## THE 

# COMMONWEALTH OF MASSACHUSETTS

EXECUTIVE OFFICE OF ENERGY



### & ENVIRONMENTAL AFFAIRS 

### 100 CAMBRIDGE STREET SUITE 

### 900 BOSTON, MA 

### 02114 (617) 626·1 000 www.mass.gov/eoeea en2, OFFICE OF THE ATTORNEY GEN ONE ASHBURTON PLACE

BOSTON, MA 

### 02108 (617) 727-2200 www.mass.gov/ag



### October 1, 2009

BY OVERNIGHT DELIVERY - UNITED PARCEL SERVICE 

### Ms. Catherine Zoi Assistant Secretary for Energy Efficiency and Renewable Energy United States Department ofEnergy Section 327 Petitions Appliance Efficiency Standards Forrestal Building 1000 Independence Avenue, SW Washington, D.C. 20585 Re: Petition for Waiver ofFederal Preemption Pursuant to §327(d), 42 U.S.C. § 6297(d), 

### ofthe Energy Policy and Conservation Act ("EPCA"). 

### DearAssistant Secretary Zoi: Pursuant to 42 U.S.C. § 6297(d), 10 C.F.R. §§ 430.40

- 430.49, and Massachusetts General Laws c. 25B, §§ 

### 5 and 9, the Massachusetts Department of Energy Resources (aDepartment ofthe Massachusetts Executive Office ofEnergy & Environmental Affairs) and the Massachusetts Office ofAttorney General Martha Coakleyjointly andrespectfully submit for filing and considerationby the United States Department ofEnergy an original and three copies ofthe following document: Petition ofthe Commonwealth ofMassachusetts to Exempt from Federal Preemption Massachusetts' 90% Annual Fuel Utilization Efficiency Standard for Non-weatherized Gas Furnaces, dated October 1,2009, with includedExhibits A through E.The Commonwealthmaintains that it comfortably meets the legal standard for the granting ofa waiverthat is set forth in § 327(d) ofEPCA. As demonstrated in the Petition, the Commonwealth's 90% AFUE standard is needed to meet unusual and compelling state interests that cannot be met in any other feasible manner using alternative, non-regulatory approaches, which the Commonwealth has already aggressively tried to utilize. The costs and implementation times ofsuch alternatives, even were they able to meetthe Commonwealth's needs, would be much greaterthanthe costs and implementationtimes ofthe newregulatory standard, and are therefore far inferiorto it. Further, the Commonwealth has shownthat the proposed 90% AFUE standard will not significantly burden manufacturing, marketing, distribution, sales, or servicing ofthe type ofgas furnaces thatthe new standard covers, because high efficiency furnaces are already manufactured and marketed into Massachusetts and the region in high numbers. For all these reasons, the United States Department ofEnergy should grant the Commonwealth's Petition and prescribe the requested waiverrule. Thankyou for your assistance. Sincerely,

# e~ommiSSione""'r-~ Massachusetts Department of Energy Resources

cc: Representative Edward J. Markey Energy & Commerce Committee U.S. House ofRepresentatives Attorney General Martha Coakley

# ITNITED STATES DEPARTMENT OF ENERGY

PETITION OF THE COMMONWEALTH OF MASSACHUSETTS TO EXEMPT FROM FEDERAL PREEMPTION MASSACHUSETTS' 90% ANNUAL FUEL UTILIZATION EFFICIENCY STANDARD FORNONWEATHERIZED GAS FURNACES

Submittedby: 

### The Commonwealth ofMassachusetts, acting by 

### and through the Massachusetts Department ofEnergy Resources, a Departmentofthe

Massachusetts Executive Office ofEnergy & Environmental Affairs and 

### Massachusetts Attorney General Martha Coakley

October 1, 2009

## Table ofContents Page 

### 1. Introduction and Overview ofthe Petition 1 A. Nature ofthe Petition and Relevant State Law .1 B. Summary ofthe Commonwealth's "Unusual and Compelling" Interests That Warrant the Granting ofthe Petition 3 C. Granting the WaiverWill Provide Substantial Benefits to Massachusetts 5 D. Implementation ofthe 90% AFUE Standard is FarPreferable to Alternative Approaches, Almost All ofWhich Massachusetts Has AlreadyTried 

### 5 E. The Commonwealth's Waiver Request Seeks to Tighten DOE's Recently Promulgated Furnace Standard 6 II. The Legal Standard for Obtaining a Waiver 7 A. The Federal Statute and Regulations 

### 7 B. DOE Has Provided Guidance for States That Seek Waivers ofPreemption 10 1. The October 6, 2006 NOPR Guidance 10 2. Comments to the November 2007 Final Rule 13 III. Massachusetts Has Met the Requirements for Its WaiverPetition to Be Granted 14 A. Massachusetts Has Shown By a Preponderance ofthe Evidence That It Has Unusual And Compelling Interests in Having the Waiver Granted 14 1. Massachusetts Has Far More HDDs Than the National Average 15 2. Massachusetts Has Higher Gas Rates Than the Country As a Whole 16

- 1 -Page



### 3. Massachusetts Residential Heating Loads Compete

### with Power Plant Loads 17 4. 

### The High Percentage ofRental Housing Creates Market Barriers 18 

### 5. Massachusetts Has aUnique Set ofStatutes and Policies Promoting Increased Energy Efficiency and Reductions in Greenhouse Gas Emissions 21 B. The Costs) Benefits, Burdens and Reliability ofthe Savings from State Regulation are Preferable to the Costs and Benefits ofAlternative Approaches to Increasing the Penetration ofHigh Efficiency Furnaces 24 C. The Proposed State RegulationWill Not SignificantlyBurden Manufacturing, Marketing, Distribution, or Sale or Servicing ofFurnaces 28 IV. Conclusion 31

- 11 -

## List ofTables Table 1 - 150% Poverty Status in New England Households by Housing Tenure .20 Table 2 - Age ofHeating Equipment in New England Households by Housing Tenure 20 Table 3 - Age ofheating equipmentin New England Households by 1500/0 Poverty Status

.....21



## Attachments A. Statute and Regulations

- M.G.L. c. 25B, §§ 1 - 10, and 225 C.M.R. 9.01

- 9.06 (including the HState standard for which arule exempting such standard is sought," M.G.L. c. 25B, § 5(3), and 225 C.M.R. 9.03(10)). B. The Commonwealth ofMassachusetts' EnergyPlan, dated September30, 2009. C. The Commonwealth's Energy Forecast, dated September30,2009. D. Report and Analysis in Support ofthe Commonwealth ofMassachusetts' Petition to Exempt from Federal PreemptionMassachusetts' 90% Annual Fuel Utilization Efficiency Standard for Non-Weatherized Gas Furnaces, II preparedby Tom Franks & AlekAntczak ofOptimal Energy Inc., dated September 30,2009. E. Alternatives and Economic Analysis in Support ofthe Commonwealth ofMassachusetts' Petitionto Exempt from Federal PreemptionMassachusetts' 90% Annual Fuel Utilization Efficiency Standard for Non-Weatherized Gas Furnaces," preparedbyVivek Mohta and Vivek Sakhrani ofthe Massachusetts Department ofEnergy Resources, dated September 30,2009.

- iii -

### I. INTRODUCTION AND OVERVIEW OF PETITION. A. Nature ofthe Petition and Relevant State Law. The Commonwealth ofMassachusetts ("Commonwealth" or "Massachusetts"), through its Department ofEnergy Resources ("DOER") and the Office ofMassachusetts Attorney General Martha Coakley, herebypetitions the United States Department ofEnergy ("DOE") to approve a waiver offederal preemption under 

### § 327(d) ofthe EnergyPolicy and Conservation Act ("EPCA"), 42 U.S.C. § 6297(d), so as to allow the Commonwealth to implementthe 90% Annual Fuel Utilization Efficiency ("AFUE") standard for residential furnaces adopted by the Massachusetts Legislature in § 11 ofChapter 139 ofthe Acts of2005, entitled "An Act Establishing Minimum Energy-Efficiency Standards for Certain Products," which is now codified at Massachusetts General Laws ("M.G.L. It) c. 25B, §5. Furnaces are a "coveredproduct" underfederal law (42 U.S.C. §§ 6291(2), 6292(a)(5» for which DOE is explicitly authorized to set energy efficiency standards, and DOE most recently set a standard of80% AFUE for "non-weatherized gas furnaces" ("NWGF,,)l in a final rule published November 19,2007.2 Because DOE-set standards generally preempt states from implementing their own standards, the Commonwealthis precluded from instituting its 90% AFUE standard without obtaining a waiver from DOE pursuant to 42 U.S.C. 

### § 6297(d).

1 A weatherized furnace is one "designed for installation outdoors, approved forresistance to wind, rain and snow, and supplied with its own venting system." 10 C.F.R. § 430.2. Conversely, anon-weatherized furnace is the far more typical system that is located inside the dwelling space (including in the basement or ancillary structure) and therefore need notbe weatherized against the elements. 2 72 Fed. Reg. 65136, 65137 (Nov. 19,2007). Various parties petitioned forreview ofthis rule in the United States CourtofAppeals for the Second Circuit) in State of New Yorketal. v. DepartmentafEnergy etal., #08-311- ag(L), 08-312-ag(con) (petitions filed Jan. 17,2008). Under orderofthe Courtdated April 21, 2009, the rule was voluntarilyremanded to DOE for furthernotice and commentmlemaking. 1 -

### Pursuantto M.G.L. c. 25B, §5, DOERis in 

### factrequired to seek such a waiverfrom DOE. 

### See also 225 Code ofMassachusetts Regulations (ltC.M.R.") 9.04(5). Previously revised in 1989, the Massachusetts Legislature amendedM.G.L. c. 25B, §5, in November2005 to update certain appliance efficiency standards and to include several new products and appliances within its scope to significantlyreduce energyusage in the Commonwealth. The Legislature includedhigherefficiency standards for residential furnaces because ofthe significant contribution furnaces make to overall energy consumption. Infonnationpresented to the Legislature as it considered the revision projected thatthe Commonwealth would avoid consuming onebillion cubic feet ofnatural gas annually, by the year 2020, ifthe 90% AFUE standard was implemented, and thatthe netpresentvalue ofthe economic savings to consumers could be as high as $100 million.3 

### Following its authority in M.G.L. c. 25B, §5, DOER subsequently adopted implementing regulations setting the efficiency ofresidential gas andpropane furnaces at 9q% 

### AFUE. 225 C.M.R.9.03(10). Because the Commonwealth must seek a waiver in 

### orderfor the 90% AFUE standardto go into effect, the effective date for the 90% AFUE standard is, pursuantto 225 C.M.R.9.04(5), "the earliest date pennittedby federal law." The Commonwealth's entire Petitionpacketincludes:

• this Petition;

• atechnical report entitled "Report and Analysis in Support ofthe Commonwealth ofMassachusetts' Petitionto Exempt from Federal PreemptionMassachusetts' 90% Annual Fuel Utilization Efficiency Standard forNon-Weatherized Gas Furnaces," prepared forthe Commonwealthby TomFranks 

### & AlekAntczak of Optimal Energy Inc.(the "Optimal Report");

• an analysis that addresses the costs and benefits ofalternatives to granting the

3 A recent analysis preparedby the Appliance Standards Awareness Projectestimates $144 million in netpresent value savings from the adoption of90% AFUE in Massachusetts. Analysis available at: http://www.standardsasap.orglstateI2009%20federal%20analysis/states/fedappCrna.pdf. - 2 -waiverPetition, in comparison to the costs and benefits ofthe Petitionbeing granted, as required by42 U.S.C. § 6297(d)(91)(C)(ii), entitled "Alternatives and Economic Analysis in Support ofthe Commonwealth ofMassachusetts' Petition to Exempt from Federal Preemption Massachusetts' 90% Annual Fuel Utilization Efficiency Standard for Non-Weatherized Gas Furnaces," prepared for the Commonwealthby DOER's Vivek Mohta and Vivek Sakhrani (hereinafter, the "Alternatives Analysis");

• the Commonwealth's Energy Plan and forecast; and

• the Commonwealth's furnace efficiencyregulation for which the DOE waiveris sought, 225 C.M.R. 9.03(10).4 The Optimal Report, Alternatives Analysis, Energy Plan and forecast are fully incorporated into this Petition. B. 

### Summary ofthe Commonwealth's "Unusual and Compelling" Interests That Warrantthe Granting ofthe Petition. Under42 U.S.C. 

### § 6297(d)(1)(B), Massachusetts must establish thatits 90% AFUE standard "is needed to meetunusual and compelling state ...**interests.'~** As is demonstrated

more fully below, in § III. A., Massachusetts has several unusual and compelling interests that merit DOE approving this waiverPetition. First, residential heating consumers in the Commonwealth are burdenedby some ofthe highest energyprices in the country, more than twice as high as some ofthe lowest-cost states,S and well above the national average.6 Second, those same customers need to consume far more natural gas to operatetheir furnaces than

4 Additionally, withinthe Petition are references to various documents located on the World Wide Web. Should DOE require any ofthese web-cited documents in hard copy, the Commonwealth will gladlyprovide them. 5 In 2008, residential natural gasprices averaged $17.11 perthousand cubic feet ("mcf') inMassachusetts, according to the Energy Information Administrations listing of"Natural Gas Prices" by area (available at: http://tonto.eia.doe.gov/dnav/ng/ngprisumaEPGOPRSDMcfa.htm). Forcomparison, during 2008, there were 13 states where average residential gas prices were under $13 permcf; in Colorado the average price was even lower, $9.76 permef. 6 The Optimal Report, Figure 2, shows thatMassachusetts residential natural gas prices have been 20% to 30% above the national average since the year 2000. - 3 -customers in many other states, as the number ofheating degree days ("HDDs") in Massachusetts generally exceeds 6000. 

