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RMLD Board of Commissioners
Date: 2021-01-20 Time: 7:30 PM
Building: Location:
Address: Session:
Purpose: Version:
Attendees: Members - Present:
Mr. John Stempeck, Chair; Mr. David Hennessy, Vice Chair; Mr. Robert
Coulter, Mr. Philip Pacino, Mr. David Talbot
Members - Not Present:
Others Present:
Staff: Ms. Coleen O'Brien, Mr. Hamid Jaffari, Ms. Wendy Mariewicz, Mr. John
McDonagh, Mr. Greg Phipps, Ms. Kathleen Rybak, Mr. Charles Underhill
CAB Members: Mr. Jason Small, Chair (North Reading); Mr. Vivek Soni
(Reading)
Invited Presenters: Commissioner Patrick Woodcock, Massachusetts
Department of Energy; Mr. Robert Grace, President& Managing Director of
Sustainabilty Advantage
Others: Ms. Vanessa Alvarado, Reading Select Board; Ms. Marlena Bits,
Reading; Ms. Johannnes Buchanan, DOER; Mr. David Camardese, NextEra;
Mr. Michael Carpenter, Reading; Mr. Robert Connor, Reading; Ms. Melva
Deshmukh, NextEra; Mr. Omay Elphick, Gravity Renewables (Greenfield
Center, NY); Ms. Laura Haight, Partnerhip for Policy Integrity; Ms. Karen
Herrick, Reading Select Board; Ms. Gail Page, Green Sanctuary; Attorney
Christopher Pollart, KP Law; Mr. Eric Noreen, Massachusetts Department of
Energy; Mr. Vincent Ragucci, Energy New England; Mr. John Rogers,
Reading; Mr. Jim Satterthwaite, Reading; Ms. Mariam Wasser, WBUR; Mr.
Mark Zarrow, Reading; Mr. David Zeek, Reading
Minutes Respectfully Submitted By: Philip B. Pacino, Secretary Pro Tem
Topics of Discussion:
PER GOVERNOR BAKER'S MARCH 10,2020,ORDER SUSPENDING CERTAIN PROVISIONS OF THE
OPEN MEETING LAW,G.L.c. 30A,§20 THIS MEETING WAS HELD REMOTELY VIA ZOOM.
1. Call Meeting to Order
Chair Stempeck called the Board of Commissioners meeting to order at 7:30 PM.
Chair Small called the Citizens'Advisory Board meeting to order at 7:30 PM.
2. Ooenina Remarks
Chair Stempeck read RMLD's Code of Conduct. Chair Stempeck announced that the meeting is
being recorded via Zoom for distribution to the community television stations in North Reading,
Lynnfield, and Wilmington.
Chair Stempeck asked Mr. Pacino to serve as Board Secretary.
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3. Introductions
Chair Stempeck welcomed everyone to the joint meeting of the RMLD Board Commissioners and
the RMLD Citizens' Advisory Board. The Chair extended a special welcome and thank you to
Commissioner Patrick Woodcock from the Massachusetts Department of Energy Resources, and to
Mr. Robert Grace, President of Sustainable Energy Advantage; both of whom will be speaking later
in the presentation.
4. Public Comment
Mr. Hennessy stated that as a Commissioner, he has been encouraging RMLD to expand its
renewable energy portfolio. A year ago, when RMLD started to pursue the biomass facility and
Palmer, I was still, you know, under the impression that biomass was similar to wind, solar, hydro,
things like that, until I read an MIT study over the summer that says that most biomass is wood
burning and it could take a generation for the forest to renew as well as there might be some air
quality environmental concerns. So, I know there's a lot of people here tonight that know much more
of the science than me, so I really want to learn tonight. And lastly, I just wanted to say it somebody
who's building a similar facility or rf planning to build one in Reading, I would want those regulators to
ask the lough questions to make sure it was good for Reading and I think we should do the same for
the people in Palmer.
Laura Haight from Partnership for Policy Integrity spoke about the air quality in Springfield, the new
Climate Bill and how her organization is concerned about DOER's calculations and scientific studies.
Further, Ms. Haight discussed a variety of legislative letters and the new TUE committee.
5. Approval of Board Minutes (Attachment 1)
Mr. Pacino made a motion that the Board approve the meeting minutes of June 18, 2020, July 16,
2020, July 23, 2020, August 20, 2020, September 16, 2020, and October 22, 2020, on the
recommendation of the General Manager, seconded by Mr. Hennessy. Roll Call Vote: Mr. Coulter:
aye; Chair Stempeck: aye; Mr. Hennessy: aye; Mr. Talbot: aye; Mr. Pacino, aye.
Motion carried: 5:0:0.
6. General Manager's Report
Ms.O'Brien provided a community update:
• Customer Satisfaction Survey conducted by Great Blue; presentation scheduled for the February
meeting.
• Heal Pump 101 Customer Webinar. Tentatively scheduled for last week in February.
• The High School Art Contest will launch in the next two weeks;winning art will be used for the
cover of the RMLD Annual Report.
• EV Workshop will need to be scheduled after February to continue the importance and
complexities of the discussion on power supply.
• Extension of the DOER, MLP Solar rebate; initial funding was$500,000. An additional$250,000
match in funding has been made available with an extension to June 30,2021.
7. Sustainability Enemy Policy Reformation Third Training Session: Mr. Phipps(Attachment 21
Guests: Commissioner Patrick Woodcock, Massachusetts Department of Energy Resources. Mr.
Robert Grace, President&Managing Director of Sustainable Energy Advantage
Mr. Phipps—RMLD IRD
This is training session number three with the intention is to focus primarily on context and
background for the Commissioners and the CAB members as they consider what we might do
relative to any Policy 30. He then started with a quick highlight updates from the previous two
training sessions.
