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COMMONWEALTH of MASSACHUSETTS DEPARTMENT of PUBLIC UTILITIES ) Investigation of the Department of Public Utilities, ) on Its Ow

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COMMONWEALTH of MASSACHUSETTS DEPARTMENT of PUBLIC UTILITIES ) Investigation of the Department of Public Utilities, ) on Its Ow COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF PUBLIC UTILITIES ) Investigation of the Department of Public Utilities, ) on its own Motion, Commencing a Rulemaking ) pursuant to G.L. c. 164, § 139A; G.L. c. 30A, § 2; ) D.P.U. 17-10 and 220 C.M.R. § 2.00 et seq., ) to Amend 220 C.M.R. § 18.00 et seq. ) ) REPLY COMMENTS OF NATIONAL GRID AND UNITIL I. Introduction On May 16, 2017, the Massachusetts Department of Public Utilities (“Department”) opened a proceeding and issued an Order instituting a rulemaking (“Rulemaking Order”), proposing to amend its net metering regulations at 220 C.M.R. § 18.00 et seq. in response to legislation, and requesting public input. Rulemaking on Net Metering, D.P.U. 17-10, at 2, 5 (2017).1 The Rulemaking Order set forth nine topics for discussion on implementing the provisions of Section 139A regarding hydroelectric power net metering.2 On June 30, 2017, seventeen parties submitted initial comments.3 Fitchburg Gas and Electric Light Company d/b/a 1 On August 8, 2016, Governor Baker signed into law Chapter 188 of the Acts of 2016, “An Act to Promote Energy Diversity (“Act”).” Among other things, Section 10(b) of the Act provides that the Department of Public Utilities (“Department”) “may require the electric distribution companies to amend the net metering tariff to create a program for small hydroelectric power net metering facilities in the commonwealth.” St. 2016, c. 188, § 10, establishing G.L. c. 164, § 139A (hereinafter, “Section 139A”). 2 Section 139A(a) defines “small hydroelectric power net metering facility,” which the Department has proposed to incorporate into several definitions within 220 C.M.R. § 18.02, including Class II Net Metering Facility and Class III Net Metering Facility. The proposed regulations also add a new net metering credit calculation for small hydroelectric power net metering facilities in 220 C.M.R. § 18.04(6A), instead of adding a separate definition for “small hydro tariff,” as provided in Section 139A(a). Finally, the proposed regulations amend 220 C.M.R. § 18.07(4) to define the capacity of all non-solar net metering facilities, including small hydroelectric power net metering facilities, as the facility’s nameplate rating in alternating current. 3 Commenters included: Ampersand Collins Hydro, LLC; Bay State Hydropower Association, L.P. Athol Corporation; Olson Electric; West Dudley Hydro; The Cadmus Group, Inc.; Chad W. Cox, P.E.; State Representative and Chairman Thomas A. Golden, Jr.; the Department of Energy Resources (“DOER”); D.P.U. 17-10: National Grid and Unitil Reply Comments Unitil (“Unitil”) and Massachusetts Electric Company and Nantucket Electric Company, each d/b/a National Grid (“National Grid”) offer the following reply comments. II. General Comments To the extent that the Department deems it necessary and within the public interest to establish a program for small hydroelectric power net metering facilities, the Department should offer clarifications within its final decision as to whether the general net metering provisions, regulations, and guidance will apply to small hydroelectric power net metering facilities.4 If it was not the Department’s intent to apply the general net metering provisions to small hydroelectric power net metering facilities in the absence of statutory language to the contrary, then the Department should make its intent clear in its final order. III. Comments on Specific Topics 1. Whether the phrase “anaerobic digestion net metering facility” in the statutory definition of “small hydro tariff” should be interpreted to be a legislative drafting error and therefore, the Department should not alter the anaerobic digestion net metering facility net metering credit calculation in 220 C.M.R. §§ 18.04(1), 18.04(5). There was universal agreement among commenters who addressed this issue in their initial comments that the inclusion of the term “anaerobic digestion net metering facility” within the definition of “small hydro tariff” from Section 10(a) of the Act should be deemed a Eversource; the Massachusetts Department of Agricultural Resources; the Massachusetts Water Resources Authority; National Grid; New England Hydropower Company, LLC; State Representative Daniel F. Cahill; State Senator Anne M. Gobi; Town of Springfield; and Thorndike Energy, LLC. In addition, State Representative Stephen Kulik filed comments on July 5, 2017. 4 Some examples of implementation issues would include, at a minimum, whether the Department’s “single parcel rule” for net metering facilities applies to small hydroelectric power net metering facilities, whether the appropriate form of compensation for small hydroelectric power net metering facilities is bill credits or checks, and other issues decided as part of the Department’s orders and guidance interpreting and applying the net metering statute and regulations. -2- D.P.U. 17-10: National Grid and Unitil Reply Comments legislative drafting error.5 National Grid and Unitil agree that this is the most reasonable interpretation of its inclusion. 