### In most winters, HDDs 

### in Massachusetts exceed the national average by approximately 50%.7 The combination ofhigh gas prices and cold winters provides Massachusetts with an unusual and compelling interest in increasing the efficiency of residential furnaces because ofhow expensive it is to keep a home wann. 8 Third, Massachusetts experiences unusual and compelling concerns around consumption ofnatural gas by residential furnaces because residential heating loads and natural gas-fired electric generation loads compete for relatively scarce supplies ofnatural gas in the region. 9 Policymakers 

### in New England have voiced concerns that contracts to supplynatural gas to powerplants could be interrupted during the winterifresidential heating demand too severely strains supplies. Massachusetts thus has an unusual and compelling interestin reducing the demand for natural gas in the residential heating sectorbecauseheating demands can place reliability ofthe electric generating system atrisk. Fourth, Massachusetts has one ofthe highestrates ofrental housing in the country, creating unusual barriers to increasing thepercentage ofhouseholds that install high-efficiency furnaces.

### to Fifth, Massachusetts has unusual and compelling legal interests in increasing the

7 Optimal Report, Figure 1. Note thatthe Commonwealthhas carefully checked the underlying HDD data from such public sources as the National Oceanic and Atmospheric Administration, and concludes that DOEmade a typographical orcalculation errorin stating: "Nationwide, the U.S. averages 5528 HDDs." Notice ofProposed Rulemaking, 71 Fed. Reg. 59209, n. 7 (Oct. 6,2006). Regardless ofthe year one could choose, the U.S. average is generallyin the range between4000 and 4500 HDDs, and Massachusetts' HDDs are generally40% to 50% higher than the U.S. average in any year. gThe Optimal Report (Figures 4, 5 and 6) highlights the heavy burden low-incomehouseholds, inparticular, face in keeping wann. 9 Optimal Report, Section II.D., at 7. See also ISO- New England, "CIGRE 2008 Case Study: Electric andNatural Gas MarketInterdependencies Within New England" (September 1,2008), available at: http://www.isone.com/pubs/spcl mts/2008/fmal isone cigre case study 090108.pdf. As this study notes (Id. p. 8), "There is no natural gas production ofunderground storage in New England," unlike much ofthe rest ofthe country, thus creating a relative scarcity ofsupply. Moreover, "gas-firedpeaking generation" inNewEngland "can also experience fuel related problems, exacerbated during winter**conditions~** because that gas-fIred generation is sometimes 'treated as secondary onthe prioritylist with respect to fuel deliveryneeds." ld., p. 2I. 10 Optimal Report, at 8 & Figure 8.



### - 4-efficiency ofheating furnaces, not onlybecause its legislature has adopted a 90% AFUE standard for those furnaces in M.G.L. c. 25B, §5, as amended, but also because reducing the consumption ofnatural gas in furnaces meets the requirements ofother state laws, including the Global Wanning Solutions Act1l and Green Communities 

### ACt. 12 

## c. Granting the Waiver Will Provide SubstantialBenefits to Massachusetts. The 90% AFUE standard that Massachusetts seeks to implement will provide very substantial benefits to the Commonwealth ofMassachusetts. Estimates ofthe NetPresentValue savings to Massachusetts consumers range from $77 million13 to arecently-revised estimate of $144 million. 14 In addition, adoption ofthe 90% AFUE standard is projected to avoid consumption of19 million thenns ofnatural gas by 2030. 15 DOE's own economic analysis found that the 90% AFUE standard is technically feasible as well as economically-justified in states with more than 5,000 HDDs, and the Commonwealth's consultant, Optimal Energy, similarly concluded that implementing a 900/0 standard in Massachusetts provides significant net benefits. 16 

### D. Implementation ofthe 90% AFUE Standardis Far Preferable to Alternative Approaches, AlmostAll ofWhich Massachusetts Has Already Tried. Under42 U.S.C. 

### § 6297(d)(1)(C), Massachusetts must demonstrate that the "costs, benefits, burdens and reliability ofenergy ... savings resulting from the Stateregulation [e.g., the 900/0 AFUE standard] make suchregulation preferable ornecessary when measured against

11 2008 Mass. Acts. Ch. 298 12 2008 Mass. Acts, Ch. 169. 13 "State-by-State Savings from New Furnace and Boiler Standards," available at: http://www.standardsasap.org/documents/statefurnaceboiler.htm. 14 See Appliance Standards Awareness Project analysis at http://www.standardsasap.org/stateJ2009%20federal%20analysis/statesIfedappl_ma.pdf. 15 See Appliance Standards Awareness Projectanalysis at http://www.standardsasap.org/stateI2009%20federal%20analysis/states/fedappl_ma.pdf. 16 Optimal Report, Section III.C.2, at 21. - 5 -the costs, benefits, burdens andreliability ofalternative approaches to energy ... savings

...." The Commonwealth includes with this Petition the Alternatives Analysis prepared by its staff that so demonstrates and discusses this point at greaterlengthbelow. Moreover, and as also discussed more fully below, implementing the 90% AFUE standardis fully consistentwith the state's Energy Plan and**forecast~** whichhas also been submitted with this Petition. 

### E. The Commonwealth's Waiver Request Seeks to Tighten DOE's Recently Promulgated Furnace Standard. On October 6,2006, DOE issued aNotice ofProposed Rulemaking ("NOPR") for residential furnace and boilerefficiency standards. 71 Fed. Reg. 59204. Among many other issues addressed in the NOPR, DOE responded to "numerous comments regardingthe setting of separate furnace and boiler standards for differentregions ofthe country." 71 Fed. Reg. 59209. While DOE concludedthat it did not at thattimehave the authority to "setregional energy conservation standards," it did stress that "EPCA allows states to seek from the Department a waiverofFederal preemption ofstate or local energy conservation standards." 

### ld.; 42 U.S.C. § 6297(d). DOE then discussed atlength the types ofevidence that mightbe relevantto any such waiverpetition and some ofthe factors thatDOE would considerin evaluating a waiverpetition. 

### ld., at 59209

- 59210. On November 19,2007, DOE issued a final rule on residential furnace and boiler efficiency standards, setting 80% as the standard for NWGFs. 17 72 Fed. Reg. 65136

- 65137.

17 It is worthnoting here that numerous parties (including the State ofNew York and several other governmental entities, and, separately, the Natural Resources Defense Council) soughtreview ofthe November 19,2007 final rule throughpetitions filed in the Second Circuit Court ofAppeals onJanuary 17,2008. State of New Yorketal. v. Departmentof Energy etal., docket 08-311-ag(L), 08-312-ag(con). On April 21, 2009, the Court granted the motion ofDOE for a voluntary remand ofthe furnace andboilerrule "forfurther notice and commentrulemaking proceedings leading to a revised fmal rule." Massachusetts still must seeka waiverofpreemptionto implementits 90% AFUE standard, as there is a pre-existing federal efficiency standard for furnaces and boilers, 10 C.F.R. § 430.32(e). Moreover, there is no question that a state can seek a waiver and enforceits own furnace standard even thoughDOE now clearly has the authorityto adopt regional standards. 42 U.S.C. § 6295(o)(6)(F)(iv).



### - 6-DOE again addressed "numerous comments advocating the adoption ofseparate standards for northern and southernregions," including, 

### interalia, comments from the City ofBoston and the Belmont [Massachusetts] Housing Trust. 72 Fed. Reg. 65150. DOE once again concluded that it did nothave the authority to setregional standards. IS DOE also reiterated that "States can apply for waivers from federal preemption" and referred backto the October 6, 2006 NOPR, in which it "discussed the necessary conditions in order for it to grant States a waiver from Federal preemption." 72 Fed. Reg. 65151. In these comments to the final rule, DOE also provided some additional guidance and clarifications regarding the waiverprocess. 72 Fed. Reg. 65152. Consistentwith the comments to the NOPR and the final rule regarding waiveroffederal preemption, Massachusetts now seeks a waiverunder42 U.S.C. 

### § 6297(d) and 10 C.F.R. §§ 430.40

- 430.49 so thatitmayimplement the 90% furnace standard currently set forth in M.G.L.

c. 25B, §5, and 225 C.M.R. 9.03(10).



### II. THE LEGAL STANDARD FOR OBTAININGA WAIVER. A. The Federal Statute and Regulations. Section 327(d)(1)(A) ofEPCA provides that: Any state ... with a state regulation whichprovides for any energy conservation standard orotherrequirement with respectto energyuse, energy efficiency orwater use for any type (or class) ofcoveredproduct for which there is a Federal energy conservation standard

... may file apetition with the Secretary [ofDOE] requesting a rule that such Stateregulation become effective with respect to such coveredproduct. 42 U.S.C. 

### § 6297(d)(1)(A). The Commonwealthhas filed this Petition in orderto obtain a ruling from DOE thatits stateregulation setting a furnace efficiency standard of900/0 may go into

18 Just after DOE detennined thatit did nothave the authority to adopt regionally-differentiated efficiency standards, the President signed into law the Energy Independence and SecurityAct, which gave DOE the authority to setregional standards for furnaces, central air conditioners, andheatpumps. Pub. L. 110-140, § 306, codified at 42 U.S.C. § 6295(0)(6). - 7 -effect three years afterDOE may so rule on the Commonwealth's Petition. 19 Section 327(d)(1)(B) ofEPCA requires thatthe: Secretary shall

... prescribe suchrule if

... the state ... has establishedby a preponderance ofthe evidence that such state regulation is needed to meetunusual and compelling State orlocal energy orwaterinterests. As summarized above and discussed more fully in Section UI.A., below, Massachusetts has several**'~usual** and compelling interests" which meritDOE granting this waiverPetition. The phrase "unusual and compelling Stateinterests" is defined in 42 U.S.C. § 6297(d)(1)(C) to mean interests which: (1) are substantiallydifferentin nature ormagnitude than thoseprevailing in the United States generally; and (2) are such that the costs, benefits, burdens and reliability ofenergy orwater savings resulting from such state regulation arepreferable ornecessary when measured against the costs, benefits, burdens, and reliability ofalternative approaches to energy orwater savings orproduction, including reliance on reasonably predictable market-induced improvementin efficiency ofall products subjectto state regulation. The Commonwealth addresses the first prong ofthis definition, regarding how the interests ofMassachusetts are different in nature and magnitude from those generallyprevailing in the United States generally, in Section III.A., below. The analysis and comparisons ofcosts and benefits described in the second prong are addressed in Section III.B., below.

19 42 U.S.C. § 6297(d)(5)(A) provides, inrelevantpart: "No final rule prescribed bythe Secretaryunderthis subsection may ... pennit any State regulation to become effective withrespectto any coveredproduct manufactured within three years after such rule ispublished in the Federal Register orwithin five years ifthe Secretary finds that such additional time is necessary due to the substantial burdens ofretooling, redesign, or distribution needed to complywith the State regulation;

..." DOER's regulation at 225 C.M.R. 9.04(5) provides that if"awaiver from federal preemption is necessary forresidential furnaces orboiler standards

. . . the state standard shall go into effect at the earliest date permittedby federal law." - 8 -DOE has adopted implementingregulations at 10 C.F.R. §§ 430.40 -430.49. In accordance with 

### § 430.41 (a)(1), the Commonwealth states the following: (i) The name, address and telephone number ofthe actual Petitioner are: Philip Giudice, Commissioner Department ofEnergy Resources 100 Cambridge Street, Rm. 1020 Boston, Massachusetts 02114 (617) 626-7321 (ii) A copy ofthe "State standard for which a rule exempting such standard is sought," M.G.L. c.25B, 

### § 5(3), and 225 C.M.R. 9.03(10), is attached as ExhibitA (inclusive of M.G.L. c. 25B, §§ 1-10, and 225 C.M.R. 9.01

- 9.06). (iii) A copy ofthe Commonwealth's Energy Plan is attached as ExhibitB and its gas forecast as Exhibit C. (iv) The Commonwealth seeks arule from DOE exempting from federal preemption the 90% AFUE standard for residential gas and propane furnaces adopted in M.G.L. c. 25B, § 5, and 225 C.M.R. 9.03(10). (v) As additional support for its Petition, the Commonwealth submits:

a. the Optimal Report, Exhibit D hereto; and b. the Alternatives Analysis, Exhibit E hereto. In accordance with 

### § 430.42(c), the Petitioner states the following: that to the best ofthe Petitioner's knowledge, issues related to whethera 90% AFUE standard for NWGF should be implemented 

### in other states have been and are being consideredbyvarious state agencies, departments, orinstrumentalities. 

### In this Petition, the Commonwealth notes that the states of Rhode Island, Vermont, New Hampshire and Maryland have adopted a 90% AFUE furnace standard.



### - 9-

### B. DOE Has Provided Guidance for States That SeekWaivers ofPreemption. DOE provided additional guidance to states seeking waivers ofthe standards for furnace andboilers in comments to the October

### 6,2006 NOPR and to the final rule published on November 

### 19,2007. The Commonwealth summarizes the guidance below, as much ofit is relevant to the issues addressedin this Petition. 1. 

### The October 6,2006 NOPR Guidance. In the NOPRpublished October 6, 

### 2006, DOE noted that ithad "received numerous comments regarding the setting ofseparate furnace and boilerstandards for different regions of the country." 

### 71 Fed. Reg. 

### 59209. Several parties supported the adoption ofregional standards, believing that a higherAFUE standard in northern, colder states was bothtechnologically feasible and economically-justified. DOE did notrejectthe policy arguments made in support ofregional standards, butrather concluded "that EPCA does not authorize DOE to setregional conservation standards

.... ,,20 

### ld. Nevertheless, DOE did underscore the ability ofstates to seek "waiver offederal preemption," and provided comments on some ofthe factors it would consider in evaluating petitions to waive preemption ofany state furnace orboiler standards. First, DOE noted: [1]n the contextofresidential furnaces andboilers, where regional climatic effects can have significantimpact on whether a specified energy conservation standard wouldbe technologically feasible and economicallyjustified in thatregion, such 

### regional climatic effects will

### be importantinDOE's assessment ofwhetherthere are "unusual and compelling State or local energy interests" for State energy conservation standards. 

### States having higher-than-average, population-weighted heating degree days (BDDs) based on long-term National Oceanic and Atmospheric Administration data

20 As described in footnote 18, supra, Congress, DOE's authorityhas been expanded. Pub. L. 110-140, § 306, codified at 42 U.S.C. § 6295(0)(6).

- 10-

### would seem to have the bestprospects for demonstrating "unusual and compelling" interests to support a waiverofpreemption in the particular circumstances presented here

.... States with significantlyhigherheating requirements have significantly higher furnace use. This may indicate that, for those States, a State energy conservation standard which is higherthan the Federal standard would be cost-effective and would provide significantly more energy savings than the Federal standard. 