So, SB 2029,the Bill that was mentioned,was actually vetoed by the Governor on January 14a and
was then resubmitted as Bill S9. For consistency with prior discussions we will refer to it as
Roadmap 2050. There are a lot of moving parts here. We are going to talk mainly about external
context. Buildings, transportation and energy and MLPs, which historically have not had formal
compliance requirements, will be include in Roadmap 2050. The common goal is to get everybody
to net zero, net carbon. Realistically, along different paths. We will rely on Commissioner
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Woodcock and Mr. Grace to help us understand some of these contexts and some of the
background.
Regulations can be tailored to accommodate the IOUs,the L-Cs and the MLPs with the recognition
that those different energy primary energy players run different business models. They are of
different sizes, different scopes and have different missions. Mr. Grace is going to provide some
history on RPS/CES. But more importantly, what it was intended for, what's it trying to do and how
the IOUs and the LI-Cs buy energy and certificates to comply with those regulations for RPS/CES.
Commissioner Woodcock will help us understand how Roadmap 2050, or now SB 2995 or S9, is
intended to drive both the MLPs and the IOUs and L-Cs and why there are different paths to a non-
carbon compliance by 2050. So,that's the objective of this session.
I'll take just a couple of minutes to highlight items from our previous 2 sessions and then we're
going to try and do a moderated question-answer with our two guest speakers. We greatly
appreciate that they are here to share some of their knowledge and understanding.
RMLD is an MLP. It serves four towns in Massachusetts: Reading, Lynnfield (Center), North
Reading and Wilmington. We have a very broad base of customers. The mission that's on our
website is just to keep in the context-reliable, competitively priced clean energy.
The current authorized version of Policy 30 (2012) was Sustainable Energy. The focus was on
renewable as we talked previously. Renewable energy goals and included some discussion about
RECs. As a result, over the past seven years, with the guidance and guardrails, the RMLD team
has built and continues to build our power portfolio under this Policy.
As we talked about at the very end of the last session,the RMLD is actually ahead of our Policy 30
goals that were set back in 2012. The goals that we set to achieve by 2025, we've already
achieved. We talked a little bit about the facilities that we are buying from and that our contracts
were buying the REC certificates along with the power.
The other thing that we finished off in our last session was a comparison of the cost impact. If we
took the current portfolio and adapted it to be compliant with the Roadmap 2050 ballpark figures in
terms of being compliant with the RPS/CES. That's a quick summary of where we were.
I'm going to drive the questions for the next roughly 35 minutes to kind of keep things guided on
Policy 30. And then at the very end -the last 10 minutes or so-I will recommended to the Chair to
allow questions from each of the Commissioners, CAB, and our guest speakers. And again,we are
very thankful that our guest speakers can join us.
So we am going to start with Commissioner Woodcock. I'm going to kind of guide you along the
thought process on the three main topics. Commissioner Woodcock is in the executive branch and
will be talking about regulation which is his area. But he will also talk some on the legislation.
You had a chance over the past several years and then most recently the past year to get a sense
of the MLPs and their sustainable energy policies that are in place, not mandated or legislated, but
are in place. There are 41 MLPs in the state of various sizes, RMLD happens to be one of the
largest. Any observations in terms of how you've seen the MLPs looking at renewable and how
they've set some policies in one of the past couple of years in the context of renewable energy
resources.
Commissioner Woodcock—Massachusetts Department of Energy Resources
Sure. Well, thank you, I appreciate the opportunity to have this dialogue. Specifically, you know,
what has been really transformed in this discussion is what technological change has done for
pricing of renewables and other initiatives to lower emissions. And R's a conversation that I think
has really altered how MLPs think about obligations and also thinking about a commitment to a net
zero commonwealth goal in 2050.
It was alluded to at the beginning but there's been a great partnership between the Department of
Energy Resources and the MLPs that was reflected in our partnership on the solar MLP program.
Really, you know, R's attracting. I think participants that are doing it, you know, to contribute to our
overall objective to lower their energy bills and collectively to create a more diverse energy supply.
Pricing that we're seeing is much more competitive. We just saw Congress passed an increase in
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the tax incentive. So, I've never been more encouraged to kind of wear technological changes to
try to advance some of these goals.
I have noticed that there's more uniformity with the MLPs. I think on the overarching goal to kind of
get to 2050. 1 think the details and how MLPs will arrive at it is going to be unique to each
community. And, you know, I think the area that I see MLPs and this gets into a little bit of how
there's some distinction with the IOUs, you know, you have guys have an incredible amount of
flexibility and implementation now being able to pivot quickly where IOUs are governed effectively
by the Department of Public Utilities and the Legislature for procuring electricity.
I know there's a lot of discussions on looking at offshore winds and looking at a scale that and in a
flexible way that a lot of customers are unable to do. So, there're really has been a significant
change just since I've been working with the Baker-Polito Administration since 2017. And I really
look forward to partnering on some of the other areas beyond the electricity portfolio but realty
electrification. You said the heat pump 101; tremendous opportunity for the Commonwealth. And
furthermore, looking at the electrification of transportation in this next decade, so I'll pause there
and...
Mr. Phipps—RMLD IRD
That kind of sets up the second related question which is just -- as you think about both the
regulatory and the legislative processes, and I think I'm kind of bringing it back for the Commission
and for the CAB,which we called Roadmap 2050. Our understanding as we mentioned earlier that
the intention was to bring the, as you said, the Commonwealth, so buildings, transportation and
energy to a common goal by 2050.
Is it reasonable to say that legislation and the regulations are putting in place to bring all these
sectors to the same net zero noncarbon goal in 2050? And then a secondary question was,talk a
little bit about as you started to the fact that the past might be different. But the first question is, is
there a common goal that you guys are trying to instill all of the sectors? And in the case of energy
for us, MLPs, IOUs, L-Cs to a common non-carbon goals,what the intention of the legislation is.
