MA DPU SMART Order - 7 Highlights

On Wednesday, September 26, 2018, the Massachusetts Department of Public Utilities (“DPU”) issued its long anticipated Order DPU 17-140-A approving the SMART model tariff (the “SMART Order”).

Like everyone, we are still digesting the contents of the SMART Order but wanted to highlight some of the major issues:

Opening of the Application Portal. UPDATE: DOER announced on October 11, 2018 that the SMART portal will open on November 26, 2018. The SMART Order allows the application window to open at any time but the actual date for opening the application portal will be established in the coming days by the Massachusetts Department of Energy Resources ("DOER"). DOER has announced that it will be holding a statewide series of "SMART Launch Presentations" now that DPU issued the SMART Order to prepare for the start of the program. DOER will announce the portal opening soon but the portal opening date is not likely to be before the distribution companies file a revised model tariff (currently due to be filed by October 15, 2018) or the last of the DOER meetings (currently scheduled for October 19, 2018). Given the regulatory structure relating to the closure of the SREC II program and the SMART program start date, we would also expect DOER to provide enough notice to allow developers of SREC II projects to plan for that transition. As a result the SMART program portal opening date may not be until November 2018.
Evidence of Mechanical Completion for SREC II Projects. It is our understanding that the window to submit evidence of mechanical completion of SREC II projects will close as soon as the application portal for the SMART program opens. We urge anyone with SREC II projects to submit evidence that these projects are mechanically complete as soon as possible.
Alternative On-Bill Credits. While the distribution companies had proposed to cap the alternative on-bill credits a customer could receive based on the customer's prior year electricity usage, DPU's SMART Order declines to approve such a cap at this time. DPU directed the distribution companies to work with DOER, the Attorney General, and stakeholders to determine whether and what sort of a cap may be appropriate in the future.
Capacity Rights. The SMART Order does not address ownership of capacity rights and states that DPU will issue an order addressing capacity rights in the future as part of its open docket D.P.U. 17-146. The Order makes clear that neither SMART facility owners nor distribution companies may assert title to the capacity of facilities receiving a SMART program incentive payment until such order is issued.
Capacity Block Merger. UPDATE: DOER announced on October 11, 2018 that the Eversource blocks and rates will remain separate. The SMART Order acknowledges that, subsequent to the adoption of the final SMART program regulation, Eversource became a single distribution company comprising what was once Eversource (East) and WMECO, and directs Eversource and DOER to work together to determine Eversource’s new SMART program capacity blocks and base compensation rates in light of that merger. This issue was not raised during the docket’s discovery, hearing, or briefing phases. Ultimately, changes to the program’s structure, including changes to blocks and base compensation rates, are matters for DOER. We understand that DOER is working with Eversource on a proposed plan and expect guidance as soon as possible. DOER fully appreciates that the rules have been in place for well over a year and we expect the outcome here would reflect the industry’s expectation and the legislative requirement of an “orderly transition” from the SREC II program to the SMART program.
Definition of Environmental Attributes. DPU rejected the distribution companies’ proposal to allow the definition of environmental attributes in the SMART program tariff to differ from the corresponding definition in the SMART program regulation by including environmental attributes defined under future laws and regulations. The SMART Order directs the distribution companies to amend the definition of environmental attributes in the tariff to match the definition contained in the SMART program regulation.
Term of Incentive Payments. DPU declined to extend the time period for the life of incentive payments from 90 days to one year although it recommended that DOER investigate this matter when DOER reviews the SMART program after statements of qualification have been issued for 400 MW of SMART projects.

FURTHER INFORMATION

For further information about these matters, please contact Courtney Feeley Karp at cfeeleykarp@klavenslawgroup.com or 617-502-6284.

DISCLAIMER

This document, which may be considered advertising under the ethical rules of certain jurisdictions, is provided with the understanding that it does not constitute the rendering of legal advice or other professional advice by Klavens Law Group, P.C. or its attorneys. Please seek the services of a competent professional if you need legal or other professional assistance.