### ld. (emphasis added). As discussed in Section III.A.I., below, Massachusetts has documented that the average number ofHDDs in the state exceeds the national average by a substantial amount. DOE also noted thatifcontiguous states with an above-average number ofHDDs were to petition DOE for arule allowing ahigherAFUE standard to go into effect, this "would lessen the impact onmanufacturers," 71 Fed. Reg. 59210, and, presumably, make itmore likely that the waiverpetition wouldbe granted. While Massachusetts is the only state currentlypetitioning DOE for a waiverrule regarding furnaces, all ofthe other states thathave adopted standards higherthan the currentDOE-set standardhave chosen 90% AFUE as their standard. Three of those four states (Rhode Island, Vermont, and New Hampshire) are contiguous to Massachusetts. DOE also highlightedthe importance ofa state "identify[ing] the saturation ofhomes withproducts that alreadymeetthose higher standards

... [by] provid[ing] evidence that a significantpercentage ofgas furnaces soldtoday in the State already meets, for example, a 90- percent-AFUE condensing standard." 71 Fed. Reg. 59210. As discussed in Section III.C.I., below, the mostrecent data available shows that furnaces with at least 90% AFUE efficiency have comprised a majority ofthe furnace shipments to Massachusetts for the past ten years, helping to demonstrate that industry alreadyhas the ability to deliverunits atthis efficiencyto the Massachusetts marketwithoutundergoing any substantial burden. Inregard to the statutoryrequirement in 42 U.S.C. § 6297(d)(l)(C)(ii), DOE noted: A state ... also could identify any subsidies and/orincentives, such as tax rebates or

- 11 -purchase price rebates that the state or other entities are offering. To the extent States demonstrate that these programs have not worked, they may be able to show that the "costs, benefits, burdens and reliability" ofenergy savings from mandatory State energy conservationregulations make such regulations preferable to their voluntary programs. 71 Fed. Reg. 59210. 

### In the Alternatives Analysis that is attached to this Petition as Exhibit E, DOER concluded that allowing the Commonwealth to implement its 90% AFUE standard provides a much betterresult than the types ofalternative approaches listed in the above quote, because those alternatives will not succeed in terms ofsubstantially increasing the penetration of high-efficiency furnaces. Moreover, the costs ofimplementing any ofthose alternatives would be much higherthan simply allowing the state's 90% AFUE standard to be implemented. Under42 U.S.C. 

### § 6297(d)(3), the burden is on "interestedparties"

-- most likelythose who would oppose the waiverpetition

-- to show "by a preponderance ofthe evidence" that granting the waiverpetition would "significantlyburden manufacturing, marketing, distribution, sale or servicing ofthe coveredproduct on a national basis." In its guidance, DOE has suggested several categories ofinformation a state couldbring forward that would, presumably, rebut efforts by**~'interested** parties" to demonstrate the types ofburdens described in 

### § 6297(d)(3). As DOE notes, a state "would want to address the extentto which manufacturers already produce and sell products that would meet the state's proposed standard" and "how efficiencies of shipments to that state already vary from currentDOE efficiency levels." 71 Fed. Reg. 59210. As discussed more fully below in Section IILe., and in the Optimal Report, at p.13, manufacturers alreadyproduce and sell a very large number ofmodels that meet orexceed the state's 

### 900/0 AFUE standard, and those units already command a large share ofthe Massachusetts market,21 far largerthan the share ofthe national market. Optimal Report, at p. 15 & Figure 13.

21 See 71 Fed. Reg. 59210 (a state seeking a waivermight seekto demonstrate "thathigh-efficiency equipment, such as condensing furnaces, alreadyhave achieved significantmarket shares in that State. H

- 12-DOE also noted that a state "mightwish to provide evidence that demonstrates thatthere are no,

orinsignificant, differences between small and large manufacturers withrespectto producing and selling furnaces in that state," 71 Fed. Reg. 59210, which the attached Optimal Report, atp. 10, does. The Optimal Report, atp. 10, also shows that high efficiency furnaces alreadyhave all ofthe characteristics and features available in less efficient furnaces sold in the Commonwealth. Lastly, the October 6,2006 NOPR guidance addressed the issue ofwhether approval of

one state's waiverpetition "is likelyto contribute significantly to aproliferation ofState appliance efficiencyrequirements." 71 Fed. Reg. 59210. The Commonwealthhas alreadynoted that "ithas chosen identical [furnace efficiency] standard levels as other States thathave developed proposedregulations or States thathave regulations already inplace." See this Section, above. 

### 2. Comments to the November 2007 FinalRule. In comments to the final rule published November 19,2007, DOE again addressed the issues ofregional standards and the ability ofstates to seek waivers. DOE restated its priorlegal conclusion that "it does nothave the authorityunderEPCA to establishregional standards." 72 Fed. Reg. 65151. However, DOE highlightedits analytic conclusion that: the TSL [Trial Standard Level] projected to yield the maximum consumerNPV [Net PresentValue] at a seven-percent discountrate for the cold-climates (i.e. 5,000 heating degree days and 6,000 heating degree days) was the proposed TSL4 22•••• 71 Fed. Reg. 65151. DOE's own analysis thus showedthat a 90% AFUE was economic in climates (such as in Massachusetts) which have more than 5,000 HDDs peryear, even discounting the benefit offuture savings at a 

### 70/0rate.

22 TSL 4 included a 90% AFUE standard for NWGF. 71 Fed. Reg. 65155.

- 13

-While the fact that DOE found a 90% AFUE standard to be economic is not alone sufficientto find that the Massachusetts waiverPetition shouldbe granted, it is worth noting that in those same November 2007 comments DOE again underscored the ability ofstates to seek waivers from Federal preemption. In addition to referring to the comments included with the October 2006 NOPR, DOE clarified that a state can show an "unusual and compelling state interest" by comparing itselfto national averages, and need not distinguish itselffrom adjacent states that may have, e.g., similar climatic conditions. 71 Fed. Reg. 65152. DOE's comments also noted that the Nation would experience quite substantial savings of2 quads ifall states with

more than 5000 HDDs annually adopted a 90°A> AFUE furnace standard. 

### ld.

III. MASSACHUSETTS HAS MET THE REQUIREMENTS FORITS WAIVER 

### PETITION TO BE GRANTED. A. Massachusetts Has Shown By 

### a Preponderance ofthe Evidence That ItHas Unusual And Compelling Interests in 

### Having the Waiver Granted. As required by 42 U.S.C. 

### § 6297(d)(l)(B):23 The Secretary shall

... prescribe such [waiver] rule ifthe Secretary finds

... that the State

... has established by apreponderance ofthe evidence that such Stateregulation is needed to meet unusual and compelling State orlocal energy ... interests. As noted in Section II.B.2, above, DOE has explained that a state can demonstrate**'~nusual** and compelling interests" by comparing its circumstances and interests relative to the Nation as a whole, and need not do so in comparison to other states or even discrete regions ofthe country. 71 Fed. Reg. 58161 (Dec. 28, 2006); 72 Fed. Reg. 65152 (Nov. 19,2007). Therefore, in orderto obtain a waiver, Massachusetts need not show, e.g., that 

### itis colder than other states in the north,

orthat

### ithas highernatural gas prices than anyparticular state orregion in the country. 

### It need only demonstrate, e.g., that its HDDs, energy costs and other circumstances are significantly

23 "Unusual and compelling State orlocal energy ... interests" is further defined in § 6297(d)(I)(C).

- 14-different than "the U.S. as a whole," 72 Fed. Reg. 58161, and that the costs, benefits and burdens ofthe standardmake regulation preferable ornecessary over other alternatives. 42 U.S.C. 

### § 6297(d)(1)(C)(ii); 71 Fed. Reg. 78162

- 78163.24 As required by Section 6297(d)(1)(C)(i), the five Massachusetts interests/characteristics discussed below are "differentin nature ormagnitude than those prevailing in the United States generally": 

### (1) Massachusetts has significantly moreheating degree days than the national average; (2) Massachusetts has significantlyhighernatural gas prices than the national average; (3) Massachusetts has a**significant~y** greater dependence on natural gas both to heat homes and fuel its electrical generation; (4) Massachusetts has a disproportionatelyhigh percentage ofrenters (versus owners) which creates much higherbarriers to the penetration ofhigh-efficiency furnaces than in the United States generally; and (5) Massachusetts has laws different than most states in the country, in that it requires the installation of90% AFUE furnaces (subjectto the DOE waiver) and has adopted otherlaws thatrequire increased levels ofenergy efficiency (e.g., the Green Communities Act, Chapter 169 ofthe Acts of2008) and the reduction ofgreenhouse gas emissions (the Global Wanning Solutions Act, Chapter298 ofthe Acts of2008). 1. 

### Massachusetts Has Far More HDDs Than the National Average. As the attached Optimal Report, Exhibit D, demonstrates, the number ofHDDs25 in

24 Ifthe Secretary finds certain facts listed in § 6297(d)(3), he may notprescribe a waiverrule requested by a state. However, the burden onthe opponents ofthe waiveris heavy: "interestedpersons" must establish "by a preponderance ofthe evidence, that**su~h** stateregulation will significantlyburden manufacturing, marketing, distribution, sale, or servicing ofthe coveredproduct on a national basis

... " Id. See Section lII.e., infra. 25 Heating Degree Days measure the difference between the meantemperature and 65 degrees Fahrenheit on a daily basis, overthe course ofa heating season. Optimal Report, Section II.A., at p. 3.

- 15

-Massachusetts has varied between 5709 and 6704 during the period 2000 to 2007, inclusive, with

an average of6197. Optimal Report, atp. 1, Figure 1. Overthe same period, the number of HDDs nationallyranged from 3915 to 4469, with an average of4245 HDDs. 

### ld. Thus, even the wannestMassachusetts winter (5709 HDDs) had 28% more HDDs than the coldest winter nation-wide (4469 HDDs), and Massachusetts generallyhas 40% to 50% more HDDs than the Nation as a whole. 

### ld. As the Optimal Report noted, at p. 3:**~'There** is a direct correlation between HDD and fuel use." Gas-heatedhouseholds in Massachusetts will consume significantly more energy to keep theirhomes wann than the average household in the country. Massachusetts therefore has "ahigherpublic interestin [furnace] efficiency than exists in the Nation as a whole.,,26 

### 2. Massachusetts Has Higher Gas Rates Than the Country As a Whole. Prices for natural gas in Massachusetts prices are generally 

### 200/0 to 30% higherthan the national average. Optimal Report, Figure 2, and accompanying text. There are only some half dozen states in the country with highernatural gas prices, and prices in Massachusetts are approximately twice as high as in the lowest cost states. Optimal Report, Figure 3. The compound effect ofliving in a state with roughly 450/0 more HDDs than the national average and paying 25% more perunit ofgas means that Massachusetts residents who heat with natural gas tend to pay 175% ormore than the national average for winterheating. Low-income households, which by definition have the hardesttime paying their energy bills, bearunusually heavyburdens iflocated in Massachusetts. The Optimal Report shows that Massachusetts is among the eightmost expensive states in the country, in tenns ofthe heating costs for lowincome households. Optimal Report, Figures 4 and 5.

26 DOE itselfflagged the importance ofa state demonstrating that it has more degree days than the national average, ifit seeks a waiverfrom the furnace standards. 71 Fed. Reg. 59209.

- 16-

### Because ofthe high cost ofheating a home in Massachusetts, compared to the Nation as a whole, Massachusetts has a unique and compelling interest in increasing the efficiency ofnatural gas-fired furnaces and inreducing the amount ofmoneyhouseholds pay for home heating. 

### 3. Massachusetts Residential Heating Loads Compete with Power Plant Loads. Natural gas is not onlythe predominantheating fuel in Massachusetts, itis also the single largest fuel supply source for powergeneration 

### in the state.27 

### As explained 

### in the Optimal Report, atpp. 5 - 6, residential heating loads do not directly compete withpowerplant loads because ofvarious regulatory and operational structures, but: inefficient consumption ofnatural gas in home furnaces needlessly increases overall demand and thus raises prices for all users. Moreover, electric generating units on the natural gas systemhave a lowerpriority than residential heating customers, accounting forthe likelihoodthat gas-fired generators' contracts for natural gas transportation could be interrupted during the wintermonths. (internal quotations and citation omitted). As ISO-New England (the regional electric transmission organization) has noted, fuel-procurement strategies usedby New Englandpower generators make: the availability offuels less certain and challenges the ISO to maintain short-term operable capacity to reliably serve demand. This is particularly so during the winter months when both the core natural gas and gas-fired electricity generation sectors have coincident demand for natural gas. ISO-NE 2008 Regional System Plan, p. 64.28 

### Massachusetts thus has a unique and compelling interestinreducing the inefficiency ofgas-fired furnaces, thus decreasing the consumption of

27 The 2008 Regional SystemPlanpreparedbyISO-New England (available at: http://www.isone.com/trans/rsp/2008/rsp08 [mal 101608 public version.pdf) shows that 42% ofthe kilowatt-hours generated in 2007 came from natural gas-fIredplants, followed bynuc1earplants at 28%. Id., p.**62~** Figure 7-2. 28 Available at www.iso-ne.com/trans/rsp/2008/rsp08_final_l01608--'public_version.pdf.

- 17-natural gas and reducing the risk thatthere wiII notbe adequate supplies ofnatural gas during the wintermonths to meetbothheating loads and the needs ofregional powerplants. 