Commissioner Woodcock—Massachusetts Department of Energy Resources
Sure. So, for baseline context under the Global Warming Solutions Act the Legislature established
a goal of 80% reduction of Greenhouse Gas Emissions under 1990 baseline by 2050. Last year,
during the Commonwealth, State of the Commonwealth, the Governor established that we would
increase that ambition to a net zero standard by 2050 and is articulated by the Secretary of Energy
and Environmental Affairs that requires at least 85% reduction economy wide by 2050. And
additional land use sequestration, soil based mechanisms can be used to also meet that net zero
as requirement.
That is in the legislation you reference, does include a net zero that would be codified in statute.
Going to what was issued on December 30" and what's going on, so I appreciate you guys bearing
with both on the legislative side and the regulatory side. But energy and environmental affairs
issued a clean energy and climate plan that is currently in draft form and accepting public comment
that was also along with that was issued a Roadmap 2050 that informs our climate, energy and
climate plan. So the 2050 Roadmap was an effort to see if you used all of the technology that exists
today in the forecast from the Energy Information Administration, how would you arrive at net zero
in 2050 at the lowest cost? And I would encourage all of you, it's not that difficult to get the breath
of what the scenarios really looked at. But a few themes really came across from that analysis.
One is that electrification will likely be a significant, play a significant role in 2050 plan.
Furthermore, with the increased electricity demand, we'll need additional clean energy, a lot of it.
And if you look to what resources can contribute to that offshore wind is a very compelling resource
for our region. But h informed what I referred to as the Clean Energy and Climate plan. And that
plan again in draft form really targets of what are the policies that we should put in place today to
start achieving our 2030 goals and put us in position to achieve our 2050 goals.
So, I would say the most prominent features of our Clean Energy and Climate Plan, and I'll refer to
h as CECP just for brevity is really to focus on our building sector in the next ten years. That's
where we would see most of our emission reductions with the installation of air source heat pumps
and maintaining our ambitious energy efficiency goals. I'll note one area that has a specific
implication for MLPs is that it does raise the prospect of the Department of Environmental
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Protection under existing authority, assessing a review of what is called the Clean Energy
Standard.
And the Clean Energy Standard for existing resources in the next year and assessing ambition for
currently that covers investor-owned utilities. But it also references that it would assess whether
MLPs should be subject to that regulation. So that is the current status and that is under current
law as you noted the bill that has arrived at the Governor's desk and has been refiled also has
provisions relating to how MLPs should account. And that's the key component that I'd say for
MLPs as you think of your electricity supply.
Mr.Phipps—RMLD IRD
That's great. Thank you. What I'm going to probably come back to do a little bit of contrast
compare with ML in tens of how the regulations and legislation accommodates, more specifically
in the energy sector, the different scale of providers MLPs of various guises and then the IOUs,
LSEs to get to that goal. But this is probably a good transition to Mr. Grace - get a little bit of
background and context because he's going to talk a little bit about the RPS and CES, the existing
legislation that currently does not apply to MLPs but does apply to the IOUs and the LI-Cs.
Mr.Grace—Sustainable Energy Advantage
Thank you. So,just to give a little bit of history of, you know, we talk a lot about the RPS and CES
and it's perhaps helpful to understand the context for where MLPs like wedding and should go to
understand how the investor-owned utility realm works, and how we got there. So,this first slide is
just a quick summary of brief history on how this evolved and why. It all started in 1998 with the
Electric Restructuring Act which introduced retail choice on supply.
So, the investor-owned utilities world that vertically integrated world evolved into load serving
entities, the entities that actually provide supply to customers and the electric distribution
companies. A big part of that was mandating the adoption of the renewable portfolio standard and
RPS. It was one of the first in the nation and the key feature was that it required all retail sellers of
electricity who are often referred to as load serving entities to provide an annually increasing
minimum percentage of their retail load with new renewable generation assets that came online,
were expanded their production after restructuring.
Those were put into regulation in 2002 and after establishment of a certificate tracking system of
the generation information system as a means of tracking certificates for all generation but
specifically for compliance with the RPS. That started in 2003. Initially it was basically DRPS, now
we reverted that as class one, because over time a number of other things were added to it. Over
the years there were additional layers, new classes, eligibility tweaks and increases to targets.
And in 2008, the Green Communities Act started layering in, support for pre-restructuring
renewables,what now is referred to as class two in two different categories,waste energy and non-
waste energy, support for targeted renewable generation types to jumpstart specific markets.
Creating means for funding additional types of resources to meet a variety of related policy goals.
The primary one there, of interest is the akemative energy portfolio standard.
Along the lines, there have been changes to eligibility and rules to try to align the details with
evolving objectives and changes to RPS class targets, mostly acceleration, extension time and
acceleration of the rate of increase for the new renewables of class one. And some potential
changes to price caps of some of the various tiers, something perhaps Commissioner Woodcock
might look back and speak to at some point if it becomes relevant. His agency has recently
proposed to reduce some of the class one alternative compliance payments of price caps.
That's brought us to today where we basically have a complex suite of nine different classes or sub
classes of requirements that apply to the low serving entities within investor owned utilities territory
and complementing those, meaning RPS mandates are a series of procurement policies as
Commissioner Woodcock had referenced, the offshore wind as an example, also without what's
referred to as section 83D that was used for procuring large hydro and the tariffs that are used for
procuring solo under the smart policies.
So, what do those nine standards look like? What are they and what do they mean? So, I'm not
going to read through everything here and talking details. But the blue rose, basically the two tiers
of RPS class two, waste energy and non-waste energy, as well as the CESE which is run by the
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Department of Environmental Protection, they're all basically focused on maintaining the existing
renewables and other non-carbon resources. So, they generally have gat targets over time,
because they're looking to lock in and protect discreet existing portfolio.
Alternative energy portfolio standards, that's really focused on supporting other technology goals.
