Massachusetts DOER Issues Compensation Rates for SMART Program; EDCs Select 17 Projects for Long-Term, Tariff-Based Payments in SMART Program RFP

Yesterday, the Massachusetts Department of Energy Resources (DOER) released important new guidelines for its Solar Massachusetts Renewable Target (SMART) Program, by which the Commonwealth will procure up to 1,600 megawatts (MW) of new solar photovoltaic generation and Renewable Energy Credits (RECs) over as many as eight (8) consecutive “capacity blocks” of approximately 200 MW each.  Qualified solar projects enrolled in the program will receive tariff-based payments for 10 or 20 years depending on project size, subject to compensation rate adders and subtractors that reflect project characteristics including project location, whether the project has battery storage capability, or will serve low-income customers.  Under the new guidelines, the Capacity Block 1 base compensation rates for projects of 1 – 5 MW are as follows:

Capacity Block 1 base compensation rates for Massachusetts Electric and WMECO reflect the mean prices of winning bids selected in the SMART Program RFP, by which the Commonwealth’s electric distribution companies (EDCs) procured 17 new Solar PV projects with aggregate generating capacity of 53 MW.  For the remaining EDCs, DOER “administratively set” base compensation rates due to a lack of submitted RFP bids.  For each subsequent capacity block, compensation rates will decline from the base compensation rate by 4%. [1]

Completion of the SMART Program RFP and issuance of the DOER’s guidelines are important milestones in the development of the program, and provide essential information for stakeholders, including solar project developers interested in obtaining the long-term, tariff-based payments that the SMART Program will provide.  The EDCs' proposed SMART Program tariff is now under review by the Massachusetts Department of Public Utilities in Docket No. 17-140. DOER is likely to begin accepting applications for SMART Program certification and participation in the remainder of Capacity Block 1 and subsequent capacity blocks in Spring or early Summer 2018.

For more information regarding the SMART Program or any other energy-related issue, please contact one of our energy attorneys:

• Andrew Kaplan at akaplan@pierceatwood.com or 617.488.8104
• Jim Avery at javery@pierceatwood.com, or 617.488.8125
• Jared des Rosiers at jdesrosiers@pierceatwood.com or 207.791.1391

[1] Given their comparatively low amount of load served, both Fitchburg Gas & Electric and Nantucket Electric elected to procure capacity in fewer than eight capacity blocks.  As such, compensation rates in both EDCs’ service territories will decline at greater than 4% per capacity block.