### 4. The High Percentage ofRental Housing Creates MarketBarriers. Massachusetts has one ofthe highestpercentages ofrental housing in the country. As the Optimal Report demonstrates atFigure 8, only seven states have higherpercentages ofrental housing than Massachusetts. This condition creates uniquebarriers for the state's efforts to increase thepercentage ofhigh-efficiency furnaces. Property owners, nottenants, are legally responsible for maintaining tenants' heating systems. 105 C.M.R, 410.200

- 410.201. Tenants, however, are often responsible for paYing the heating bills. Thus, the ownerhas an "interestin reducing first cost, that is, putting in the least expensive equipment" while the tenant's interestis "focused onreducing operation cost." Optimal Report, at p. 8. These "split incentives" make it "significantlymore challenging [inMassachusetts] to influencepurchasing decisions through

means otherthan standards." Id. Because ofthe high percentage ofrental housing in Massachusetts, the Commonwealththus has a unique and compelling interestinbeing allowed to implement its 90% AFUE regulation as ameans ofreducing inefficient consumption ofnatural gas. There is an extensivebody ofliterature describing marketbarriers that inhibit investment in energy efficient appliances and equipment,29 including the barrierofsplit incentives mentioned above. When tenants are responsible forpaying energy and utilitybills, there is little incentive for a landlord to purchase efficient equipmentthat often includes a higherpurchase price than that for less energy efficient equipment. The benefits ofreduced operating costs,

29 See, e.g., Blumstein, C., et a1., 1980, "Overcoming Social and Institutional Barriers to EnergyEfficiency," Energy, 5(4):355-372; Golove, W. and Eto, J., "MarketBarriers to EnergyEfficiency: A Critical Reappraisal ofthe Rationale for Public Policies to Promote EnergyEfficiency," 1996, Lawrence BerkeleyNational Laboratory.



### - 18

..which overtimemay far exceed the difference between efficient and non-efficient heating equipmentpurchase prices, accrue to the tenantratherthan the landlord. Atthe same time, tenants are often not able orwilling to pay for expensivenew heating equipment thatthey will not own. Further, tenants are typicallyprohibited by law from replacingheating equipment in their dwelling units. Because ofthis split incentive, tenants will oftenbearthe higher operating costs ofinefficient heating equipment, unless governmentregulations require the ownerto install high-efficiency equipment. Low-income households, which are far more likely than higherincome households to rent ratherthan own, are disproportionately disadvantaged. Analysis based onresults from the mostrecent U.S. Energy Information Administration's 2005 Residential Energy Consumption Survey ("RECS") clearly demonstrates thatin the New England Census Division:30 

### (1) low-income31 households tend to berenters ratherthan homeowners; 

### (2) newer, more efficient heating equipment is concentrated heavily in owner-occupiedhousing; 

### and (3) newer, more efficientheating equipment is concentrated heavily in non-low-income households. Table 1, below, shows that among nearly 5.5 million households in New England, 1.2 million, or23%, lived below 150% ofthe federal poverty level in 2005.32 In total, 69% ofthe New England housing stock was owner-occupied, 30% was renteroccupied, and 1% was occupied without payment ofrent. Fifty-fourpercent ofNew England low-income households were renters while only 23% ofnon-law-income households were

30RECS data maybe sorted by Census Division or Census Region. State-level data are not provided. 31 Forpurposes ofthis discussion, a "low-income" household is defined as a household living below 150% ofthe U.S. Health andHuman Services poverty guidelines. A two-personhousehold living below 150% ofthe 2009 HHS**~overty** guidelines has income ofless than $21,855. 2 In Table 1, "row %" refers to the percentage ofhouseholds in either ofthe two numerical rows that own, as opposedto rent, as opposed to occupy without thepayment ofrent. For example, 22.9% ofthe 970,328 households with income above 150% ofthe poverty level renttheir dwelling units.

- 19 -renters. Thus, low-income households were more than twice as likely as non-low-income households to rent.

Table 1. 150%PovertyStatus in New EnglandHouseholds byHousing Tenure

150% Poverty OwnlBuying Rent OccupiedWithoutPayment All Households ofRent Status Households row % Households row % Households row % Households % Household lncomeAbove 150% Federal Poverty Guidelines 3,203,704 75.7% 970,328 22.9% 55,8% 1.3% 4,229,928 77.4% Household IncomeAt or Below 150% Federal Poverty Guidelines 560,748 45.4% 662,017 53.6% 13,303 1.1% 1,236,068 22.6% Column Totals 3,764.452 69% 1,632,345 30% 69,199 1% 5.465.996 100%

Table 2, below, demonstrates that heating equipmentunderten years old, which tends to be more energy efficient than olderequipment, is disproportionately concentrated in owneroccupied housingunits. While 69% ofNew Englandhousingunits were owner-occupied, 84% ofthe heating equipment underten years old was concentrated in these units. Thirty-one percent ofhousingunits were occupiedby renters or occupied withoutpayment ofrent. However, only 15% ofthe newerheating equipment inventory was operating in those units.

Table 2. Age of HeatingEquipmentinNewEnglandHouseholds byHousing Tenure Age ofHeating Own/Buying Rent OccupiedWithout Payment All Households

Equipment ofRent

(Years) Households row % Households row % Households row % Households % Less than 2 356,491 79.8% 90,223 20.2% 

### - 0.0% 446,714 8.2%**2~4** 525,163 77.4% 153,205 22.6%

- 0.0% 678,368 12.4% 5-9 620,631 94.3% 22,021 3.3% 15,598 2.4% 658,250 12.0% 10 19 1,034,832 88.0% 140,848 12.0%

- 0.0% 1,175,679 21.5% 200rMore 1,048,411 83.3% 173,837 13.8% 35,982 2.9% 1,258,230 23.0% Don't Know 160,373 13.2% 1,033,310 85.3% 17,619 1.5% 1,211,302 22.2% No AnswerlNA 18,553 49.5% 18,900 50.5% 0 0.0% 37,453 0.7% Column Totals 3,764,453 690,/0 1,632,344 30% 69,199 1% 5,465.996 100.0%

- 20-Table 3, below, indicates that newerheating equipment in New England was concentratedin non-poorhouseholds. While about 77% ofall New England households were living above 150% ofthe federal poverty level 

### in 2005, about 86% ofthe heating equipment underten years old was operating 

### in thosehouseholds. Twenty-three percent ofhouseholds were low-income, but only 14% ofthe newerheating equipment was operating in those households. 

### Table 

### 3. Age of HeatingEquipmentin New EnglandHouseholds by 150%

### PovertyStatus Household Income Above HouseholdIncomeAt or Age ofHeating 150% Federal Poverty Below 150% Federal All Households Equipment Guidelines Poverty Guidelines

(Years) Households row % Households row % Households % Less than 2 361,447 80.9% 85,267 19.1% 446,714 8.2% 2-4 605,750 89.3% 72,618 10.7% 678,368 12.4% 5-9 562,831 85.5% 95,419 14.5% 658,250 12.0% 10

- 19 1,018,457 86.6% 157,223 13.4% 1,175,679 21.5% 20 orMore 1,004,802 79.9% 253,428 20.1% 1,258,230 23.0% Don't Know 676,642 55.9% 534,660 44.1% 1,211,302 22.2% No Answer/NA 

### - 0.0% 37,453 100.0% 37,453 0.7% Column Totals 4,229,928 77% 1,236,068 23% 5,465,996 100% In summary, spilt incentives result in sub-optimal investmentin efficient heating equipment and excessive usage ofheating fuels. Renters and low-income households are particularly disadvantaged by this dynamic because they are forced to payhigher operating costs associated with older, inefficientheating equipment. Accordingly, Massachusetts has a unique and compelling interest in adopting a regulation that will substantiallymitigate the effects ofthe split landlord-tenant incentives when heating equipment is replaced. 

### 5. Massachusetts Has a Unique Set ofStatutes and Policies Promoting Increased Energy Efficiency and Reductions in 

### Greenhouse Gas Emissions. Massachusetts has beenregulating the efficiency ofappliances sold in the state since 1986. 1986 Mass. Acts, Ch. 489, § 1. The amendment that imposed the 90% AFUE standard on

- 21

-

### furnaces (subjectto DOE approval ofa waiverpetition) was adopted in 2005. 2005 Mass. Acts, Ch. 139, amending M.G.L. c. 25B, § 5. Recently, Massachusetts has passed otherlaws, discussed herein, thatrequire significantimprovements in energy efficiency as well as major reductions in the emission ofgreenhouse gases. Moreover, as discussed more fully in Section III.B., below, Massachusetts also has anumber ofprograms thatbroadlypromote energy efficiency, including the efficiency ofresidential appliances such as furnaces. Few states in the country have this broad and deep a panoply oflaws, policies and programs regarding energy efficiency, energy resource diversity andreliability, and thereduction ofgreenhouse gas emissions. Massachusetts thus has a unique and compelling interest in having its waiver Petition approved, in orderto implement the laws, programs, policies and goals adopted by its Legislature andrelevant state agencies. In 

### 2008, Massachusetts passed two major laws bearing on the issues ofenergy efficiency, energyresource diversity and reliability, and greenhouse gas emissions: the Green Communities Act ("GCA") and the Global Warming Solutions Act ("GWSA"). The GCA, Chapter 169 ofthe Acts of2008, established a very ambitious goal for the state's energy efficiencyprograms that

are funded by electric and gas utilities; those companies are required to meet theirfuture

resource needs "first

... through all available energy efficiency and demandreduction resources that are cost effective orless expensive than supply." Ch. 169, § 11, amending M.G.L. c. 25, § 21A. Consistentwith the legal mandates ofthe GCA, Massachusetts gas utilities have filed an ambitious "Statewide Three-year Gas Energy Efficiency Plan" ("Three-yearPlan") thatproposes to more than triple gas utility expenditures on energy efficiency from 2008 to 2012 and to significantly increase energy savings. Three-yearPlan, atp. 10, "Total Gas Budgets 2008-

- 22-2012.,,33 The Three-YearPlan includes a "Residential High Efficiency Heating Program." 

### Id., p.63. DOE approval ofthis waiverPetition will increase the likelihood that the utilities' ambitious goals will be metbecause the state regulation, ifimplemented, will require that any

new furnaces installed meet or exceed a 90% AFUE standard. Also in 2008, the Massachusetts Legislature passed the GWSA, Chapter 298 ofthe Acts 0[2008, which requires that greenhouse gas emission limits be setbyJanuary, 2011, so that emissions in 2020 will be 100/0 to 25% lowerthan 1990 baseline emissions, and that emissions in 2050 will be 80% below the 1990 baseline level. Chapter 298 ofthe Acts of2008, 

### § 6, adding M.G.L. c. 2IN, 

### §§ 3,4. Massachusetts has a variety ofotherprograms regarding energy efficiency, most of which are discussed below. 

### It is worth noting that Massachusetts has been operating a lowincome Weatherization Assistance Program ("WAP'') for decades, using federal funds provided in accordance with 42 U.SC. 

### §§ 6861

- 6873, and has also operated the Heating Emergency Assistance Retrofit Task Weatherization Assistance Program ("HEARTWAP") thatreplaces inoperative and highlyinefficientheating systems, using aportion ofthe Low-Income Home 

### Energy Assistance Funds ("LIHEAP") received by the state pursuant to 42 U.S.C. 

### §§ 8621

- 8630.34 The goals ofthe Massachusetts WAP and HEARTWAP are to increase the efficiency with which energy is consumed in low-income households so as to reduce unnecessary consumption and make the total energy bills more affordable. Massachusetts requires that when furnaces are replaced underWAP orHEARTWAP, the new furnace must have a rating ofat

33 Available at: http://www.ma-eeac.org/docs/090430-GasPlan.pdf. 34 The FY 09 HEARTWAP program is described on page 9 ofthe State Plan that the state submitted to the federal DepartmentofHealth and Human Services as a condition ofobtaining LIHEAP funding (available at: http://www.mass.goviEhed/docs/dhcd/cdiliheap/smlan.pdfl.

- 23-

### least 90% AFUE, unless local conditions do not allow the installation ofa condensing furnace. 35 

### Because Massachusetts has aunique panoply ofstatutes, policies and programs regarding increased energy efficiency and decreased emissions ofgreenhouse gases, ithas a compelling interestinhaving its waiverpetition approved to ensure compliance with them. 

### B. The Costs, Benefits, Burdens and Reliability ofthe Savings from State Regulation are Preferable to the Costs and Benefits ofAlternative Approaches to Increasing the Penetration ofHigh Efficiency Furnaces. A state seeking a waivermust show that ithas "unusual and compelling" interests in 

### having the waiverrequest granted, where those interests are defined: suchthat the costs, benefits, burdens, andreliability ofenergy orwater savings resulting from the Stateregulation make suchregulation preferable ornecessarywhen measured against the costs, benefits, burdens andreliability ofalternative approaches to energy or water savings orproduction, including reliance onreasonablypredictablemarket-induced improvements in efficiency ofall products subjectto the Stateregulation. 42 U.S.C. § 

### 6297(d)(1)(C)(ii). DOERhas completed the "Alternatives Analysis," Exhibit E, described above in Section LA., to compare the costs, benefits, burdens and reliability ofimplementing the proposed 90% AFUE regulation to the costs, benefits, burdens and reliability offive alternative approaches to increasing thepenetration ofhigh-efficiency gas furnaces. These five alternatives include: a

consumerrebate program, a low-income grantprogram, tax incentives, a consumer financing program, and a public information and customereducation campaign. Alternatives Analysis, Exhibit E, atpp. 1, 3, 9-20. In 

### the Introduction and Summaryto the Alternatives Analysis, atp. 1-3, DOER makes the key point that Commonwealthregulation in the form ofa more stringent

35 Note that only a few hundred low-income households peryearhave theirfurnaces replaced byHEARTWAP. Alternatives Analysis, Table 12, atp. 17. Approval byDOE ofthe waiverrequest will have practical and particularlybeneficial value for the several thousand low-income households who rent their space because, in the absence ofa state regulation, the owners are likelyto install a lower-cost, less-efficient furnace. See Optimal Report, Section ILE., atpp. 8 - 9.



### - 24-90% AFUE standard is preferable to the alternatives available to the Commonwealth as the most feasible and cost-effective way to further increase marketpenetration ofhigh efficiencyfurnaces. The Alternatives Analysis states, atp. 2: We have reached this conclusion supporting the Commonwealth's waiverPetition in part because there has already been high marketpenetration ofhigh-efficiency furnaces in Massachusetts, whichmakes it difficult and less cost-effective for voluntary programmatic efforts to further influence marketpenetration. This existing high market penetration has resulted, among otherreasons, from the Commonwealth's aggressive and comprehensive implementation ofalternative non-regulatory approaches for acquiring energy savings from the installation ofmore efficient gas furnaces, but those approaches have largelyreached theirmaximum benefit. Moreover, the Alternatives Analysis emphasizes, atp. 2, the Commonwealth's position that it cannot "actually attain 95% penetration ofhigh-efficiencyNWGF through any ofthe five alternatives analyzed" because the Commonwealthhas been operating most ofthose alternatives for years, and penetrationhas reached a "plateau which cannotbe significantly improved upon through voluntary, non-regulatory approaches." The Optimal Report, atp. 15 & Figure 13, similarly concludes thatpenetration ofhigh-efficiency NWGF has reached aplateau. Thus, any ofthe alternatives provide little "reliability" (42 U.S.C. 