So, that is creating a funding source for combining power, flywheel storage, fuel cells and
renewable thermal. The green rows are focused on increasing renewable. So, we have the class
one RPS, probably what you hear about the most and what we started with. We have the solar car
balance or rest rack which were interim policies in effect to really stimulate distributed solar
generation.
We've got into that to the point of being a relatively mature industry and over the next several years,
the S-REC balance will be phasing out and that supply will become class one, so. And then, you
have the clean energy standard which is complex in many ways and that it wraps around the class
one. In a fact class one is a carve out from energy standards, so it incorporates if it goes beyond
and ft creates demand for either more class one supply or some other alternatives like the large
hydro under the section 83D contract and some other low carbon supply.
And lastly, you have what's highlighted in purple, the clean peak standard which is a little bit
different from all the others. It doesn't apply to energy per se, but it still has a demand that's
defined as a percentage of a low serving entities load. And the purpose of that is to stimulate
resources and technologies that can supply electricity were reduced demand at times of peak. So,
that's really driven to create the means to integrate a large volume of intermittent renewables and
replace the fossil Beet and be able to keep the lights on.
So, you can see here that the targets increase dramatically over time for some of these and for
others that they are fairly constant. If you look at the sum of targets,the first of the grid,the two red
rows, red rows near the bottom. You can see a little bit more than 30% of load now when you had
everything other than the clean peak standard up. And eventually based on what's currently on the
books that would get to be 120%of load by 2050. Some of those may be adjusted because at the
end of the day, I'm not sure that requiring more certificates than the amount of load is where the
rules will ultimately settle.
I've also highlighted here with a number of asterisks that there are a number of these tiers that are
being considered or proposed for changes. The CES and CESE as Commissioner Woodcock just
mentioned,the CPN has suggested potential changes to those.
And so, in red text, I've identified some of the estimates of the impacts of some of those changes.
And you can see that those potentially could increase the targets even further, not entirely clear that
they're all going to happen at the same time. The administration's CPN and the legislation that just
passed generally gave the same goals but in some different ways. So, unclear whether you have
those, the additive or one of the other substitutes. I think there's more activity you have to happen
to figure out how that's all going to shake out.
But I've added the clean peak energy standard below it. And, again, these are not the same
certificates, so it may not be an appropriate or realistic to add them to the totals, but you can see if
you add those, that the targets add up to quite a bit more than 100% of load by the time you hit
2040 or 2050. This gives you a picture of what the current regulations and laws would imply for
each of these. So, you can see at the bottom, the blue and green and brown which represent the
class two RPSs, and clean energy standard and the APS stay relatively constant. The growth
generally comes from the class one which is yellow and the CES which encompasses the class one
and goes beyond it. That's the gray on top of ft. And then the empty boxes on the very lop
represent the clean peak standard. And you can see here by roughly 2040, the totals of portfolio
standards other than the clean peak would be expected to reach roughly 100%of load.
So, I think of all of these as portfolio obligations, whatever they are and with respect to how they
apply in the load serving entity — to load serving entities in the electricity distribution company
territories. There are a few different aspects here, so the obligations apply to suppliers. They
started in 2003 and these apply to most our entities that are the competitive suppliers as well as the
EDCs in their role as providers of last resort. So, that's basically -basic service. Those customers
that haven't chosen a competitive supply source are still sewed by the EDCs effectively as pass
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through. They don't have a commercial interest as much as an obligation and they don't maintain
portfolios to do so.
Most of the commerciallindustrial load today has already left the utilities and use competitive supply
from observing entities. Historically, most of the residential and small commercial industrial
customers have not, competitive supply they have been on basic service until recently. There's
been a big boom in community choice aggregation started throughout — it was something like 140
of the different municipalities in the region and very recently, Western Boston, the biggest of them
have launched community choice aggregation, many of which incorporate a standard offering that
includes renewables in excess of the minimum standard. In any event this is an opt-out
aggregation which is going to lead to the majority of supply being the competitive supply and
utilities ultimately having a very,very small role in terms of meeting the obligations.
So, the implications or the load serving entities generally have no long-term customers. Retail
supply tends to be one-to-three-year contracts and get turned and get swapped back and forth
between other competing suppliers. So, generally load serving entries don't maintain portfolios in
the same way MLPs do. There's no legacy supply and they're limited long term portfolios.
Compliance is generally met through purchases of renewable energy credits or certificates from
eligible renewables.
New supply still needs to be stimulated. RPS alone has generally proven to be inadequate by rseff
to stimulate that type of investment in capital-intensive long-term resources. And so, over time
Massachusetts has implemented a range of long-term procurement policies that have helped get
projects financed that effectively fed supply into the RPS markets. This is basically leverage.
The utility balance sheets to help enable financing and the utilities by long term contracts for large
scale renewables, wind, offshore wind and large hydro through 830 as well as in the new solar
Massachusetts tariff program, distributed solar projects and they commit contractually to these
resources for 20 years or so. And they resell the energy in Rex into the market to make them
available to the competitive suppliers.
The alternative compliance payment or ACP is a terminal here and I've talked about it in this
context a lot. It's basically an alternative means for load serving entities to comply. They can either
submit a certificate or retire certificate at the end of every year or make a payment at an ACP rate.
It basically acts as an incentive to comply. Historically, is been set at above what the cost of
acquiring renewable certificates should cost and it serves as a price cap. And then perhaps
Commissioner Woodcock will talk about later the DOERS recently proposed to reduce that level,
has been roughly$70 in net one hour has been proposed to reduce that in class one to$40. It's at
different levels for different tiers as well.
