machine back to the 1990s when utilities had a monopoly on energy services and left customers with inflated, artificially high energy bills.

The solar industry strongly supports establishing aggressive greenhouse gas reduction targets in this bill, but not at the expense of jobs, private sector investment and competition in electricity markets that will help to lower electricity bills.

Current law helped to build our robust, thriving solar industry over the last decade, enabling solar to go from .002% of the commonwealth’s in-state electricity generation in 2010 to over 17% today. Now there are more than 400 solar companies across the commonwealth that employ more than 10,000 Massachusetts residents. The law was specifically designed to separate the duties of electricity generation from power delivery. Utilities would focus on delivering power, while encouraging private companies to compete in electricity markets to supply power to residents, helping us incorporate clean energy sources while also building a local economy to support these businesses.

Section 15H of the climate bill would reverse decades of highly effective Massachusetts energy policy, allowing utilities to get back into the power plant business under the auspices of serving local governments.

The changes would remove market forces from the equation and allow profit-motivated utilities to resume their reign over both electricity delivery and production. Electric and gas companies would enjoy a ten-fold expansion of utility-owned solar in the Commonwealth and end the longstanding prohibition on utilities owning power plants. We’ve been down this road before and know that this will only lead to customers unnecessarily paying more for these projects at the benefit of one entity: the monopoly utility.

Electricity costs, jobs and the local economy aren’t the only things on the line.

If utilities start generating power again, this will create an unfair competitor when it comes to the process of connecting to the grid, known as interconnection. Utilities would have the power to stymie independent projects by throwing up roadblocks in the interconnection process, allowing their own projects to cut the line.

In addition, the provision attempts to encourage utilities to use solar assets to help underserved communities, but the proposed legislation does not provide any explanation, guidance or direction on how these customers should be served. The solar industry strongly supports helping low-income communities benefit from solar power, but they deserve much more than a few throwaway lines in a bill.

And finally, there is absolutely no evidence that the utilities can serve municipal customers better than the independent market. In fact, the utility industry’s record is the exact opposite and resulted in breaking up the utility industry in the first place. There is also a successful program in place that already encourages independent solar companies to serve local governments by offering them low-cost clean power to meet their energy goals.

While we understand the constraints imposed by the COVID-19 crisis, unlike nearly all of the bill’s major provisions, section 15H was never part of stand-alone legislation; nor was it subject to a hearing or testimony from stakeholders. Instead, it takes advantage of the pandemic to tacitly reintroduce vertically integrated monopolies at the expense of our local solar industry and Commonwealth residents.

This provision will only earn commonwealth residents a trip on a time machine back to the days of high costs and poor service.

Expanding utility ownership of solar projects should be dropped from any final legislation.