### § 6297(d)(I)(C)(iii» in tenus of achieving the Commonwealth's furnace efficiency goals, especially in comparison to a mandatoryregulation. As the Alternatives Analysis shows, the estimated costto the Commonwealth ofthe regulatory approach is only $24,000.00 to adopt and implementits proposed 90% AFUE standard and achieve a 95% penetrationrate for those high-efficiency furnaces. Alternatives Analysis, atpp. 

### 3, 21-23. In stark contrast, the cost ofachieving 95% penetration of90% AFUE furnaces using any ofthe other alternatives ranges fromjustunder $3 million (tax incentives) to almost $58 million 

### (grantprograms). Alternatives Analysis, atpp. 3,21-23. Thus, 

### it would cost 125 to 2,400 times as much forthe Commonwealth to achieve 950/0 penetration ofthe high-

- 25

-efficiency furnaces using any ofthe five alternatives included in the DOER study, compared to the simple and direct approach ofallowing the Commonwealth to implementits proposed 90% AFUE standard

-- assuming that any ofthe alternatives could in fact result in 95% penetration of high-efficiencyNWGF. The Commonwealth maintains that none ofthe alternatives could so succeed. The robustness ofthe Alternatives Analysis easily demonstrates that the costs, benefits, burdens and reliability ofstate regulation are immenselymore favorable than the costs and benefits ofany ofthe five alternatives studied, and that the Commonwealthhas metthe requirements of42 U.S.C. 

### § 6297(d)(1 )(C)(ii). As noted above, the approach ofallowing the state to implement its 

### 900/0 AFUE regulationprovides much morereliabilityin tenns ofthe desired energy efficiencyoutcome. If theregulation is implemented, the Commonwealth canreliably depend on achieving approximately 95% penetration ofthe high-efficiency furnaces overtime.36 However, as the Alternative Analysis notes: The non-regulatory alternatives will always result in apenetration ofless than 

### 100%, due to the nature oftechnology diffusion

... Thus, anyrealistic goal for the desired penetration through the use ofan alternative will have to be at less than 

### 100%. Alternative Analysis, at p. 7. The Commonwealthis not aware ofany non-regulatory alternative through which it could reliably expectto get to even 

### 900/0 penetration ofhigh-efficiency furnaces. Thus, all ofthe alternatives not only would impose significantly higher costs (as noted above, 125 to 2,400 times more expensive), they would also be less reliable in tenus ofachieving the desired efficiency outcome.

36 The Commonwealth assumes less than 100% penetrationbecause 90% AFUE condensing furnaces cannotbe installed in a small number oflocations, due to the inability to meet venting requirements. See 225 Mass. Code Regs. § 9.03(l0(b)(authorizing DOER to adoptrules to exempt compliance at locations where local zoning, building orplumbing-code requirements cannotbe met).



### - 26-Section 6297(d)(1)(C) ofEPCA further requires: The factors described in clause (ii) [regarding costs and benefits ofthe state regulation and ofalternatives] shall be evaluated with the context ofthe State's energyplan and forecast

.... The Commonwealthhas submitted a "Massachusetts State EnergyPlan" ("Energy Plan") and energy forecast (the "forecast") for its regulated gas companies as Exhibits Band C, respectively. Obtaining the requested waiveris entirely consistentwith the Energy Plan and forecast. As the EnergyPlan notes, the Commonwealth sees increased energy efficiency as "thebest costcontainmenttool we have to reduce energyuse and greenhouse gas emissions that are causing global wanning." Energy Plan, atp. 2. Massachusetts not only sees itselfas "aleaderwith respectto energy efficiency," but its Legislature has recentlytakenmajor steps to increase its long-standing focus on energy efficiency as a key tool in its energytoolbox. Id. During 2008, the Commonwealth adopted the GWSA, which sets strict greenhouse gas reduction goals, includingreducing those emissions 800/0 below 1990 levels by 2050. EnergyPlan, atp. 2. It also adopted the GCA, which, 

### inter alia, will result in utilities in the state tripling their expenditures on energy efficiencybetween 2009 and 2012, in orderto meet a requirement ofobtaining all cost-effective energy efficiency. Energy Plan, atp. 3. The Energy Plan also demonstrates that the Commonwealth has already adopted a verybroad range ofprograms to reduce energy consumption, including, 

### interalia:

• state appliance efficiency standards for appliances orproducts not already regulated byDOE;

• utility-funded energy efficiencyprograms that already expend over $125 million peryear and that will increase that spending significantlyunderthe GCA;

- 27-• incentives forthe installation ofcombined heat andpowerfacilities; and

• a recently-updatedbuilding energy efficiency code. Moreover, the aggregated forecast for the state's regulated gas companies projects year-to-year increases 

### in gas consumption through 2015, which reinforces the importance ofadopting a 90% AFUE furnace standard that will help to dampen thatprojected growth.



# c. The Proposed State Regulation Will Not Significantly Burden Manufacturing, Marketing, Distribution, or Sale or Servicing ofFurnaces. Section 327(d)(3), 42 U.S.C. § 6297(d)(3), provides that: [t]he Secretarymaynot prescribe a rule underthis subsection ifthe Secretary finds (and publishes such finding) that 

### interestedparties have established, by a preponderance ofthe evidence, that such State regulation will 

### significantly burden manufacturing, marketing, distribution, sale or servicing ofthe covered product 

### on a national basis

.... [Emphasis added]. 

### In determining whetherto make such a finding, the Secretaryis directed to consider "all relevant factors" including the extentto which there will be: (1) any increase in manufacturing ordistribution costs; (2) any disadvantage to smallermanufacturers, distributors ordealers, or lessening ofcompetition; (3) anyburden on manufacturers to redesign and produce the product covered by the Stateregulation; and (4) the likelihood ofwaiver approval contributing significantly to a proliferation ofState appliance efficiency requirements, and the cumulative impact any suchrequirements would have. 42 U.S.C. § 6297(d)(3)(A)-(D). Clearly, the burden is on "interested parties" who oppose the waiverto establish "by a preponderance ofthe evidence" that the state regulation "will significantly burden manufacturing, marketing, distribution, sale orservicing ofthe coveredproduct on a national



### - 28-basis." 42 U.S.C. 

### § 6297(d)(3). Not only does the statute so require, butDOE's ruling on the only waiverpetition filed to date also clearlyplaces the burden ofproofon the "interested

### party" who seeks a detennination thatthe state regulation will burdenmanufacturing, distribution, sale

or servicing ofthe coveredproduct.37 While theburden ofproofregarding detenninations under 

### § 6297(d)(3) is thus squarely

on the shoulders ofthose who seek such determinations, and not on thepetitioners for a waiver, the Commonwealthhas demonstrated that industry will in fact notbe burdened. The Optimal Report demonstrates the following: 1. A highpercentage ofunits shippedto Massachusetts alreadymeetthe 90% standard. Optimal Report, Section 

### III, atpp. 10-21, and Figures therein. The NOPR suggests that DOE will favor a state which can demonstrate a high**~~saturation** ofhomes withproducts that alreadymeetthosehigher standards," as this would help demonstrate thatthe burden on manufacturers ofmeeting that standard wouldbe minimal. 71 Fed. Reg. 59210, col. 

### 1. The NOPR also notes that "a State seeking a waiver offederal preemptionlikelywould want to demonstrate the extent to which manufacturers alreadyproduce and sell products that would meet the state's proposed standard" and "how efficiencies ofshipments to that state alreadyvary

37 "Notice ofDenial ofa PetitionforWaiverfrom Federal Preemption," 71 Fed. Reg. 78157

- 78168 (Dec. 28, 2006). In four instances, DOE squarelyplaced the burden ofproofon industry and those opposed to the state regulation. See 71 Fed. Reg. 78165, col. 2 (" AHAM has failed to demonstrate by apreponderance ofthe evidence

..."); 71 Fed. Reg. 78166, co. 2 (" comments opposed to the CaliforniaPetition did not adequately demonstrate

..."); 71 Fed. Reg. 78166, col. 3 ("

... commenters opposed to the CaliforniaPetition have not provided sufficientevidence or analysis

..."); 71 Fed. Reg. 78167, col. 1 ("

... the interested parties opposed to the CaliforniaPetition didnot satisfy their burden

...").

- 29-from currentDOE efficiency levels," 71 Fed. Reg. 59210, col. 1, which the Optimal Report does. Optimal Report, Section III, atpp. 10-21, andFigures therein. 2. A survey offurnace installers in Massachusetts did notreveal the likelihood of any serious burdens on the installers, orthe distributors that supply them. Optimal Report, atp. 23-24. 3. Based on a survey 

### it completed, Optimal Energy concluded thatthere are no manufacturers ofgas furnaces in the Commonwealth or adjacent states that would be adversely affectedby the proposed standard. Optimal Report, 

### p. 24. 4. From a consumerperspective, there are no desirable "features" ofnon-condensing furnaces compared to condensing furnaces. Optimal Report, atpp.lO-12, 21. As the NOPR suggested, a state seeking a waiver "might seekto demonstrate

... [that] high efficiency furnaces alreadyhave all ofthe characteristics and features available in less efficient furnaces sold in that state," 71 Fed. Reg. 59210, col. 3, and the Commonwealth has so demonstrated. 5. The standardthat Massachusetts is proposing is identical to the standardthat other

-states 

### in New Englandhave also adopted, so that approving the instantwaiveris veryunlikely to

lead to a proliferation ofstate standards. See 71 Fed. Reg. 59210, col. 2 

## C'

. .. a State seeking a waiver from DOE maywish to seek to demonstrate, for example, the extentto which ithas chosen identical standard levels as other States thathave developed proposedregulations

...").

- 30-

### IV. CONCLUSION The Department ofEnergy should grantthe Commonwealth's waiverpetitionto allow its 900/0 AFUE standardt9 take effect. In accordance with 42 U.S.C. § 

### 6297(d)(1)(B), the Commonwealth "has establishedby a preponderance ofthe evidence that such state regulation is needed to meetunusual and compelling State or local energy orwater interests." Therefore, the Secretary should prescribe the requested waiverrule. Respectfully submitted, THE COMMONWEALTH OF MASSACHUSETTS

MARTHA COAKLEY ATTORNEY GENERAL**BY:--=~-=----=-** ----I+-_'l 

### Frederick D. Augenstem 

### BBO# 553102 AssistantAttorney General Environmental Protection Division 1 Ashburton Place, 18thFloor Boston, Massachusetts 02108 (617) 963-2427 MASSACHUSETTS DEPARTMENT OF ENERGY RESOURCES PHILIP GIUDICE, COMMISSIONER

# By:~' S'"\b. /' Robert Sydney 

## I' BBO# 490840 General Counsel 100 Cambridge Street

- Suite 1020 Boston, Massachusetts 02114 (617) 626-7333

- 31

-

# ATTACHMENT A

MASSACHUSETTS APPLIANCE EFFICIENCY STANDARDS ACT, M.G.L. c. 25B, §§ 1 - 10 and 

# 225 C.M.R. 9.01

- 9.06

# M.G.L. c. '25B, 

# §§ 1 - 10 Chapter25B: Section 1. Shorttitle This chapter shall be known and may be cited as the "Massachusetts Appliance Efficiency Standards Act". 

### Chapter25B: Section 2. Definitions As used in this chapter·the following words shall, unless the context requires otherwise, have the following meanings: "Ballast", a device used with 

### an electric discharge 

### lamp to obtain necessary circuit conditions (voltage, current 

### and waveform) for starting 

### and operating the lamp. "Boiler", a space heater that is a self-contained appliance for supplying steam or hot water primarily intended for space heating. This tenn does not include hot water supply boilers. IICentral furnace", a self-contained space heater designed to supply heated air through ducts ofmore than 10 inches in length. 

### [Definition of"Commissioner"effective untilJuly 

### 2, 2008. 

### For texteffective July 

### 2, 2008, see below.] "Commissioner", the commissionerofthe division of**~nergy** 

### resources. 

### [Definition of"Commissioner" as amended by 2008, 169, 

### Sec. 45 

### effective July 2. 

### 2008. For text-effective July 2,2008, see above.] "Commissioner", the commissionerofenergy resources. "Compensation", money or any othervaluable thing, regardless ofform, received orto be received by aperson for services rendered. "Electricity ratio (ER)" is the ratio offurnace electricity use to total furnace energy use. ER = 

### (3.412*EAE)/(1000*EF 

### + 3.412*EAE) where EAE and EF are defmed in title 10 of the code offederal regulations. "High-intensity discharge lampll, a lamp in which light is produced 

### by the passage ofan electric current through a vapor or gas and in which the light-producing arc is stabilized by bulb wall temperature and the arc tube has a bulb wall loading in excess of3 watts per square centimeter."Fluorescent lamp ballast" or "fluorescent ballast", a device designed to operate fluorescent lamps by providing a starting voltage and current, and limiting the current during normal operation, but shall not include such devices that have a dimming capability or are intended for use 

### in ambient temperatures ofzero degrees fahrenheit or less orhave a power factor ofless than sixty one-hundredths for a single F40T12 lamp. "Freezer", a cabinet designed 

### as a unit for the storage of food at temperatures of approximately zero degrees fahrenheit, having the ability to freeze food and having a source ofrefrigeration requiring an energy input. "F40T12 lamp", a tubular fluorescent lamp that is 

### anominal forty watt lamp with 

### a fortyeight inch tube length and one and one-halfinches in diameter. "F96T12Iamp", a tubular fluorescent lamp that is 

### a nominal seventy-five watt lamp with aninety-six inch tube length and one and one-halfinches in diameter. "Lamp", an incandescent, reflector incandescent, tungsten halogen, or fluorescent type lamp. "Luminaire", a complete lighting unit consisting ofa fluorescent lamp or lamps, together with parts designed to distribute the light, to position and protect such lamps and to connect such lamps to the power supply. "Medium voltage dry-type distribution transformer", a transformer that: 