Contrast that with the municipal light plants which as you are well aware, are integrated utilities. I
don't have competitive supply. Generally started focusing on transition of portfolios later then in the
investor-owned utilities territory because you are—integrated utilities, you have a long-term legacy
portfolios. You have resources that are owned, you have resources that our commitment —
committed under long term contracts. Because of the stability of your customer base and the
finance ability of your commitments being backed by the assets of the wires and the credit and faith
of the towns, you have the ability to commit to long term supply that can enable financing and that's
really important in the clean energy space. So, to conform to portfolio obligations with different
eligibilries than what you have as resources already in your portfolios, you would need to shuffle
certificates, you would need to potentially sell some that aren't applicable to the obligation or the
policy that applies to you and buy some others. An important last point here is that MLPs are
ultimately accountable to the folks here, the Board, the ratepayers in the town boards which
suggests a few things that there isn't necessarily a need for a punitive level of penalty for a shortfall
in meeting the laws and adopted policies. Having an ACP at a higher level is more meaningful in
the competitive realm than a realm where there's more self-policing and full responsibility where the
governance is potentially sufficient incentive to stimulate best efforts for compliance. ].
Mr.Phipps—RMLD IRD
You did a good job in terms of providing some background of RPS and CES, the complicated
nature of it. These slides set the stage in terms of the inherent business differences between IOUs
and L-Cs and MLPs. And so, I want to just transition back over to Commissioner Woodcock and
just have him talk a little bit about some of the key structural pieces that you mentioned earlier that
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both groups, the IOU, LI-Cs as well as the MLPs are all going to be held to a common standard by
2050. S9 or what we were calling earlier, Roadmap 2050 and 52995, how the combination of
regulation and legislation works bringing the MLPs into a level of compliance and B, accommodate
the fact that there are different businesses.
Commissioner Woodcock—Massachusetts Department of Energy Resources
Maybe I'll give an example right now of how the regulatory context works for the investor on utilities.
So, to give you an example. When we DOER along with the utilities, conduct a competitive request
for proposals for offshore wind. And in that review, we received competitive bids back and we
assess as a bundle product, the attributes, so the environmental attributes associated with the
generation so that is all of the nine different attributes that Bob mentioned,and also the energy.
And if you could assess the same way that you would look at potential long-term contract, we are
looking at what is the forecast of energy, what is the price of this contract but we're also looking at
what is the value of these contracts and what is the forward costs of meeting this obligation. As you
can see,the obligation increases for our investor-owned utilities. So,we will—these ratepayers will
have to obtain them. So,we and as a result, unlike the investor-owned utilities, right now the MLPs
will be looking forward under existing law really just kind of the energy and your own commitments,
right? So, you mentioned that you have a policy that's been guiding you but that has been
individual to MLPs thus far. It really is an accounting basis that our Department of Environmental
Protection establishes for accounting for greenhouse gas emissions. And I'll pause there because
I'm about to go into some detail of how we account for things but really the current methodology is
looking at the environmental attributes that we have as a total commonwealth that we retire in the
state. We count that as zero emission bid even if those generating facilities are outside the stale.
So, if we have a contract with a solar fan in New Hampshire or a wind fans in Maine and those
attributes are coming back to Massachusetts, we can account that for that within our portfolio. So,
the real central issue is that we dont want to allow double counting and that's embedded in our
entire GIS system. So, you know, the idea long ten that like, that I think MLPs and the
commonwealth are going to have to work on is how do you align our current DP inventory with what
the MLPs are doing. Ultimately, in 2050 that we can establish that the MLPs have contributed
proportionately to meeting the net zero targets.
Mr.Phipps—RMLD IRD
Good, good. Thank you, Commissioner. There's a lot more detail that we can go into. We just
want to make sure we can take just a couple minutes at the end to talk a little bit about the biomass.
But before we do that, Mr. Chairman, do you want to just take a moment right now to allow the
Commission and the CAB to ask one question to our guests due to time constraints?
Chair Stempeck—Chair Board of Commissioners
Yes, and then maybe we could deal with the biomass issue although it may be intertwined as well.
If you wouldn't mind, Commissioner Woodcock, we've got members from the Citizens Advisory
Board as well as five members from the Board of Commissioners. They may have questions and if
you would be open to accepting them.
Mr. Phipps—RMLD IRD
And, Chairman, just as we get started. There's a large group, so short answers and basic
questions if we could to the extent possible.
Mr.Talbot—Board of Commissioners
I do appreciate the need for brevity. So, these are complicated matters and so, you know, we've
had a good hour-long presentation so maybe it'll take just a little bit longer than a minute or two. I'm
very appreciative of the efforts that have been made on both the business side and the regulatory
side to try to help the MLPs, you know, have some good standards. The concern arises when rules
and regulations, and I have a question coming after this, are relaxed in order to do that. It's going
to come up with the biomass. But the biomass regulations in the RPS have been significantly
weakened. And I'm just going to quote from the Attorney General who says that those regulations
contain numerous provisions that may increase, not decrease greenhouse gas and other harmful
pollutant emissions. That the analyses purporting to support those regulations appear to overlook
important considerations, make unsupported assumptions, reach dubious conclusions and show
that the regulations may indeed have troubling emissions impacts.
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And its the relaxing of those rules that enables a facility like Palmer to develop a business case
because they can sell the power to us and then we get credlt for noncarbon emitting under this
climate bill and somebody else can buy the REC, and so this cash involved too. So,that is sort of a
follow up double counting. My question is, how did it gel to the point where anybody on Beacon Hill
thought that MLPs actually wanted these things to happen with respect to biomass. I've heard that
said quite a bit by a lot of people who are knowing what's going on up there.
The last sentence I would just say before you answer that is the MLP boards in Massachusetts do
not want inefficient woody biomass plants that are enabled by gutting the rules any more than do
the people of East Springfield. And I think the proof of that is that only a handful signed contracts of
this— or in our case, we're taking a second look at it. I think we need to take biomass out of the
Refiled Climate Bill so that we're not kidding ourselves or our kids that this is non-carbon emitting
and Governor Baker has said he wants data driven policy. The existing rules on renewable energy
with respect to biomass are based on facts and science.
