Massachusetts governor issues wide-ranging energy plan

New York (Platts)--11Aug2006


Massachusetts Governor Mitt Romney on Friday issued a long-term energy
plan that calls for market-based pricing of electricity, including real-time
pricing for industrial users and time-of-day rates for small businesses and
residential customers.

The Republican governor said these measures will encourage efficiency
and conservation. The plan also calls for the state to create a "negawatts"
market by requiring utilities to pay customers for for efficiency reductions
whenever they are cheaper than the cost of new generation.

Under the Next-Gen plan, the state government would have to meet new
efficiency standards for state buildings. Romney also wants to encourage
on-site generation by reducing the "standby" rates that utilities charge for
providing backup service.

Further, the plan would encourage biomass energy development by
clarifying regulations on fuel inputs and co-firing, for biomass to qualify
under the state's Renewable Portfolio Standard.

The state also would fund wood supply and transportation infrastructure
and expedite permitting of wind projects.

Massachusetts plans to promote the use of biofuels in state buildings and
vehicles and provide tax incentives for efficient vehicles. Romney said the
changes are necessary because of rising energy prices, limited infrastructure,
lack of fuel diversity and surcharges under the locational installed
capacity rules of the Independent System Operator of New England.

Romney's proposals must be implemented by various state agencies,
including the Department of Telecommunications and Energy, the Office of
Environmental Affairs and the Office of Economic Development.

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