Massachusetts recently stepped closer to its first major
solicitation for long-term energy storage contracts under its new
Section 83E authority. On May 5, the MA Department of Energy
Resources (DOER), in partnership with the state's electric
distribution companies (EDCs), jointly filed a draft Request for Proposals
(RFP) to the MA Department of Public Utilities (DPU) for
the procurement of environmental attributes associated with
approximately 1,500 MW of mid-duration energy storage systems.
Mid-duration energy storage refers to systems capable of
dispatching energy at full capacity between four and ten hours. In
this post, we detail the joint filing made by DOER and the EDCs,
discuss substantive provisions of the draft RFP, and highlight
major takeaways from an Independent Evaluator analysis of the draft
RFP.
Late last week, the DPU issued a Notice of Filing and Request for Comment that
invites comments on the draft RFP by May 30 and reply comments by
June 6. The comment process provides stakeholders with an
opportunity to shape the forthcoming procurement.
Background and Purpose of the
Filing
This RFP aims to procure environmental attributes associated with
approximately 1,500 MW of mid-duration energy storage systems. This
is the first of at least four planned solicitations, with the
ultimate goal of securing 5,000 MW of energy storage capacity by
July 31, 2030, as mandated by the 2024 Act Promoting a Clean Energy Grid, Advancing
Equity, and Protecting Ratepayers.
The joint filing outlines a staggered procurement schedule,
consistent with statutory requirements:
- 1,500 MW of mid-duration storage (environmental attributes) by July 31, 2025 (the subject of this RFP);
- 1,000 MW by July 31, 2026;
- 1,000 MW by July 31, 2027;
- The remaining capacity by July 31, 2030.
Key Provisions and Structure of the Draft
RFP
The draft RFP sets forth the rules, requirements, and evaluation
criteria for bidders seeking to participate in this landmark
procurement. Below are some substantive highlights.
1. Eligibility and Bid Requirements
- Eligible Projects: Only transmission-connected mid-duration energy storage systems are eligible in this first round. Projects must be between 40 MW and 1,000 MW in size. Projects must commence commercial operation by January 1, 2030.
- Contract Term: Up to 30 years, but bids for Clean Peak Energy Certificates (CPECs) are encouraged to propose terms up to 20 years, as the Clean Peak Standard program is scheduled to end in 2050.
- Interconnection: Projects must interconnect at the ISO-NE Pool Transmission Facilities at a level equivalent to the Capacity Capability Interconnection Standard (CCIS). Detailed interconnection studies and cost estimates are required.
- Bid Fee: A non-refundable fee of $500 per MW of project capacity is required to offset evaluation and oversight costs.
2. Evaluation Process
The RFP outlines a three-stage evaluation process:
- Stage One: Screening for eligibility and threshold requirements, including project maturity, technical and financial viability, site control, and demonstration of how the contract will facilitate project financing. Notably, the DOER and EDCs have not taken a position on whether or how existing storage facilities must demonstrate that a contract would "facilitate financing," and have asked the DPU to resolve this question.
- Stage Two: Quantitative and Qualitative Analysis: Proposals are scored on a 100-point scale, with 80 points allocated to quantitative factors (primarily cost to ratepayers and economic/environmental benefits) and 20 points to qualitative factors (such as benefits to environmental justice communities, economic development, project viability, and safety).
- Stage Three: The Evaluation Team, including DOER, the EDCs, the Executive Office of Economic Development, and the Independent Evaluator, conducts a holistic review of top-ranked proposals, considering portfolio effects, grid resiliency, policy alignment, and risk minimization. The Evaluation Team may select any cost-effective portfolio of projects or none.
3. Additional Process
- Independent Evaluator: The Independent Evaluator is tasked with monitoring the process, ensuring that it is open, fair, and not unduly influenced by any EDC-affiliated company. The Independent Evaluator has already issued an initial report supporting the RFP, described below.
- Public Process: The RFP and all non-confidential bid materials are posted publicly, and a bidders' conference and Q&A process are built in to maximize stakeholder engagement.
4. Contracting and Regulatory Approval
- Negotiation: Selected bidders will negotiate long-term contracts with the EDCs. Selected bids must post a security of $40,000 multiplied by the Contract Maximum Amount in MW for the project. Selected bidders will also be required to enter an MOU with DOER to memorialize commitments to EJ and low-income ratepayers.
- Regulatory Review: The EDCs will negotiate contracts (monitored by DOER) and will seek approval from the DPU of executed contracts. The DPU must act within six months of contract submission.
- FERC Compliance: For rates under federal jurisdiction, FERC approval is also required.
5. Economic, Social, and Environmental Commitments
- Economic Development: Bidders must detail job creation, workforce diversity, and economic benefits, especially for environmental justice and transitioning fossil fuel communities.
- Diversity, Equity, and Inclusion: A robust diversity, equity, and inclusion plan is mandatory, with annual reporting on progress. Section 83E requires that projects include opportunities for diversity, equity and inclusion, including, at a minimum, a workforce diversity plan and a supplier diversity program plan.
- Safety and Community Engagement: Comprehensive safety plans and evidence of community engagement are required, with preference given to projects demonstrating strong local support.
6. Schedule and Milestones
DOER and the EDCs proposed the following timeline, which may need
to be adjusted based on when the DPU issues an Order:
- RFP Issuance: July 31, 2025
- Bidders' Conference: August 14, 2025
- Proposal Submission Deadline: September 10, 2025
- Project Selection/Negotiations: December 9, 2025
- Contract Execution: March 27, 2026
- DPU Approval Submission: April 24, 2026
Independent Evaluator's Report
Subsequent to the joint filing, the Independent Evaluator filed a report on
the proposed timetable, method of solicitation, and solicitation
process as contemplated by the draft RFP. That report, prepared by
Power Advisory LLC, supports the procurement target, bid size
range, and schedule, stating that the process is likely to attract
strong competition and deliver cost-effective results for
ratepayers. The report also highlights areas for potential
improvement, such as providing more explicit point allocations for
qualitative evaluation criteria and considering a more balanced
allocation of certain project risks in future procurements. The
report recommends that future RFPs allow more time for stakeholder
input, consider the inclusion of distribution-connected projects,
and explore regional collaboration with other states to maximize
benefits and reduce costs. Overall, the report provides that the
Independent Evaluator finds the draft RFP and its associated
long-term contract terms to be reasonable and well-balanced.
How to Submit Comments
DPU's Notice of Filing and Request for Comment
establishes a comment submission deadline of May 30 and a reply
comment submission deadline of June 6. The Notice establishes
specific requirements relating to comment submission and docket
service.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