So, my question is —that's the preamble, and I'm sorry but we've had an hour and this is a two-
minute question. The question is, how did it get to be that Commissioners and lawmakers on
Beacon Hill thought that MLPs wanted this to happen.
Commissioner Woodcock—Massachusetts Department of Energy Resources
I'll try to respond. Thanks for the question. So, in current law, biomass is an eligible class one
resource. And what is difficult when you're developing regulations to govern, how to meet eligibility,
It's what the Massachusetts DOER conducted in 2012 was an assessment of how to manage
lifecycle emissions. And ultimately, what they concluded is that biomass has life cycle emissions
from the stack but it can be reduced with sustainable forestry. And as a result, what is very
important is that you promote sustainable forestry when you are having any biomass policies.
And that's pretty logical that the emissions would go up if you clear cut a forest and do not have the
photosynthesis process for the regrowth of that forest. So, as a result the management study
suggested that we really promote the type of biomass that, one, the entire forest has to be
independently verified, that it is being sustainably managed and, two, that we promote the type of
biomass that is a waste stream, right? This is promoting the use of sawdust,wood chips that would
otherwise go to landfill.
So, I understand there's, you know, we've received a lot of comments on the regulations. We
certainly tried to do our best to manage promotion of biomass that is not promoting unsustainable,
that cannot be done but we did our best,we did put out a response to the comments, we got to get
a lot of thoughtful comments. And ultimately, we put forward the regulations and we have filed
them at the Telecommunications and Utilities Committee and are awaiting the feedback from that
committee.
Mr.Coulter—Board of Commissioners
I thank you gentlemen for speaking tonight. My question is, you spoke about the EDCs and MLPs.
How do you see MLPs surviving in the future in this environment? Right now you talked about
accounting. How are you going to be able to make a profit? I could just see an MLP being pushed
into nothing more than a smaller EDC. The way that the structure is set up right now. So, I don't
know if that's part of the thought process, is pulling in the MLPs into this world because I think a
convergence is happening in overtime of an MLP becoming nothing more than a distribution
company with this setup and I don't see how you're going to be able to sustain yourself
independently.
Commissioner Woodcock—Massachusetts Department of Energy Resources
Well, I do think that there is a recognition that MLPs representing 14% of the load with, you know,
going to 100% that we do need to increase our ambition whether you're an IOU or an MLP over
time. I think what we're trying to do as an administration is recognize that, one, you are continued
to have basically a vertically integrated utility that it really wouldn't make sense to require you to
enter into long tens contracts in the same manner that we require the investor-owned utilities.
What we're attempting to do with the discussion about the CES and CESE is, could there be at
least consistency for retirement of attribute markets that allows more flexibility? You know, CES
includes and CESE includes nuclear, hydro, a breath of different resources. And ultimately, I mean
I think the costs are coming down for these resources. So, I do hope that this is not something that
is punitive over time but, you know, meets the ambition that we require but allows the flexibility for
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the MLPs to meet ft. So, but to answer your question, all of these are, you know, we have a draft
CECP, we have legislation that's pending. So, these are discussions that are occurring really right
now about how MLP should ft into a net zero context.
Mr.Sort—Citizens'Advisory Board,Reading
Mr. Grace you talked about several pathways to build up to net zero or even possibly beyond net
zero, right? So, if you look at that, in that projection how much of that is based on biomass? I
mean, if you really look at biomass, you're saying that the biomass has to come from waste and
wood chips, right? And so there is not a finite resource. So, how much of this plan that you show
actually talks about biomass? Do you have any idea?For Massachusetts?
Mr.Grace—Sustainable Energy Advantage
So,the important point here is that each of these tears has a target, a percentage of load and a set
of potentially eligible resources. Biomass is one of 10 or 11 different types of resources that could
be used for meeting class one. In Massachusetts, very little biomass has been used or historically
has been part of the total. Class two,technically non-waste energy allows biomass. I don't believe
there's any class two that's currently certified. It's currently met almost entirely by legacy, small
hydro resources. Biomass would be eligible for the CESE if ft had less than 50% of the emissions
of a natural gas combined cycle plant which without sequestration or without having a very low
carbon fuel cycle using entirely waste, probably couldn't meet that.
The portfolio standards are standards that give you a lot of flexibility and how to meet. So, none of
them require biomass. Biomass is one of the tools that's available to meet it. Similarly, the
greenhouse gas emission standard or what's in the road map, 2050. Legislation that was vetoed
and recently resubmitted allows for biomass to be one of many sources after 2026 that would be
eligible. As Commissioner Woodcock identified, ft's a standard-based approach. Biomass, the
purpose of that standard-based approach is to understand that the greenhouse gas impacts of
biomass can occur over a wide range if you cut down a forest and sustainably ft's clearly not a good
thing from a greenhouse gas perspective.
Mr.Soni—Citizens'Advisory Board, Reading
Thank you. My point was that it's a very small number of that whole scenario, right? So people are
looking at renewables, they're primarily looking at new carbon-free, new sources, right? And
demand response, right? And demand response as ways of really cutting back on load and
carbon-free emissions. So, does the real solutions are going to come from non-biomass-based
options?
Mr.Grace—Sustainable Energy Advantage
Yes. The vast majority.
Mr.Hennessy—Board of Commissioners
In wood burning biomass, I've heard that mentioned that wood chips sawdust, tree trimmings would
be the source. If that plant in Palmer is built and five years down the road it runs out of raw material
in Massachusetts would that facility be able to probe the Massachusetts regulations to burn other
things like trees that deforest such as deforested lumber.
Commissioner Woodcock—Massachusetts Department of Energy Resources
Sorry, I didn't quite catch the part of that there. So, you're saying there could be a potential for a
change of what could be combusted in the facility?
