Energy Efficiency First Fuel Requirement (Gas and Electric)

February 16, 2023

Summary

Origin

In 2008, the Governor of Massachusetts signed a major energy reform bill, S.B. 2768, otherwise known as the Green Communities Act (GCA). This bill required electric and gas utilities to prioritize cost-effective energy efficiency and demand reduction resources oversupply resources and ordered that utilities submit three-year plans outlining how they would meet the requirement. The bill also created the Energy Efficiency Advisory Council (EEAC) to play a key role in designing and reviewing utility plans designed to meet the requirements of the Green Communities Act. 

Electric and Natural Gas Sales Reduction Requirements

Highlights of the targets and other features of the most recently approved statewide three-year plan for the years 2022-2024 can be seen in the table below.

Utility Type Electric Gas
2030 Annual Emissions Reductions (MTCO2e; 2022-2024) 475,018 370,898
Proposed Net Annual Energy Savings (MMBTu; 2022-2024) 12,055,294 7,599,859
Performance Incentive (Total)
$131.8 million $38.2 million
Equity Component Threshold (% of Proposed Savings Goals)
85%
85%
Electrification Component Threshold (% of Proposed Savings Goals)
60%
60%
Standard Component Threshold (% of Proposed Savings Goals)
75%
75%
Performance Incentive Cap (% of Proposed Savings Goals) 125% 125%

However, it is important to note that the plans are subject to "mid-term modifications" by each utility. To see the most recent plan and updates, as well as information on implementation to this point, please visit the EEAC's websiteFunding to implement the plans comes from a variety of sources.

Program Administrator Type

Massachusetts' electric and gas utilities implement the programs required for meeting the statewide targets of the GCA.

Cost Effectiveness and Program Evaluation

Massachusetts uses the Total Resource Cost (TRC) test, one of the five "California tests" in the California Standard Practice Manual, as its primary cost-effectiveness test.

Utility Cost Recovery Provisions

As outlined in the Sales Reduction section above, investor-owned utilities in Massachusetts are permitted to receive a performance incentive capped at 125% achievement of their agreed-upon goals. The thresholds for the equity, electrification and standard component incentives under the 2022-2024 plan are the achievement of 85%, 60%, and 75% of the agreed-upon goals, respectively. 

In addition, the GCA requires Massachusetts' investor-owned utilities to transition to full decoupling of their revenues from their sales. Until a decoupling mechanism is put into place, these utilities may recover lost base revenues from incremental efficiency savings.

Special Provisions

Large customers are permitted to "self-direct" the funds they would pay towards utility cost recovery for these programs for programs of their choosing. 

Program Overview

Implementing Sector: State
Category: Regulatory Policy
State: Massachusetts
Incentive Type: Energy Efficiency Resource Standard
Web Site: http://ma-eeac.org/
Administrator:
Start Date:
Eligible Renewable/Other Technologies:
  • Yes; specific technologies not identified
Electric Sales Reduction: N/A
Electric Peak Demand Reduction: Active Peak Demand Reduction in MW for 2022-2024 is 280,049 MW
Natural Gas Sales Reduction: N/A
Rate Impact Parameters: N/A

Authorities

Name: M.G.L. ch. 25, § 21
Date Enacted: 06/02/2008
Effective Date: 01/01/2009

Contact

Name: Massachusetts Energy Efficiency Advisory Council
Address:
MA
Email: MA-EEAC@mass.gov

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.