MassDEP delays implementation of Clean Heat Standard to 2028

The Massachusetts Department of Environmental Protection (MassDEP) has pushed back the start date of the new Clean Heat Standard (CHS) – a regulatory scheme that increases costs for natural gas, propane and oil providers to support state climate goals – back two years to 2028.

As part of the state’s NetZero by 2050 mandate, the Clean Heat Standard was originally supposed to take effect at the beginning of 2026. The DEP’s delay pushes implementation of the new policy until Jan. 1, 2028, notably after the upcoming statewide elections as soaring energy prices due to state climate mandates have become a political liability in Massachusetts.

“Governor Healey is focused on lowering energy costs. That’s why we went straight to the public to get their thoughts on the implementation of the Clean Heat Standard. We heard a clear desire to take additional time to implement these changes, let the market develop, and keep costs down,” said Healey spokesperson Karissa Hand when asked about the delay and if the governor is concerned about the political fallout from the policy. .

Executive Director of the Massachusetts Fiscal Alliance Paul Craney said the timing of the two-year delay and the new date for implementation of the policy is convenient for state lawmakers trying to dodge the political liability of soaring energy costs, especially for Healey, who would be in the middle of the first full winter of her second term when the policy take effect.

“I think there’s some political liability on this issue when you’re telling people who heat their homes with natural gas, oil or propane, that all of a sudden their bills are going to be going up. Governor Healey doesn’t want to deal with more headaches from upset ratepayers,” said Craney. “It’s not going away and I think Governor Healey should talk about it. I think she should defend her decision to want to implement this in her second term. The public should be aware of this before they go to vote,”

Established by an executive order signed by former Gov. Charlie Baker, the Clean Heat Standard requires suppliers of natural gas, oil and propane to provide an increasing quota of “clean heat” services like heat pumps, weatherization or other state-verified low-carbon options, or purchase credits from companies providing these heating services.

“These obligated parties would be required to serve Massachusetts’ residential and commercial customers with gradually increasing percentages of clean heat services so that sales of fossil fuels are phased down,” reads a 2022 summary of the standard in the Massachusetts Clean Energy and Climate Plan for 2025 and 2030. “Massachusetts has benchmarks for emissions reductions in 2025 and 2030, but it will be necessary to set annual reduction goals to ensure continuous improvement and to appropriately pace the work required to transform heating fuels and systems.”

On December 23, MassDEP sent a letter to stakeholders in the thermal industry informing them of the two-year delay, citing a “current focus on stakeholder input and program design.” In the letter, MassDEP attributed the delay to the need to “evaluate new fuel and emissions data, analyze affordability trends, monitor heat pump adoption, and collect additional information.”

“A number of state agencies, including MassDEP, are working to ensure there is a robust market for affordable clean heat in Massachusetts, despite changing federal tax incentives. To allow sufficient time for those initiatives to take effect, and to inform development of a Clean Heat Standard tailored to the needs of Massachusetts residents, MassDEP now plans to phase-in this standard no earlier than 2028,” MassDEP’s letter reads.

But MassDEP has already been collecting sales and emissions data from stakeholders. When asked by the Herald how much the new policy is expected to cost Massachusetts ratepayers compared to traditional oil, propane and natural gas, MassDEP Communications Director Lauren Moreschi referred to the state website and the December letter to stakeholders.

A study of the policy by consultant group Diversified Energy Specialists found that Massachusetts ratepayers reluctant to make the switch to cleaner heating sources could see themselves priced out of the traditional heating market, saying that individual bills could increase as much as $425 annually.

“While the CHS does not require homeowners to make clean heat choices, consumers will incur incremental costs as fuel providers increase the share of clean heat they provide. Analysis suggests that the average customer will see an increase of $255-$425 annually to heat their home, depending on whether they use propane or oil. This cost pressure will likely accelerate customer attrition as consumers seek alternatives,” said the study.

Along with ratepayers, heating fuel providers could also suffer from the consequences of the Clean Heat Standard. The study by Diversified Energy Specialists predicts that smaller fuel dealers will be negatively affected by the policy more than larger companies. Additionally, the group found companies that install heat pumps will be hurt significantly less than those that don’t.

“On one hand it’s good that ratepayers are getting a delay in dealing with this, even though it should be repealed, ” said Craney. “On the other hand I find it bad that this delay has been done quietly. Now people don’t know what’s in store for them.”