Senate committee reviews S.65 rewrite that alters efficiency-utility rules, restores biomass incentives and sets equity spending target

A Senate Natural Resources & Energy Committee meeting on March 13 examined draft 4.3 of S.65, a rewrite that modifies how the state’s efficiency-utility programs would be funded and governed and reinstates a statutory incentive for high-efficiency biomass heating systems.

The committee opened the discussion with Ellen, legislative counsel, noting the draft label and the changes highlighted from the prior day: "the committee to strike all amendment to S.65. It is today's draft is draft 4.3, dated March 13 at 08:43AM. The changes from yesterday's draft are highlighted in yellow," she said. Ellen walked members through edits to the clean heat standard provisions and the efficiency-utility sections.

The draft restores a provision that requires an appointed entity delivering services using certain ISO New England forward capacity revenues to “give priority to incentives for the installation of high efficiency biomass heating systems” and establishes a goal that incentives equal 25% of installed cost. The draft also explicitly states that providing an incentive for a biomass heating system “shall not be contingent on the making of other energy efficiency improvements at the property.” Committee counsel said that language previously existed in statute but was left out in an earlier rewrite and is now being reinserted.

The draft also reorganizes how the Public Utility Commission is to set a budget for the appointed efficiency entity. The committee counsel summarized the change as replacing a prior direction about setting an efficiency charge with instructions that the commission should "establish an appropriate budget for the appointed entity using the efficiency fund," consider all revenue sources and limitations on electric revenues, and in reviewing plans "approve a budget that is consistent with the principles of least cost integrated planning" and that shows cost-effectiveness using the approved societal cost-benefit test.

Committee members discussed the intent and clarity of the edits. Senator Hardy said the new language clarifies the objective of lowering energy costs for low-income households: "the point that was made yesterday of reducing the cost of energy for low income people and being explicit about it." The draft adds an equity provision requiring that "not less than 25% of the annual budget shall be targeted for residential services for customers with low to moderate income," and specifically lists weatherization and other efficiency measures as included services.

Representatives of the Public Utility Commission voiced concern about the speed and scope of late edits. Ed McNamara, who identified himself at the hearing as the commission chair, said the bill raised "significant policy concerns" and that he had seen the changes only that morning, calling the process "haphazard" and urging more time to evaluate changes affecting roughly $50 million a year in efficiency funding streams.

Committee members said they would continue editing the draft and were not expected to vote it out the same day. Chair Watson signaled more work to come: the committee will circulate further edits, consider an intent paragraph for the registry portion, and review the PUC’s feedback on the societal cost-benefit language.

Ending: The committee paused to gather suggested edits from witnesses and members and said it expects further revisions before a likely vote the next day. The discussion left open several policy decisions — notably which state agency should administer a heating-fuel dealer registry and how the efficiency utility budget tests will be applied — and stakeholders including the PUC and industry asked for more time and specific red-line language before the committee proceeds.