### (l) has an input voltage ofmore than 600 volts butless than or equal to-34,500 volts; (2) is air-cooled; (3) does not use oil as a coolant; and (4) is rated for operation at a frequency of60 Hertz. "Metal halide lamp", a high-intensity discharge lamp in which the major portion ofthe light is produced by radiation ofmetal halides and theirproducts ofdissociation, possibly in combination with metallic vapors. "Metal halide lamp fixture", a light fixture designed to be operated with a metal halide lamp and a 

### ballast for a metal halide lamp. "New appliance", an appliance that is sold, offered for sale or installed for the first time and specifically includes floor models and demonstration units. "Probe-startmetal halide ballast", a ballastused to operate metal halide lamps which does not contain an igniter and which instead starts lamps by using a third starting electrode probe in the arc tube. ':Refrigerator", a .cabinet with one exterior door designed for the refrigerated storage of food at temperatures above thirty-two degrees fahrenheit and having a source of refrigeration requiring an energy input; refrigerator may include a compartment for the freezing and storage offood attemperatures below thirty-two degrees fahrenheit but does not provide a separate low temperature compartment designed for the freezing and long

### term storage offood at temperatures below eight degrees fahrenheit. A refrigerator may have interior doors on compartments. "Refrigerator-freezer", a cabinet which consists oftwo or more ,compartments with at least one of the compartments designed for the refrigerated storage of foods at temperatures above thirty-two degrees fahrenheit and with at least one of the compartments designed for the freezing and storage of foods at temperatures of eight degrees fahrenheit orbelow. The source ofrefrigerationrequires energy input. "Residential furnace or boilee', a product which utilizes only single-phase electric current, or single-phase electric current or DC current in conjunction with natural gas, propane, orhome heating oil, and which:-

(1) is designedto be theprinciple heating source forthe living space ofaresidence; (2) is not contained within the same cabinet with a central air conditioner with 

### a rated cooling capacity exceeding 65,000 Btuperhour;

(3) is an electric central furnace, electric boiler, forced-air central furnace, gravity central furnace orlow-pressure steam orhotwater boiler; and

(4) has a heat input rate ofless than 300,000 Btu per hour for electric boilers and lowpressure steam or hot water boilers, and less than 225,000 Btu per hour for forced-air central furnaces, gravity central furnace and electric central furnaces. "Single-voltage external AC to DC power supply", a device that:

(1) is designedto convert line voltage AC inputinto lowervoltage DC output; (2) is able to convertto only one DC outputvoltage at atime; (3) is sold with, or intended to be used with, 

### a separate end-use product that constitutes the primary power load;

(4) is containedwithin a separatephysical enclosure from the end-useproduct; (5) is connected to the end-use product via a removable or hard-wired male/female electrical connection, cable, cord or otherwiring;

(6) does not have batteries or battery packs, including those that are removable, that physically attach directly to the power supply unit;

(7) does not have a battery chemistry or type selector switch and indicator light, or does nothave abattery chemistry ortype selector switch and a state ofcharge meter; and

(8) has anameplate outputpowerless than or equal to 250 watts."State-regulated incandescent reflector lampl" a lamp, not colored or designed for rough or vibration service applications, 

### with an inner reflective coating on the outer bulb to direct the light, an E26 medium screw base, a rated voltage or voltage range that lies at leastpartially within 115 to 130 volts and thatfalls into eitherofthe following categories: a bulged reflector, elliptical reflector, blown parabolic aluminized reflector or similar bulb shape with a diameter equal to or greater than 2.25 inches; or a reflector, parabolic aluminized reflector, bulged reflector or similar bulb shape with a diameter of2.25 to 2.75 inches, inclusive. "State plumbing codell

, the uniform state plumbing code, amendments and rules and regulations thereto, as promulgated by the board ofstate examiners ofplumbers and gas fitters under the provisions ofsectionthirteen ofchapter one hundred and forty-two. "Transformerll

, a device consisting of 2 or more coils of insulated wire and that is designed to transfer alternating current by electromagnetic induction from 1 coil to another to change the original voltage or current value. This term does not include: 

## (n devices with multiple voltage taps, 

### with the highest voltage tap equaling at least 20 per cent more than the lowest voltage tap; or (2) devices, such as those commonly known as drive transformers, rectifier transfonners, auto-transformers, uninterruptible power system transformers, impedance transformers, regulating transformers, sealed and nonventilating transfonners, machine tool transformers, welding transformers, grounding transfonners or testing transfonners, that are designed to be used in a special-purpose application and are tUllikely to be used in general-purpose applications. "Water heater", an automatically controlled vessel designed primarily for heating and storing waterto provide hot water service for domestic or sanitarypurposes. 

### Chapter25B: Section 3. Application ofchapter The provisions ofthis chapter shall apply to the testing, certification and enforcement of efficiency standards for lamps and the following types ofnew appliances sold, offered for sale orinstalled in the commonwealth: (a) refrigerators, refrigerator-freezers and freezers which canbe-operatedby alternating current electricity, excluding the following types: those designed to be used without doors; those which do not include a compressor and a condensorunit as an integral part ofthe cabinet assembly; refrigerators and refrigerator-freezers 

### withtotal refrigerated volume exceeding thirty-nine cubic feet; top mountedrefrigerator-freezers withtotal refrigerated volume less than sixteen and six-tenths cubic feet; and freezers 

### with total refrigerated volume exceeding thirty cubic feet. 

### (b) storage type electric, gas and oil waterheaters. (c) fluorescent ballasts for F40T12 and F96T12 lamps.l-' (d) luminaires with fluorescent ballasts for F40T12 and F96T12 lamps. (e) showerheads. 

### (t) medium voltage dry-type distributiontransformers. (g) metal halide lamp fixtures. (h) residential furnaces orboilers. 

### (i) single-voltage external AC to DC power supplies. 

## (D state-regulated incandescentreflector lamps. The provisions ofthis chapter shall not apply to: new appliances or lamps manufactured inthe commonwealth and sold outside the commonwealth; new appliances or lamps manufactured outside the commonwealth and sold atwholesale inside the commonwealth for fmal retail sale and installation outside the commonwealth; appliances or lamps installed in manufactured homes at the time ofconstruction; or appliances orlamps designed expressly for installation and use in recreational vehicles. 

### Chapter25B: Section 4. Restrictions on sale orinstallation No new appliance coveredby clauses (a) to (e), inclusive, ofsection 3 may be sold, offered for sale orinstalled in the commonwealth on orafterJanuary fust, nineteen hundred and eighty-eight, unless the energy efficiency ofthe appliance meets or exceeds the standards establishedpursuantto this act. No new lamp coveredby clauses (a) to (e), inclusive, ofsection 3 shall be installed in the conimonwealth in a building otherthan a residence on orafterJanuary first, nineteen hundred and ninety, unless the energy efficiency ofthe lamp meets orexceeds the standards established by the commissionerpursuantto this chapter. The commissioner may, through regulation, establish exemptions for certain lamps used for specified purposes. 

### Chapter25B: Section 5. Establishment ofenergy efficiency standards; revision The commissioner shall by regulation establish the level ofenergy efficiency standards for lamps, so that each lamp covered by said standard shall consume less power 

### in watts perunit oflight outputin lumens than a maximumreference level to be establishedbythe commissioner; provided, however, that said standards shall not become effective until January first, nineteen hundred and ninety. The commissionermay by regulation increase the level ofthe energy efficiency standards for lamps, fluorescent ballasts, luminaires and showerheads. Said commissioner may also by regulation increase the level ofthe energyefficiency standards for refrigerators, refrigerator-freezers, freezers and water heaters, provided that said standards shall not become effective until January first,**ni~eteen** hundred and ninety. Any revision ofsuch standards shall be basedupon the determination bythe commissionerthat such efficiency levels are cost-effective to the users, as a group, ofthe covered appliance or lamp. Any standard revised pursuant to this section which conflicts with a corresponding standard in the state plumbing code shall take precedence overthe standard in said code. Any standardrevised pursuantto this section shall nottake effect for atleast one year after its adoption. The commissioner, in consultation with the heads ofother appropriate agencies, shall adopt regulations, in accordance 

### with this chapter, establishing minimum energy efficiency standards for the types ofnew products set forth in clauses (f) to (s), inclusive, ofsection 3. The regulations shall provide for the following minimum efficiency standards: 

### [Clause 

### (1) of the thirdparagraph effective until December 

### 18, 2007. For text effective December 18, 

### 2007, see below.]

(1) Medium voltage dry-type distribution transfonners shall meet minimum efficiency levels 3/10 of a percentage point higher than the Class 1 efficiency levels

- for medium voltage distribution transfonners specified in Table 4-2 ofthe "Guide for Determining Energy Efficiency for Distribution Transformers" published by the National Electrical Manufacturers Association (NEMA StandardTP-1-2002). 

### [Clause 

### (1) ofthe thirdparagraph as amended by 2007, 

### 178 effective December 18, 2007. For texteffective untilDecember 18, 

### 2007, see above.]

(1) New medium voltage dry-type distribution transformers, single voltage external AC to DC power supplies, and state-regulated incandescent reflector lamps manufactured on or after January 1, 2008, shall notbe sold or offered for sale in the commonwealthunless the efficiency ofthe new product meets or exceeds the efficiency standards set forth 

### in 225 CMR 9.03.

(2) Metal halide lamp fixtures designed to be operated with lamps rated greater than or equal to 150 watts but less than or equal to 500 watts shall not contain a probe-startmetal halide ballast.

### (3) Residential furnaces or boilers shall meet or exceed the following Annual Fuel UtilizationEfficiency (AFUE): Product Type Gas and propane furnaces Oil furnaces Gas and propane hot waterboilers Oil-fuedhot waterboilers Gas andpropane steamboilers Oil-fired steamboilers 

### MinimumEfficiency Level 90%AFUE 83%AFUE 84%AFUE 84%AFUE 82%AFUE 82%AFUE The commissioner may adopt rules to exempt compliance 

### with these furnace or boiler standards at any building, site or location where complying with said standards would be in conflict with any local zoning ordinance, building or plumbing code or other rule regarding installation and venting ofboilers orfurnaces. Residential furnace air handlers shall have 

### an ER of2 per cent or less, except residential oil furnaces with a capacity ofless than 94,000 Btu per hour shall have an ER of2.3 per cent orless.

(4) Single-voltage external AC to DC power supplies shall meet 'the tier 1 energy efficiency requirements of California Code ofRegulations, Title 20, Section 1605.3 as published in April 2005. This standard applies to single-voltage AC to DC power supplies that are sold individually and to those that are sold as a component of or in conjunction with anotherproduct.

(5) State-regulated incandescent reflector lamps shall meet the minimmn average lamp efficiency requirements for federally-regulated incandescent reflector lamps contained in 42 U.S.C. section 6295 (i)(l)(A). The following lamps are exempt from these requirements: ER30, BR30) BR40 and ER40 of50 watts or less; BR30) BR40 and ER40 of65 watts; and R20 of45 watts or less. On or after 

### January 1, 2008, no new medium voltage dry-type distribution transfonner, single-voltage external AC to DC power supply or state-regulated incandescent reflector lamp may be sold or offered for sale in the state unless the efficiency ofthe new product meets or exceeds the efficiency standards set forth 

### in the regulations adopted pursuantto this section. On or after January 1, 2009, no new metal halide lamp fixture may be sold or offered for sale in the commonwealth unless the efficiency of the product meets or exceeds the efficiency standards set forth in the regulations adopted pursuant to this section. In 

### accordance with section 9, the commissioner, 

### in consultation with the attorney general, shall determine ifimplementation ofstate standards for residential furnaces or boilers requires a waiver from federal preemption, and shall apply for such waivers if necessary. If the commissioner determines that a waiver from federal preemption is necessary for residential furnaces or boiler standards established 

### by this section, the state standard shall go into effect at the earliest date permitted by 

### federal law. If the commissioner determines that a waiver from federal preemption is not needed for

### residential furnaces or boilers, then such state standards shall go into effect on June 1, 2008. One year after the date upon which sale or offering for sale ofcertain products is limited pursuantto the preceding paragraph ofthis section, no new products may be installed for compensation 

### in the state unless the efficiency ofthe new product meets or exceeds the efficiency standards set forth 

### in the regulations adoptedpursuantto this section. 

### Chapter258: Section6. Testing procedures The commissioner shall adoptprocedures for testing the energy efficiency ofthe appliances and lamps covered by this chapter

### ifsuchprocedures are notprovided for in any other applicable code regardingthe testing ofappliance efficiency. The commissioner shall use United States Department ofEnergy approved test methods, orin the absence ofsuchtestmethods, otherappropriate nationally recognizedtest methods applicable to the respective appliances and lamps. The manufacturer shall cause the testing ofsamples ofeach model ofeach appliance and lamp covered by this chapterin accordance 

### with the testprocedures adoptedpursuantto this section orthose specified in any other applicable code regardingthe testing ofappliance efficiency. The commissionermay testproducts coveredby section 3. Ifproducts so tested are found notto be in compliance with the minimum efficiency standards establishedunder section 5, the commissioner shall: 

### (l) charge the manufacturer ofsuchproductforthe costof productpurchase and testing, and (2) provide infonnation to the public onproducts found notto be in compliance with the standards. In adopting testprocedures for detennining energy efficiency, the commissionermay consultwith otherappropriate departmentheads and may adoptupdated testmethods when newversions oftestprocedures become available. 

### Chapter25B: Section 7. Certification ofcompliance; labelingproducts to connote compliancewith efficiency requirements ofchapter Manufacturers ofappliances and lamps covered by this chapter shall certify to the commissionerthat such appliances and lamps are in compliance 

### with the provisions of this chapter. The commissioner shall promulgateregulations governing the certification ofappliances and lamps coveredby this·chapter and shall publish an annual listofsuch appliances and lamps. Manufacturers' certifications shall be based on testresults. The commissioner shall coordinate 

### with the certificationprograms ofother states and federal agencies with similar standards to the maximum extentpracticable, including investigating whethercertification in another state can serve as a substitute for certificationin the commonwealth. Single voltage external AC to DC power supplies shall be exemptfrom the requirements ofthis section.Manufacturers ofnewproducts coveredby section 3 shall identify each product offered for sale or installed 

### in the state as in compliance with this chapterby means ofa mark, label ortag onthe product and packaging at the time ofsale orinstallation. The commissioner shall promulgate regulations governing the identification ofsuch products andpackaging, which shall be coordinated to the greatestpractical extent with. the labeling programs ofother states and federal agencies with equivalentefficiency standards. The commissioner shall allowthe use ofexisting marks, labels ortags which connote compliance with the efficiency requirements ofthis chapter. Stateregulated incandescentreflector lamps and metal halide lamp fixtures shall be exemptfrom the requirements ofthis paragraph. The commissioner, in consultation with other states, productmanufacturers and otherinterestedparties, shall study and evaluate the usefulness and effectiveness ofsuch markings for incandescentreflectorlamps and metal halide lamp fixtures. 

