More Work to Do on Major Mass. Climate Bill as Baker Makes ‘Major Rewrite'

The legislative to-do list for the final days of formal sessions grew longer and wonkier Friday afternoon when Gov. Charlie Baker sent a wide-ranging clean energy and climate bill back to Massachusetts lawmakers with a string of proposed changes.

Baker and his deputies said they support goals in the bill (H 5060), which seeks to accelerate a transition to renewable energy sources and help Massachusetts achieve its target of net-zero emissions by 2050, but remain concerned about the feasibility of some sections and want to use one-time federal dollars to supercharge the effort.

In an interview outlining the amendment, Energy and Environmental Affairs Secretary Beth Card said the base bill lawmakers approved features several sections "we believe would be challenging to implement and not the most efficient way to help us achieve our emission-reduction goals."

Baker in his amendment letter made that point more firmly, saying some provisions would be "difficult or impossible to implement" while others "do not reflect the best policy choices for the Commonwealth as we strive to meet our shared, ambitious goals."

"I hope you can tell from what I'm describing there that the administration really does believe that this legislation has enormous potential to fund critical, urgent priorities in cities and towns throughout the commonwealth, and we look forward very much to working with the Legislature to craft a final piece of legislation that the governor will be pleased to sign," Card said.

Legislative negotiators spent two months crafting the bill, which ranges from overhauling the offshore wind procurement process to greening the transportation and building sectors, after the House and Senate initially approved divergent measures.

They sent Baker the final version last week with little time remaining for them to take follow-up action based on his feedback -- a challenge the governor noted in his message to lawmakers.

"Our administration originally filed clean energy legislation in October 2021 to advance these goals, and it is unfortunate that the legislature did not pass legislation on this topic until the final days of the formal legislative session, leaving a small window of time in which to reach a compromise with the administration," Baker wrote. "However, I am returning this bill in a timely manner in hopes of reaching a successful compromise with the legislature soon to produce a final piece of legislation that I will be able to sign."

Baker had until Sunday to act on the bill, but opted to return it late Friday, and his filing opens up an opportunity for legislative leaders and the governor to potentially strike a deal this weekend.

Baker's proposed changes stretch more than a dozen pages long, targeting sections of the bill dealing with how Massachusetts selects new projects for its nascent offshore wind sector, the transition to an all-electric vehicle transportation system, municipal limits on fossil fuel use in buildings, and energy efficiency programs.

At the top of the list is a significant change in the financial impact of a bill that largely focused on policy and not direct spending. Baker proposed packing the climate bill with $750 million in American Rescue Plan Act funds to bolster investments in clean energy, including $300 million for the Massachusetts Clean Energy Center.

Card said the urgency behind a push to put ARPA dollars to work in the climate bill is twofold.

"One, we have climate challenges today, and we need to continue to make investments to continue to deal with climate change in a variety of ways, including looking at how we work toward decarbonization," she said. "The second is these ARPA dollars have a clock. We don't have an endless amount of time by which to spend them, and we've identified a key priority here. Spending them today is important -- otherwise, we stand the chance of losing them. We don't want to miss this once-in-a-lifetime opportunity to make those investments."

Lawmakers have about $2.3 billion in unspent ARPA funds, which must be obligated by the end of 2024, though an economic development bill that remains tied up in conference committee negotiations would use a large chunk.

Other sections of Baker's amendment would tweak some of the changes lawmakers sought to the offshore wind procurement process and, according to Card, eliminate the price cap that requires each new project to offer power at a lower cost than its predecessor.

The Legislature's bill would have allowed the price cap to come into play only if fewer than three bids come in for an offshore wind solicitation, and it would take inflation and other economic factors into account when applying the cap to solicitations that result in two or fewer bids.

"We think that could slow down the process at a time that we need to accelerate our procurements, and furthermore, it would be an ambiguous process for bidders," said Department of Energy Resources Commissioner Patrick Woodcock.

Baker also proposed changing the program lawmakers outlined that would allow 10 cities and towns to restrict or ban the use of fossil fuels in new construction or major building renovations. Lawmakers originally crafted that provision, opposed by home and commercial heating oil industry leaders, after the Baker administration's stretch energy code did not authorize municipal requirements for builders to use all-electric heating.

The amendment would allow that "demonstration program," as lawmakers dubbed it, to take effect only when the electrical grid reaches a certain clean energy capacity. Baker's proposal additionally calls for new regulations to ensure uniform implementation across participating cities and towns.

Card said the amendment would be "more consistent with our ability to implement some of our other key administration goals."

"We wanted to be sure that we don't do anything that is to the detriment of our housing goals," she said. "We have a real need for increased housing, so we included a carve-out for certain building types including multi-family housing."

Lawmakers have a lot of work ahead to process Baker's changes and decide how to respond, all while legislative leaders are trying to wrap up many other priorities they have left for another frantic end-of-July stretch.

Rep. Jeff Roy, the lead House negotiator on the clean energy bill, told the News Service shortly after Baker's amendment landed he "can sense it'll be a long night."

"We are taking a very close look at every page of the amendment," Roy said. "We remain confident that we will finalize the bill in this session."

His Senate counterpart, Sen. Mike Barrett, was a little less optimistic.

"This looks to be a major rewrite," Barrett texted a News Service reporter. "Hard to know what the two legislative branches will manage to agree on, in the time we have left."

"This has already been a tough negotiation," Barrett added.

Ben Hellerstein, state director for Environmental Massachusetts, called on lawmakers and Baker to make quick work of a compromise.

"Having just lived through record-breaking heat -- with another such heatwave projected for next week -- we can see the dangers that global warming poses to the people of Massachusetts, which will only get worse without our best efforts to slow it down," Hellerstein said in a statement. "All eyes are on Beacon Hill to get this done by the July 31 deadline. The governor and the Legislature should do whatever is necessary to pass a strong climate bill, so that all of us can look forward to a healthier, safer, and cooler future."

In the final days of the 2020-2021 lawmaking session, the Legislature sent Baker a major climate roadmap bill setting a net-zero emissions target for 2050. With no time left on the legislative calendar to negotiate over amendments, Baker vetoed the bill, prompting lawmakers to revive it at the start of the current two-year session.

That time around, the governor sent back changes, and the Legislature adopted enough to get both sides on board with a final measure he signed in March 2021.

It's not clear if Baker would take a similar approach on the clean energy bill, particularly as he prepares to leave office in January. Card said she had "no commentary on where we would and would not give," describing herself as hopeful for productive talks with lawmakers.

"We'd really like to get to a place of yes in this session, and we think that's very possible. That being said, we're obviously willing to engage with the Legislature in a way that gets the best law," Card said. "We'll see what happens over the next couple of days. We're optimistic that we can engage in a productive and meaningful way to get where we need to be and see where that leaves us at the end of the weekend."

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