Mr. Hennessy—Board of Commissioners
Yes is it written that ft can only be wood chips and things that have been used for other products
such as tree trimmings. Could there someday be the ability to deforest, use that as the raw
material at Palmer?
Commissioner Woodcock—Massachusetts Department of Energy Resources
So, you know, under our current regulations it requires, there would have to be 50% less than a
combined cycle natural gas facility. And so, it would take a regulatory change and furthermore
there is some statutory restrictions of what the department can do for the specific language, is using
advanced technology to and promote I believe greenhouse gas reductions. So, there would have
to be kind of determination that the regulation should be updated to reflect change. So, you know,
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there is some discretion to the Department of Energy Resources that's really what's reflected in
what we proposed. But there are some statutory restrictions.
Chair Small—Chair Citizens'Advisory Board,North Reading
And I think I add to that without any change lf such a plant was using tree trimmings for example
ineligible initially and then switch to using a clear-cut forest wood, for example, it would lose its
eligibility and therefore lose that as a revenue stream. Without that as a revenue stream, we've
done a lot of analysis of these it would be far more expensive than most of the other alternatives
that would really be difficult to operate profitable.
Mr.Talbot—Board of Commissioners
One brief follow-up on that is how, do you know what's on a truck coming from New York State,
New Hampshire, Vermont or Connecticut. I think your resource study that we have posted on our
website says that the supply shed might have to be as much as 160 miles or 169 miles from the
plant. How do you know what's in those trucks?
Commissioner Woodcock—Massachusetts Department of Energy Resources
So, yes, but there is a required that they certify and that as independently verified that the forests
are being managed sustainably. We do put pretty significant restrictions on requiring that they meet
these standards and they would be revoked if they are not applying to the standards of our
regulations.
At that point the Chair thanked the guests for their input and the guests departed the meeting.
8. Financial Report(Attachment 3)—Ms.Markiewicz
Ms. Markiewicz stated that the financial highlights in December included some large payments that
went out; the pension obligation transfer to the Mass Municipal Depository Trust on 12116 in the
amount of $2.1 million; the Town of Reading payment, which is the return on investment agreed
upon amount, half of that payment was made on 12129 of$1.2 million; the 2% net plant payments
based on the kilowatt hour usage by town on 12129, payments were made to the Town of
Wilmington for$440,000, Town of Reading for$465,000, Town of North Reading for$146,000 and
the Town of Lynnfield for approximately$52,000.
As we have been going through the COVID situation, we have been talking to you about Accounts
Receivable aging and why it's so important. The fact is that we can see how we are doing on sales
based on kilowatt usage. But the real measure is how fast we are bringing the cash in the door.
We have worked tirelessly with our customers to create payment plans, and help to get them set up
on a budget billing plan. Anyone who has a hardship immediately calls us and we work with them.
Through this presentation you can see that we have really improved since October working with our
customers and bringing payments in. Within that 30-day turnaround we can see that they also get
to take advantage of their prompt payment discounts. Looking at a 90-day outlook,we can see the
big picture levels out all the timing of payment plans and budget building. We have come a long
way from October when we were seeing quite the dip and now we are back up at 96%.
Mr. Hennessy indicated to Ms. Markiewicz, how surprised to see it bounced back almost to what
you've had the last few years, and what do you attribute it to being able, because I know there were
a lot of people and our four towns are probably, yes struggling a little bit financially because of the
pandemic and job loss and things like that. And I'm just wondering why do you think Its been able
to bounce back?
Ms. Markiewicz indicated that it's the communication that we put out there from our customer
service team and our credit and collections team along with the building team as well. We've
communicated to the customers that if you have a hardship they need to contact the RMLD. Just
call us up, we're going to work with you and we're going to try to make it, you know we're going to
handle it together. So, that's really what we've been doing. We've taken a lot more time and effort
in this area to work with each of the customers that need the help.
So, as you know we've closed the year 12131 and it takes quite a lot to you know finalize the books.
So hopefully by March we'll have a really good draft financial to present to you.
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Before moving onto Item 9, Mr. Soni asked the Chair of the Board of Commissioners if there would
be more discussion on the biomass. Chair Stempeck said not in open session. Mr. Soni indicated
that the CAB would like to have a brief comment to communicate. Mr. Soni further said that it just
came to my attention that the Town Select Board of Reading has a sent a letter to the TUE
committee, the state and also to the Governor asking them not to loosen their regulations for
biomass plants.
9. Integrated Resources Report(Attachment 4) -Mr. Underhill
Mr. Underhill reported that as part of the regular report we have tracked how our loads have done
through the year. Now that we finished the year and we've gotten some of the other things moving
forward we are going to go in and take a look at what comprises the load, residential, non-
residential classes and see how we fared through the year;what was COVID related and what was
weather related. But as you can see the 2020 actual loads fared a little bit better than 2019 actuals
and about 3%below what was projected for 2020 in the forecast itself.
Mr. Underhill stated that the RMLD has been tracking how our actual costs have performed against
our budget. We are tracking at a little over $3.5 million, low budget for this year. There are a
number of factors to that;capacity costs were down because loads were down, energy costs stayed
dramatically low. So again,we've done better than anticipated for this year with the load staying up
and cost staying down.
Mr. Underhill posted transactions under the TFA which is driven by time and price triggers. If the
price in the forward market is below a four-year historic average, the RMLD will buy peak/off peak
energy and fill those blocks. December 30"'was the date that we actually closed on the transaction
for this year. We brought just under 7% of our retail load at below the four-year historic average for
energy. In 2022, the WILD signed up for just under 2% of our load and you have the
corresponding budget impacts for those two years purchases there. And some of this information
appears every month in one of the other slides but I wanted to pull it out and to show you how the
continuing compare with our day transaction activity.
10. Engineering and Operations Report(Attachment 5) -Mr.Jaffari
Mr. Jaffari went over his presentation. As far as reliability, I'm glad to announce that this year was
another successful year with good numbers and we have submitted for an award to APPA for the
Northeast region.
