Summary of Comments on the Proposed Massachusetts Forward Clean Energy Market

Published: March 16, 2023

By: Danielle Powers, Executive Vice President

The Massachusetts Department of Energy Resources (“MA DOER”) issued the framework for its proposed Forward Clean Energy Market (“FCEM”) in January of 2023, and invited written comments on the proposal. Comments were submitted by numerous interested parties, including market participants, utility ratepayers, advocacy groups, and concerned citizens. A review of the submitted comments revealed some common themes.

One of the most consistently submitted comments was the desire for a robust stakeholder process. Many parties requested that the MA DOER work with other New England states to establish a formal public stakeholder process to consider, discuss and debate the FCEM proposal via technical conferences and public comment periods. The parties reasoned that this would allow the involvement of stakeholders not directly involved in the energy markets (e.g., ratepayers, community groups, and environmental advocates) and give a voice to those ineligible to participate in meetings involving the design and operation of the New England energy markets. An open and transparent stakeholder process is critical in moving a proposal forward and designing a market with the greatest chance of success.

In addition, several parties recognized that the proposed market design is highly complex. This complexity can potentially restrict competition by developers and clean-energy resource suppliers, and substantially limit the possible benefits of the proposed market. In addition, it will take years to resolve questions and details around jurisdiction, governance structure, interaction with existing wholesale markets, multiple products and multiple commitment periods, and the auction mechanism.

The existing capacity market took dozens of meetings among over 80 stakeholders for almost two years to finalize and implement, and the proposed FCEM is far more complex than the current market. It is reasonable to assume that this market would not be implemented until 2025 for a 2028 delivery period at best. This delay is a critical issue in achieving the objectives of the FCEM.

The comments submitted also recognized the importance of alignment between the FCEM and the existing regional wholesale markets. For the FCEM to successfully meet region-wide policy goals and reliability needs, the market must be compatible with the existing wholesale markets administered by ISO New England. While this does not require FCEM and current wholesale market integration, the need to consider the obligations, requirements, and revenues associated with the FCEM in the existing wholesale markets is unavoidable.

Finally, several comments on the proposed FCEM centered around the failure of the existing capacity market in New England in advancing the state’s climate mandates and integrating these mandates into the competitive markets. This criticism is unfounded. The competitive energy markets are designed to provide reliable wholesale electricity at competitive prices, not to address public policy mandates.

All views expressed in this summary are solely the current views of the Author and do not necessarily reflect the views of Concentric Energy Advisors, Inc., its affiliates, subsidiaries, and related companies, and the clients of Concentric Energy Advisors. The Author’s views are based upon information the Author considers reliable at the time of publication.

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