### Chapter25B: Section 8. Inspections ofdistributors orretailers; violations; penalties The commissionermay cause periodic inspections to be made ofdistributors orretailers ofnew appliances in orderto detennine compliance with this chapter. The commissioner may also work withthe chairman ofthe board ofbuilding regulations and standards to coordinate inspections for new products that are also coveredby the state building code. The commissioner shall cause investigations to be made ofcomplaints received

- concerning violations ofthis chapter and shall reportthe results ofsuch investigations to the attorney general. The attorney general may instituteproceedings to enforce the provisions ofthis chapter. Failure to comply with any ofthe provisions ofthis chapter shall constitute an

### unfair or deceptive act under the provisions ofchapterninety-three A. Any person who violates any provision ofthis chapter shall be punishedby a civil penalty ofnot more than two hundred and 

### fifty dollars or as provided in chapterninety-three A, whichever is greater. Each violation ofthis chapter shall constitute a separate offense, and each day such violation continues shall constitute a separate offense. 

### Chapter25B: Section 9. Superseding federal statutes, etc.; duties ofcommissioner Ifthe commissionerdetermines that a federal statute, rule or determination would supersede any requirement ofthis act, orifthe commissioneris notified by the United States Department ofEnergy that a petition has been filed to supersede any requirement ofthis act, the commissioner shall determine (a) whetherthere is a substantial state or local need which is sufficienttojustify the state requirement at issue, 

### (b) whetherthe state requirement atissue does not unduly burden interstate commerce, and (c) whether the state requirement at issue contains a more stringent energy efficiency standard than a corresponding federal standard. Ifthe commissioner determines that these criteria are met, the commissioner shall promptlypetitionthe United States Department ofEnergy requesting a ruling thatthe state requirement atissue notbe superseded, or shall promptlyfile 

### with the United States Department ofEnergy a requestthatthe petitionto supersede be denied. 

### Chapter25B: Section 10. Study and evaluation ofeffectiveness ofenergy efficiency; report and recommendations on efficiency standards; regulations The commissioner shall study and evaluate the effectiveness ofenergy efficiency 

### in the commonwealth as well recommend new or increased efficiency standards. Such study and evaluation shall be conducted in consultation 

### with interestedparties. The commissioner shall file a report with the clerkofthe house ofrepresentatives on or before September 1 ofthe yearbefore each new legislative session, describing the timing, scope and findings ofthis study, and shall recommend to the general courtnew or increased efficiency standards, ifthese standards would serve to promote conservationin the commonwealth and wouldbe cost-effective forthe users, as a group, ofthe covered appliance. The clerk shall forward such reportto thejointcommittee on telecommunications, utilities and energy ofthe general court. The commissionermay adopt suchfurther regulations as necessary to ensure theproper implementation and enforcement ofthis chapter.

# 225 C.M.R. 9.01 - 9.06

9.00: APPLIANCE ENERGY-EFFICIENCY STANDARDS, TESTING AND CERTIFICATION PROGRAM . Section 9.01: Statutory Authorization 9.02: Definitions 9.03:. Product Standards and Test Methods 9.04: Certification 9.05: Identification of Complying App11ances and Lamps 9.06: Enforcement 9,01: StatutoryAuthorization M.G.L. c. 25B, 

### §§**5'thro~gh** 10**~equire** tpe Commissioner of Energy Resources to adopt procedures for testing the- energy**efficien~** of appliances and lamps covered**~y** 225 'CMR 9.00 if such procedures are not covered by the state plumbing code, and,to certify those in compliance with 225 CMR 9.00. 

### 9.02: Definitions Terms defined in 42 U.S.C. s. 6291 andN.G.L. c.·25B, 8.2, which are also used in '225 CMR 9.00, shall have**th~·sarne** meaning as set forth in 42 U.S.C. s. 6291 and M.G.L c.' 25B, s.2, unless said term is otherwise defined in 225 CMR 9.02.

. UANSI," the American National Standards Institute. "Automatic Defrost,N a defrost system in which the defrosting action for all refrigerated surfaces is initiated and terminated automatically. "Ballast -Factor," the ratio of the relative light output of a ballast expressed as a per cent to the rate of energy consumption expressed in watts at the test conqitions specified**in·M.G~L.** c. 25B, s. 6. "Boiler," a space heater that is a self-contained appliance for supplying steam or hot water primarily intended for space heating. This term does not include hot water supply boilers. "Central furnace," a self-contained space heater desi.gned to supply heated air through ducts of more than 10 inches in**l~gth.** "Chest Freezer," a freezer whose access door is at the ,top of the appliance. "Ballast," a device used with an electric discharge lamp to obtain necessary circuit conditions (voltage, current and waveform) for starting and operating the lamp. "Compensation," money or any other valuable thing, regardless of form, received or to be received by a person for services rendered."Electricity ratio (ER) II is the ratio of furn'ace electricity use to total furnace energy use. ER 

## = (3.412*EAE)/(lOOO*EF + 3.412*EAE) where EAE and EF are defined in title 10 of the code of federal regulations. "Energy Use" shall mean the quantity of energy directly consumed by a consumer product at point of use, determined in accordance with test procedures under 42 U.S.C. s.6293. "Energy Efficiency" shall mean the ratio of the useful output of services from a consumer product to the energy use of such product, determined in accordance with test procedures under 42 U.S.C. s. 6293. "Energy Conservation standard" shall mean a performance standard which 'prescribes a minimum level of energy efficiency or a maximum quantity

of energy use, or in the case of showerheads, faucets, water closets, and urinals, water use, for a covered product determined in accordance with tests procedures prescribed under 42 U.S.C. s. 6293. "High-intensity discharge lamp", a lamp in which light· is produced by the passage of an electric current through a vapor or gas and in which the light-producing arc is stabili,zed by bulb wall temperature and the**~rc** tube has a bulb wall loading in excess of 3 watts per square centimeter

.. "Manual Defrost," a defrost system in which the defrosting action for all refrigerated surfaces is initiated manually. "Medium voltage dry-type distribution transformer, II a transformer that: {I} has an input voltage of more than 600 volts but less than or eqUal to 34,500 volts; (2) is air-cooled; (3) does not use oil as a coolant; and (4) is rated for**operati~n** at a frequency of 60 Hertz. "Metal halide lamp,lI a high-intensity discharge lamp in which the major portion of the light is produced by radiation of metal halides and their products of dissociation, possibly in combination with metallic vapors. "Metal halide lamp fixture," a light fixture designed to be operated with a metal halide lamp and a ballast for a metal halide lamp. "Model," all units of a given type of covered product (or class thereof) manufactured by one manufacturer which do not have any differing electrical, physical or functional characteristics that affect energy consumption and : (a)**wit~** respect to refrigerators, refrigerator-freezers**~d** freezers, have the same' primary energy source, have electrical 'characteristics that are essentially identical, and do not have any differing physical or functional characteristics that affect energy consUmption; (b) with respect to water heaters, have the same prima'ry energy source and, with the exception of immersed heating elements, do not have any differing electrical, physical, or functional characteristics that affect energy consumption. "Nominal Input Voltage,lI an input voltage within plus 

### 5% or minus 5% of a specified value. \\Norninal -Lamp Watts,lI the wattage at which a lamp is designed to operate and for which it is therefore rated."Partial Automatic Defrost," a defrost system in which the defrosting**~ction** for the refrigerated surfaces in the refrigerator compartment is initiated and terminated automatically and the defrosting action for the refrigerated surfaces in the**free~er** is initiated manually. "Probe-start metal halide ballast," a ballast used to operate metal halide lamps which does not contain an igniter and which instead**start~** lamps by using a third starting electrode probe in the arc tube. "Relative Light Output," the test ballast light output divided by a reference ballast light output using the same reference lamp and expressing the value as a percent. These measurements are made at the ballast's rated primary voltage. "Residential**furna~e** or boiler," a product which utilizes only singlephase electric current, or single-phase electric current or DC current in conjunction with natural gas-, propane, or home heating oil, and which:- (1) is designed to be the principle heating source for the living space of a residence; (2) is not contained within the same cabinet with a central air conditioner with a rated cooling capacity exceeding 65,000 Btu per hour; (3) is an electric central furnace, electric boiler, forced-air central furnace, gravity central furnace or low-pressure steam orhot water boiler; and (4) has -a heat- input rate of less than 300,000 Btu per hour for electric boilers and low-pressure steam or hot water boilers, and less than 225,000 Btu per hour for forced-air central furnaces I gravity central furnace and electric central furnaces. "Single-voltage external AC to DC power supply," a device**~hat:** (1) is designed to convert line voltage AC input into lower voltage DC output; (2) is able to convert to only one DC output voltage at a timej (3) is sold with, or intended to be used with, a separate end-use product that constitutes the primary power load; (4) is contained within a separate physical enclosure from the enduse product; (5) is connected to the end-use product via a removable or hardwired male/female electrical connection J cable, cord or other**wirin~;** (6) does not have batteries or battery packs, including those that are removable J that physically attach directly to the power supply unit;(7) does not have a battery chemistrY or type selector switch and indicator light, or does not have ,a battery chemistry or type selector switch and a state of charge meterj and (8) has a nameplate output power less than or equal to 250 watts. "State-regulated incandescent reflector lamp," a lamp, not colored or designed for rough or vibration service applications, with an inner reflective coating on the outer bulb to direct the light, an E26 medium screw base, a rated voltage or voltage range that lies at least partially within 115 to 130 volts and that ,falls into either of the following**categories~** a bulged reflector, elliptical reflector, blown parabolic aluminized reflector or similar bulb shape with a diameter equal to or greater than 2.25. inches; or a reflector, parabolic aluminized reflector, bulged reflector or similar bulb shape with a diameter of 2.25 to 2.75 inches, inclusive.' "Transformer" II a device consisting of 2 or more coils of insulated wire and that is designed to transfer alternating current by electromagnetic induction from 1 coil to another to change the original voltage or current value. This term does not include: (1) devices with multiple voltage taps, with the highest voltage tap equaling at least 20 per cent more than the lowest voltage tap; or (2) devices, such as those commonly known as drive transformers, rectifier transformers, autotransformers, uninterruptible power system transformers, impedance transformers, regulating transformers, sealed and non-ventilating transformers, machine tool transformers, welding transformers, grounding transformers or testing transformers, that are designed to be used in a special-purpose application and are unlikely to be used in general-purpose applications. "Upright Freezer,1I a freezer whose access door is at the front of the appliance. 

### 9.03:Product Standards and Test Methods (1) Product standards and test methods shall be as indicated below for those appliances 

## and lamps expressly addressed by the Conunonwealth in 225 CMR 9.03.' Those product.standards and test methods not otherwise explicitly mandated by the Commonwealth shall be prescribed under 42 U.S.C. s. 6295 and 10 C.F.R s. 430 as of January 1, 2006 and shall be the minimum standards and methods to be**u~ed unti~**  such time as more stringent standards are enacted by the Commonwealth or Federal government and shall become a part of Appliance Testing and Certification Program guidelines issued from time to time by DOER. (2) The manufacturer shall cause the testing of all new appliances and lamps to be sold for final 'retail sale in Massachusetts on or after January 1, 1988 as prescribed below. (3) Refrigerators. Refrigerator Freezers and Freezers. (a) The annual energy consumption of a refrigerator,**refrige~ator-freezer** or freezer (excluding the following types: those designed to be used without doors; those which do not include a compressor and a condenser unit as an integral' part of ,the cabinet assembly; refrigerator and refrigerator-freezers with total refrigerated volume exceeding 30 cubicfeet; top-mounted refrigerator-freezers with total refrigerated volume less than 16.6 cubic feet; and freezers with total refrigerated volume exceeding 30 cubic feet} shall ,not exceed the values derived from the formulas in 42 U.S.C. s. 6295. (b) Fresh food refrigerated volume r freezer refrigerated volume r total refrigerated volume, energy consumption and energy factor shall be determined using the test procedures for refrigerators and freezers in 10 CFR s. 430.22 and s. 430.23 (2006), or as subsequently amended. (c) When a.refrigerator r refrigerator-freezer or freezer can be operated using either alternating current electricity or one or more other sources of primarypower r the test shall be performed using alternating current electricity only. (4) Water Heaters. (a) The energy ·efficiency of all new electric r gas or oil water heaters shall meet. or exceed the energy factor specified in 42 U.S.C. s. 6295(e). {b) The manufacturer shall cause the testing of samples of each model of oil, gas, or electric water heater, to be sold for final**retai~** sale in Massachusetts on or after January 1, 1988, in accordance with test procedures in 10 C.F.R. s. 430.23(e) and 10 C.F.R. s. 430-B, app E. (5) Showerheads. (a) The maximum flow rate for all new showerheads shall not exceed the values specified in 42 U.S.C. s. 6295 (j). (b) The manufacturer shall cause the testing of samples of each model of showerhead by a laboratory approved by the Commissioner. The method of testing shall be the federal standard pursuant to 42 U.S.C. s. 6295 (i) and the laboratory shall complete and submit a Laboratory Certification form available from the Commissioner. (6) Fluorescent Ballasts-. The.product standard for fluorescent ballasts shall**~e** the federal standard prescribed under 42 U.S.C. s. 6295 g(5). (7) General service fluorescent lamps and incandescent reflector lamps. The product standards for general service fluorescent lamps and incandescent reflector lamps shall meet or exceed the lamp efficacy and CHI standards specified in 42 U.S.C. s. 6295(i). (8) medium· voltage dry-type**distrib~tion·transformers.** (a) Medium voltage dry-type transformers shall have efficiencies not less than the applicable values in the following table when tested at 50 percent of the rated output power and at 75 degrees C. (Following table. copies Table 4-2 of NEMA standard ·TP 1-2002, but adds 3/10 point for each value per the Massachusetts law. The NEMAstandard is available on their website at www.nema.org)SinglePhase Three phase Rated Minimum efficiency % Ratedpower Minimum efficiency % power output in outputin kVa

kVa ::;60kV >60kV**~60kV** >60kV BIL BIL BlL BIL 15 97.9 97.9 15<30 97.1 97.1 <25**~25<37.5** 98.2 98.2**~30<45** 97.6 97.6