Mr. Jaffari went over the causes of the outages, lots of storms, time falls and animal contacts;
despite these the reliability statistics are still good and staff if managing well.
Mr. Jaffari discussed the updates on the Service Requirements Handbook that is published on the
website; updates were posted today. A Service Requirements Committee was formed and
completed in CY2020. This process started by doing a study on 46 municipal utilities and IOUs
researching the best business practices, models, incentives, electrification concerns, energy
efficiencies, and the solar/BESS installations.
Many of the SRH sections have been updated and were made more user friendly with updated
figures, drawings, and tables. Sections such as primary metering, URDs, etc. RMLD has raised the
level of the transformation that it would provide for the customers up to and including 750 KVA for
Non-URD customers. However,they still need to pay for primary cables and installation labor. So,
this strategic change will provide incentive for the customers, especially commerciaUndustry, to
move into our service territory. The requirements for URD customers have not been changed.
For primary metering, RMLD has multiple requirements for customers to be considered including:
(1) customers must have only one account and not multiple accounts and (2) customer must have
over 1500 KVA of single or cumulative load or cumulative. However, in order to be qualified,
requires RMLD's analysis and discretion by the Primary Metering Committee. The SRH committee
will look at other parameters like (1) the difficult to access electrical facilities; (2) the long primary
distributions; and (3) unique electrical set up, constructions, and configurations. Each customer's
request will be reviewed and decided on a case by case.
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The IRD retail incentives are reviewed on a regular basis and updated on the website. In this
section of SRH, RMLD has made lots of improvements in programs and incentives, which include
promoting energy efficiency appliances like Star Energy appliances and electrification and offering
incentives for the heat pumps, EV chargers, panel upgrades, and outside electric appliances.
There is a section in SRH that shows basically what those are and how the customers could benefit
from those programs.
Ms. O'Brien thanked the Service Requirements Committee for their time and effort on the
handbook. The Service Requirements Handbook has been on the website for many years. It's
very comprehensive. It's very typical for large utilities to have these. Having a dedicated
committee to continuously look at its content and ensure proper updates commensurate with
industry changes and best utility practices Is important. Many of the updates are geared more
towards developers and commercial. Ms. Mulvaney is going to send out a press release on it as
well.
11. RMLD Procurement Requests Requiring Board Approval(Attachment 6)-Mr. Jaffari
IFS 2020-30 Station 4 Air Conditioning Project
Mr. Jaffari explained that this is the cooling system for station for the control house. The switchgear
inside the control house is running hot during summertime, which reduces the thermal
capacity/ampacity or current carrying capability of the feeders going out of substation. So, in order
to prolong the life of the equipment as well as improving the ratings of the cables and the gateway
going out of the station,a cooling unit is required to improve the overall operating conditions.
The RMLD sent a bid to 26 bidders and only two responded: Kneeland Construction Corporation
and Ambient Temperature. Ambient Temperature was the lowest responsible responsive bidder.
Kneeland Construction did not meet the requirement to be specialized in HVAC.
Mr. Pacino made a motion that bid 2020-30 for Station 4 Air Conditioning Project be awarded to:
Ambient Temperature Corporation for$104,600.00, pursuant to M.G.L., c. 30§ 39M, as the lowest
responsible and eligible bidder, on the recommendation of the General Manager, seconded by Mr.
Hennessy. Roll Call Vote: Chair Stempeck, aye; Mr. Hennessy: aye; Mr. Talbot: aye; Mr. Pacino,
aye; Mr.Coulter, aye. Motion carried: 5:0:0.
12. Discussion of whether to adopt the open meeting exemption under G.L.c.164,§47D in
connection with the Board's review of power supply matters.
The Board of Commissioners discussed the language for motions used in order to go into motion to
discuss power supply contracts.
Mr. Pacino made the motion pursuant to G.L. c.164 section 47D,the Board hereby moves that the
disclosure of confidential power supply information, including confidential provisions of Power
Purchase Agreements(°PPAs"),will adversely affect its ability to conduct business in relation to
other entities making, selling,or distributing electric power and energy pursuant to G.L. c.164. The
Board's review and discussion of PPAs and related information subject to contractual confidentiality
obligations shall be exempt from the open meeting requirements of G.L.c.30A, sections 20 and 21,
seconded by Mr. Hennessy. Roll Call Vote: Mr. Hennessy, aye, Mr. Pacino, aye; Mr. Stempeck,
aye; Mr. Talbot, aye, Mr. Coulter, aye. Motion carried: 5:0:0.
13. General Discussion—Chair Stempeck
The next Board meeting was scheduled for February 18th. Mr. Coulter will cover the February CAB
meeting (date to be determined).
14. Executive Session—ACTION ITEM
Mr. Pacino made the motion that the Board go into Executive Session to consider the purchase of
real property for the construction of a new substation in Wilmington and to discuss confidential,
competitively sensitive or proprietary information in relation to a potential transaction with an energy
power supplier in connection with the purchase and sale of electric power and energy and return to
Page 113
Regular Session for the sole purpose of adjournment., Seconded by Mr. Hennessy. Roll Call Vote:
Chair Stempeck, aye; Mr. Hennessy: aye; Mr.Talbot: aye; Mr. Pacino, aye; Mr. Coulter, aye.
Motion carried: 5:0:0.
15. Adjournment
The Board of Commissioners returned to regular session for the sole purpose of adjourning and
promptly adjourned at 10:23 PM.
BOARD MATERIAL AVAILABLE BUT NOT DISCUSSED
Accounts Payable/Payroll Questions
A true copy of the RMLD Board of Commissioners Minutes
As approved by a majority of the Commission
VhilipB cipD lAp«�.ZOIl15:30 EDT)
Philip B. Pacino, Secretary Pro Tem
RMLD Board of Commissioners
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