On August 3, 2012, Massachusetts enacted SB 2395, “An Act Relative to Competitively Priced Electricity in the Commonwealth,” which changes Massachusetts’ net metering and interconnection rules.

SB 2395 doubled the Commonwealth’s existing net metering capacity limit from three percent of the utility’s peak load to six percent, with half allocated to private projects and the other half allocated to municipalities or other government entities. This provision is important because Massachusetts was already approaching the existing net metering cap.

Additionally, SB 2395 exempts certain small Class I facilities from the net metering cap altogether. Class I facilities are those producing renewable energy credits (RECs) from most renewable energy technologies (including solar, wind, tidal, and biomass) that became operational after December 31, 1997. Carving out small Class I facilities allows these small developments to continue to occur without regard to the overall net metering cap.

SB 2395 directs the Massachusetts Department of Public Utilities (DPU) to develop and implement an enforceable standard interconnection timeline for distributed generation facilities by November 1, 2013.

Finally, SB 2395 extended the mandate for state utilities to procure long-term renewable generation contracts. SB 2395 requires each utility to competitively procure an additional four percent of its historic peak-power load needs from renewable sources through long-term contracts with terms of 10 to 20 years. Of the additional four percent of load, 10 percent must be reserved for “newly developed, small, emerging, or diverse renewable energy distributed generation facilities.” Finally, renewables procured pursuant to the program must be “low-cost,” instead of “cost-effective,” taking into consideration a number of factors. These changes are likely to make it easier for developers of renewable generation to enter into such long-term contracts.

Taken together, these provisions demonstrate Massachusetts’ continued support for the development of renewable generation — and particularly distributed generation — within the Commonwealth.