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In 2017, Cape Light Compact become a green aggregation. This means that the Compact, through its supplier NextEra® Energy Services Massachusetts LLC, (NextEra Energy Services) is providing a 100% renewable product by matching Compact customers' annual electricity usage above the mandated state requirements with voluntary Renewable Energy Certificates (RECs), in addition to investing in new renewable energy resources through the EarthEra™ Renewable Energy Trust.
What is Green Aggregation?
Green aggregations are municipal aggregations that make an affirmative decision to meet more than the required amount (under the MA Renewable Portfolio Standard) of their aggregated electricity usage with renewable energy, usually through the purchase of additional Renewable Energy Certificates (RECs). This "greener" power supply option becomes the default option for customers participating in the aggregated supply. There are several municipal aggregations in Massachusetts offering high renewable content products. Becoming a green aggregation utilizes the vehicle of municipal aggregation to achieve renewable energy purchasing at scale, which makes a tangible impact on accelerating renewable energy development by creating more demand for renewable energy.
How did the Compact become a Green Aggregator?
- The Compact has directed NextEra Energy Services to procure an additional 1% of RPS-qualified MA Class 1 RECs on an annual basis. When aggregated across the combined usage of all of the Compact’s customers, this represents a significant number of RECs. Since the RPS requirement for Class 1 RECs increases year-over-year, there is built-in growing demand that drives the build-out of new projects to produce the required RECs. By taking an extra 1% of those RECs off of the market every year above the already-growing requirement, Compact customers are creating an additional incentive for new renewable projects to be developed.
- In addition to exceeding the procurement requirement for RPS-qualified RECs as described above, the Compact has also directed NextEra Energy Services to purchase enough EarthEraTMRECs to make all Compact customers’ load 100% renewable. NextEra Energy Services retires voluntary EarthEra RECs for any load not covered by state-mandated requirements or by the additional 1% of MA Class 1 RECs described above. NextEra deposits 100% of the funds from the EarthEra RECs into the EarthEraTM Renewable Energy Trust. The EarthEraTM Renewable Energy Trust is a fund established by EarthEra, LLC, an affiliate of NextEra Energy Services, for the purpose of developing renewable energy projects in the United States. Funds from the Trust, which is administered by an independent third party, can only be used for new renewable energy projects. NextEra Energy Services has made a commitment to direct those funds to projects in New England to the extent possible.
- NextEra Energy Services has also made a commitment to direct its own funds into the Trust in addition to those proceeds from the sale of the EarthEra RECs, which leverages the Trust contributions of Compact customers.
- The source of the funds deposited into the EarthEra Trust includes: 1) All of the revenue from the sale of the EarthEra RECs and 2) All of the NextEra Energy Service's contracted supplier fees (for avoidance of doubt, there are no additional fees that are being charged to supply this service). These funds, deposited into the EarthEra Trust, are guaranteed to be dedicated to the development of new renewable energy projects.
The result is that customers who participate in the Compact's green aggregation power supply program will be purchasing renewable energy, creating an increased demand for renewable energy projects, and directly funding the construction of new renewable energy projects through the EarthEra Trust.
Learn More About Renewable Electricity and Cape Light Compact's REC Sources
Renewable energy is energy that is generated by resources that are naturally replenished on a relatively short timescale, including wind, solar, geothermal, tidal, etc. In order for electricity to be considered "renewable," it must be matched with Renewable Energy Certificates (RECs).
A REC is a tradable commodity that represents the clean energy attributes of 1 megawatt-hour (MWh), or 1,000 kilowatt-hours (kWh) of electricity generated by a renewable energy resource (e.g., a solar farm).
Watch this short video from the U.S. Environmental Protection Agency for a simple explanation of renewable electricity and the role of RECs.
Where does Cape Light Compact purchase RECs for its green aggregation?
The Compact, through its supplier NextEra Energy Services, acquires both RPS-qualified RECs and Clean Energy Standard (CES) qualified Clean Energy Credits (CECs) from New England Sources to comply with state mandates. The Compact also acquires voluntary EarthEra™ RECs from renewable projects in the U.S. outside of New England through its supplier.
The RPS-qualified RECs include MA Class 1 RECs from local sources; 7 rooftop solar photovoltaic (PV) systems located on Cape Cod, and the Princeton Municipal Light Department’s wind farm located in Princeton, MA. The local solar PV systems were installed in 2010 through the Cape & Vineyard Electric Cooperative, a local electric cooperative that has helped municipalities across Cape Cod and Martha's Vineyard install 28 megawatts of solar PV to date. Princeton Wind includes two 1.5 MW wind turbines on the south flank of Wachusett Mountain that produce approximately 4,000,000 kWh of electricity each year.
The Compact requires NextEra Energy Services to purchase an additional 1% of MA Class 1 RECs over the RPS requirement and to also acquire voluntary EarthEra RECs above the state mandated requirements such that a total of 100% of the Compact customers' electric load is matched. By way of example, in 2022, the RPS requires that 20% of retail electric sales be met with RPS-qualified MA Class I RECs. NextEra Energy Services meets 21% of Compact customers’ retail electric sales with RPS-qualified MA Class I RECs. The Commonwealth of Massachusetts requires that 51.3% of retail electric sales be met with clean energy resources that are located within the New England region (20% met with MA Class I RECs and 31.3% met with Clean Energy Credits and other mandated RECs). NextEra Energy Services purchases an additional 1% of MA Class I RECs and 47.7% of EarthEra RECs from sources in the U.S. outside of New England, in order to match the remaining 48.7% of retail load with RECs such that a total of 100% of the Compact’s customers’ electric load is matched. The pie charts below display the percentages of RECs and CECs NextEra Energy Services is purchasing on behalf of Compact customers in 2023.
For more information about RECs, please see our power supply FAQs.
|Code of Massachusetts Regulations (CMR)||Included Standards|
|Clean Energy Standard – CES – 310 CMR 7.75||Clean Energy Standard (CES); Clean Energy Standard Existing (CES-E)|
|Renewable Energy Portfolio Standard – RPS Class I – 225 CMR 14.00||RPS Class I; Solar Carve-Out I; Solar Carve-Out II|
|Renewable Energy Portfolio Standard – RPS Class II – 225 CMR 15.00||RPS Class II|
Per guidance from the Massachusetts Department of Public Utilities (DPU), retail electricity suppliers are considered 100% renewable if the voluntary renewable energy certificates (RECs) provided are above and beyond the mandatory renewable percentage. The DPU has stated the mandatory minimum renewable percentage for 2023 is 59%, thus CLC is retiring voluntary RECs for the remaining 41%. As illustrated in the pie charts above, the Clean Peak Standard (CPS) is not included in that mandatory minimum renewable percentage. The Compact is exempt from complying with the CPS in 2023 as a result of language in the regulation stating that contracts signed after January 1, 2020 must comply. The Compact’s current contract was signed before that date. The Compact will comply with the CPS in 2024.