2. Whether the Department should use the System of Assurance of Net Metering Eligibility or another process to track the aggregate capacity of small hydroelectric net metering facilities for the purpose of ensuring that no more than 60 MW be permitted to participate in the small hydro tariff program. There was broad agreement among commenters who addressed this issue in their initial comments that the Department should require small hydroelectric power net metering facilities to obtain a net metering cap allocation from the System of Assurance of Net Metering Eligibility (“System of Assurance”) rather than developing a new process for the small hydroelectric power net metering cap.6 However, some commenters recommended minor changes to the System of Assurance, and other commenters suggested a different “initial reservation period” for applicants than the timeframe that is currently found in Appendix A, “System of Assurance of Net Metering Eligibility,” adopted pursuant to the Department in Net Metering and Interconnection of Distributed Generation, D.P.U. 11-11-A (2012), for “all other net metering facilities.”7 If the Department does intend to direct small hydroelectric power net metering facilities to use the System of Assurance to obtain net metering cap allocations, it should also clarify the applicable initial reservation period. 5 These commenters were: Ampersand Collins Hydro, LLC; Bay State Hydropower Association, L.P. Athol Corporation; Olson Electric; West Dudley Hydro; the Department of Energy Resources; Eversource; National Grid; and New England Hydropower Company, LLC. 6 These commenters were: Ampersand Collins Hydro, LLC; Bay State Hydropower Association, L.P. Athol Corporation; Olson Electric; West Dudley Hydro; The Cadmus Group, Inc.; the Department of Energy Resources; Eversource; National Grid; and New England Hydropower Company, LLC. 7 These commenters were: Ampersand Collins Hydro, LLC; Bay State Hydropower Association, L.P. Athol Corporation; Olson Electric; West Dudley Hydro; The Cadmus Group, Inc.; and New England Hydropower Company, LLC. -3- D.P.U. 17-10: National Grid and Unitil Reply Comments 3. Whether small hydroelectric net metering facilities may obtain a cap allocation under the existing net metering caps once the 60 MW capacity cap is reached for the small hydro tariff program. a. If so, how the Department should define “units” for a small hydroelectric net metering facility. See e.g. D.P.U. 11-11-C at 16-19. Please refer to the response to # 4, below. 4. Whether existing small hydroelectric net metering facilities should be transferred to the small hydro cap of 60 MW. Several commenters addressed whether the existing small hydroelectric net metering facilities should be transferred to the small hydropower net metering cap of 60 MW. The DOER, Eversource, and National Grid asserted that such capacity should be transferred to the new cap. Other commenters thought that such facilities should not be transferred, or should only be transferred upon their request.8 Based on the plain language of the statute, the Legislature intended to provide 60 MW of aggregated net metering capacity to small hydroelectric generating facilities, at a new rate, both of which would warrant including all such facilities within the new special cap.9 Accordingly, the Department should direct that all such facilities currently included within the private cap be identified and attributed towards the special 60 MW cap. In addition, in its proposed regulations, the Department has included Small Hydroelectric Net Metering Facility within its definitions of 8 These commenters were: Ampersand Collins Hydro, LLC; Bay State Hydropower Association, L.P. Athol Corporation; Olson Electric; West Dudley Hydro; The Cadmus Group, Inc.; and New England Hydropower Company, LLC. 9 When the Legislature created a definition of “Net Metering Facilities of a Municipality or Other Governmental Entity” (“public net metering facilities”) and a special cap for them in 2010, the Department defined the new cap as the “public cap,” and referred to the cap on all other net metering facilities (“private net metering facilities”) as the “private cap.” In designing the System of Assurance, the Department established rules that prevented public net metering facilities from applying to the private cap, and prevented private net metering facilities from applying to the public cap. Accordingly, all public net metering facilities that interconnected and were receiving net metering service prior to the establishment of the two caps were identified and allocated towards the public cap. -4- D.P.U. 17-10: National Grid and Unitil Reply Comments Class II Net Metering Facility and Class III Net Metering Facility, which it need not do. See 220 C.M.R. § 18.02. The Department’s amended definitions suggest that both the private cap and the public cap could contain Class II and Class III small hydroelectric power net metering facilities, confusing the question of what rate applies and whether such facilities may exceed a maximum facility capacity of 2 MW – two points on which Section 139A is specific and clear.
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