37.5 <50 98.4 98.4**~45<75** 97.9 97.9 ;::: 50<75 98.5 ·98.5**~75<112.5** 98.2 98.2**~75<100** 98.7 98.7 112.5<150 98.4 98.4

100<167 98.8 98.8 150 <225 98.5 98.5 167<250 99.1 99.0**~225-<300** 98.7 98.7**~250<333** 99.2 99.1**~300<500** 98.9 98.8**~333<500** 99.3 99.2**~500<750** 99.1 99.0**~500<667** 99.4 99:3**~750** <1000 99.2 99.1 667 <833 99.5 99.3 1000 99'-3 99.2 <1500 833 99.5 99.4 1500 99:4 99.3 <2000**~2000** 99.5 99.3 <2500 2500 99.5 99.4 kVa = kilovolt amperes kV = kilovolts BIL

### =basic impulse**insulati~n** level (b) The manufacturer shall cause the testing of. samples of mediumvoltage dry-type distribution transformers to.be sold for final retail sale in Massachusetts on or after January 1 1 2008 in accordance with the National Electrical Manufacturers Association (NEMA) standard TP2-2005/**~Standard** Test Method for Measuring the Energy Consumption of Distribution Transformers. U This test method is available from NEMA at www. nerna. org. (9) metal halide lamp fixtures. (a) Metal halide lamp fixtures designed to be operated with lamps rated. greater than or equal to 150 watts but less than or equal to 500 watts shall not contain a probe-start metal**h~lide"ballast.** (10) residential furnaces or boilers. (a) Residential furnaces or boilers shall meet or exceed the following Annual Fuel Utilization Efficiency (AFUE): Product Type Minimum Efficiency Level Gas and propane furnaces *90% AFUE Oil furnaces *83% AFUE Gas and propane hot water boilers *84% AFUE Oil-fired hot water boilers *84% AFUE Gas and propane steam boilers *82% AFUE Oil-fired steam boilers *82% AFUEb) The commissioner may adopt rules to exempt .compliance with these furnace or boiler standards at ,any building, site or location where complying with said standards would be in conflict with any local zoning ordinance, building or plumbing code or other rule regarding installation and venting of boilers or furnaces. (c) Residential furnace air handlers shall have an ER of 2 per cent or less, except residential oil furnaces with a capacity of less than 94,000 Btu per hour shall have an ER of 2.3 per cent or less. Cd) The manufacturer shall caUse the testing of samples of each model of residential furnaces .and boilers to be sold for final retail sale in Massachusetts in accordance with the federal test method contained in Appendix N to subpart B of part 430, title 10, of the code of Federal Regulations (CFR). The test**rnet~od** includes the testing methods required for both elements of Massachusetts standards (i.e. minimum AFUE standards and maximum electricity ratio standard. ) (11) single-voltage external AC to DC power supplies. (a) Single-voltage external AC to DC power supplies shall meet the requirements in the following table copied from table 

### u-i of**th~** April 2005 version of California's Title 20: Nameplate output ; Minimum Efficiency in Active Mode <.1 watt 0.49 * Nameplate Output

_ > 1 watt and < or= 49 watts 0.09*Ln(Nameplate Output) + 0.49 > 49 watts 0.84 Maximum Energy Consumption in No-Load Mode < 10 watts 0.5 watts > or

## =10 watts and < or

## = 250 watts 0.75 watts Where Ln (Nameplate Output)

## =Natural Logarithm ofthe nameplate output expressed in Watts (b) The manufacturer shall cause the testing of samples of each model of**single-volta~e** external AC to DC power supplies to be sold for final retail sale in Massachusetts on or after January 1, 2008 

# in accordance with the**tes~** methodology specified in the United States Environmental Protection Agency's**~Energy** Star program Requirements for Single Voltage External AC-DC and AC-AC Power Supplies" as in effect on January 1, 2005 except that products do not have to be tested at 230 volts. -This document is available from the U.S. EPA. Manufacturers can access' this document at**http://www.energystar.gov/indes.cfm?c=productspecs.pt~roduct** specs

. Manufacturers can also review the underlying testing methodology, \\Test Method for Calculating the Energy Ef·ficiency of single-Voltage External AC-DC and AC-AC Power Supplies (august 11, 200-4)" at http://www.energystar.gov/index.cfm?c=ext-power supplies.power suppl ies_consumers. (12) state-regulated incandescent reflector lamps.(a) State-regulated incandescent reflector lamps shall meet the minimum efficacies in the following table: Nominal Lamp Wattage Minimum average lamp efficacy (lumens perwatt) 40- 50 10.5 51- 66 11.0 67

- 85 12.5 86

- 115 14.0 116-155 14.5 156

- 205 15.0 The following types ofincandescentreflectorlamps are exemptfrom theserequ4ements: (I)lamps rated at 50 watts or less ofthe following types: BR30, ER30, BR40, andER40; (II)lamps rated at 65 watts ofthe following types: BR30, BR40, andER40; and (IIl)R20 lamps of45 watts orless.

.

,(b) The manufacturer shall cause the testing of each model of state-regulated incandescent reflector lamps to be sold for final retail sale in Massachusetts on or after January 1, 2008 in accordance with the federal test method found in Appendix R to subpart B of part 430, Title 10, of the Code of Federal Regulations.

9.04:Certification (1) No new appliance or lamp covered by M.G.L. c. 25B, §3 may be sold, offered for sale or installed in Massachusetts after the .dates designated for the respective products in M.G.L. c.25B, §S which is not certified pursuant to paragraph (2) of this section. (2) The manufacturer shall submit to the Commissioner or to another state or third-party as designated by the Commissioner in guidelines a certification statement listing all new appliance models and lamps covered by 225 CMR 9.00. The certification statement requirements shall be set forth in the guidelines. (3) On or after January I, 2008, no new medium voltage dry-type distribution transformer, single-voltage external AC to DC power supply or state-regulated incandescent reflector lamp may be sold or offered for sale in the state unless the efficiency of the new product meets or exceeds the**effici~cy** standards. set forth in 225 CMR 9.03." (4) On or after January 1, 2009, no new metal halide lamp fixture may be sold or offered for sale in the commonwealth unless the efficiency of the product meets or exceeds the efficiency standards set forth in 225 CMR 9.03. (5) In· accordance with M.G.L. c.25B, §9, the commissioner, in consultation with the attorney general, shall determine if implementation of state standards for residential furnaces or boilers requires a waiver from federal preemption, and shall apply for such waivers if necessary. If the commissioner determines that a waiver from federal preemption is necessary for.residential furnaces or boilerstandards established by this section, the state standard shall go into effect at the earliest 'date permitted by federal law. If the commissioner determines that a waiver from federal preemption is not needed for residential furnaces or boilers, then such state standards shall go into effect on June 1, 2008. (6) One year after the date upon**wh~ch** the sale or .offering for sale of certain products is limited pursuant to the preceding clauses of 225 CMR 9.04, no new products may be installed for compensation in the state unless the efficiency of the new product meets or exceeds the efficiency**standa~ds** set forth in 225 CMR 9.03 adopted pursuant to M.G.L. c.25B, §5. (7) The commissioner may test products covered by M.G.L. c.25B, §3. If products so tested are found not to be in compliance with the minimum**e~ficiency** standards established under M.G.L. c.25B, §S, the commissioner shall; (1) charge the manufacturer of such product for the cost of product purchase and testing 1 and (2) provide information to the public on products found not to be in compliance with the standards. (8) In adopting test procedures for determining energy efficiency, the commissioner may consult with other appropriate department heads and· may adopt**~pdated** test methods when new versions of test procedures become available.



### 9.05:ldentification of Complying Appliances and Lamps (1) Sufficient information shall be shown on the outside of the shipping carton or packaging and on the product**o~** product nameplate for any appliance or lamp (and unit carton in the case of plumbing fittings) to permit. the determination of whether the appliance or lamp complies with the requirements of 225 CMR 9.00. The appropriate measure of energy consumption or the model·number as it has been certified may be used for this purpose and shall be deemed as providing sufficient information to determine compliance. Additionally, for medium-voltage dry-type transformers and residential fur.naces and boilers l the label information to be shown shall be marked. with the words "Meets MA efficiency standards u , using the two-letter identification for Massachusetts: MA. Additionally, for. external power**suppl~es,** the label information to be shown shall employ the labeling regime as that described in the regulations of the State of California Energy Commission for appliance standards in Section 1607(9)of the California Cod? Of Regulations, Title 20, as in effect on January 1, 2006 (Cal. Code Regs. tit. '20 1 § 1607 (9) (2006)].**Additionally~** the words "2.5 gpm maxi', the actual tested flow rate, or other conspicuous' marking approved by the Commissioner, .shall be marked on each showerhead sold or offered for sale, ?ither by means of ·a permanent marking on the fitting or on a label attached to the fitting and also upon the unit carton in which the fitting is offered for retail sale.(2) The Commissioner or his/her designee may require .additional information if necessary to permit determination of compliance. (3) The manufacturer's name or brand name shall appear on each appl:iance or lamp.



### 9.06: Enforcement (1) Notwithstanding the provisions of 225 CMR 9.04, the Commissioner shall have authority to challenge the efficiency test results provided by the manufacturer and cause the**applianc~** model or lamp to be retested. (2) The Commissioner may cause periodic inspections to be made of manufacturers, distributors or retailers of the new appliances covered by M.G.L. c. 25B, including appliances that have been or are to be installed by contractors or builders at building sites, in order· to determine compliance with 225 CMR 9.00. (3) Except as expressly provided in the guidelines, any test ordered by the Commissioner would involve one unit selected by the Commissioner or his/her designee. (a) If the performance of the unit meets or exceeds the standard set forth in 225 CMR 9.00, no further action is necessary/ and the Division of Energy Resources will pay the cost of testing; (b) If the performance of the unit does not meet or exceed the standard set forth in**2~5** CMR 9.00, the manufacturer must pay the. cost of testing and/ if the certification for that model has been suspended, take whatever steps are necessary to recertify the appliance at an efficiency rating equal to or exceeding the applicable standard according to the process outlined in the guidelines. (4) The Commissioner shall cause investigations to be made of complaints received concerning violations of M.G.L. c. 25B. all such complaints shall identify the complainant by name and address and should be in writing. The results of each investigation shall be reported to the complainant and to the attorI1;ey general. REGULATORY AUTHORITY 225 CMR 9.00: M.G.L. c.25B, §§ 3 - 10; St. 1986, c.

489; St.2005/ c.139. The following text is effective 06/01/06

# ATTACHMENT B

THE CONIMONWEALTH'S ENERGY PLANDeval L. Patrick Governor Timothy P. Murray Lieutenant Governor Ian A. Bowles Secretary, Executive Office ofEnergy and Environmental Affairs Philip Giudice Commissioner 

### COMMONWEALTH OF MASSACHUSETTS EXECUTNE OFFICE OF ENERGY AND ENVIRONMENTAL AFFAIRS 

### DEPARTMENT OF ENERGY RESOITRCES 100 CAMBRIDGE ST., SUITE 1020 BOSTON, MA 02114 Internet: www.Mass.Gov/DOER

Email: Energy@State.MA.US



### Commonwealth ofMassachusetts Department ofEnergy Resources

Massachusetts State Energy Plan TELEPHONE 617-626-7300 FACSIMILE 617-727-0030 617-727-0093



### Preparedin connection with a waiverpetition submittedunder 42 

### USC

### § 6297 

### to allow Massachusetts to implementa 90%AnnualFuel Utilization Efficiency standard for residential furnaces



### September30, 2009

1

### I. Introduction and Goals Urgency is growing across the nation as the impacts ofglobal wanning on our economy, health, agriculture, and environment become certain. Greenhouse gas emissions associated with our buildings, transportation, and energy generation are causing our climate to change. Simultaneously, uncertain supplies and prices offuels threaten ournational and economic security, requiring more than everthat the U.S. achieve energy independence. While the energy and climate challenges we face as a state and a nation appear daunting, we have many tools and programs which, when fully deployed, will enable substantial progress. Here in Massachusetts we are well positionedto mobilize solutions for these challenges and unleash our fullest potential. One solution with high impact is energy efficiency. Massachusetts' historically high cost of energy and our innovative people have combined to establish us as a leader in energy efficiency, the best cost-containmenttool we have to reduce energy use and greenhouse gas emissions that are causing global warming. Efficiency is a proven, reliable, and extremely valuable tool for building a greener energy future. It is also a tool that we can quickly deploy to reinvest in our homes and businesses and, in the longerterm, put Massachusetts at the hub ofa 21 st century global clean energy economy. Massachusetts has long been a leader with respectto energy efficiency. Since 1997, both the electric and gas investor-owned utilities have beenrequired to provide energy efficiency programs to their customers. Due to those programs, today, approximately 8% ofthe Commonwealth's electricity needs are met through efficiency. The Commonwealth's appliance standards legislation, M.G.L.c. 25B, enacted in 1986 and expanded in 2005, sets stringent efficiency standards for certain appliances and equipment, driving industry to develop more and more efficientproducts that use less energy and create less greenhouse gas emissions. Building codes set high standards for building energy performance. More recently, in 2008, the state enacted several pieces oflegislationthat, collectively, strengthen the foundation on which Massachusetts' energy future is based. These laws, summarized in Appendix A, set goals for statewide reductions in greenhouse gas ("GHG") emissions and energy use; require establishment ofa carbon cap and trade program to reduce carbon dioxide emissions from all sources; make significant new commitments to electric and natural gas energy efficiency programs, renewables, and other alternative energy sources; and commit the Commonwealthto developing a strong clean energy sector and training residents for high quality greenjobs. The Global Warming Solutions Act ("GWSA"), 2008 Mass. Acts Ch. 298, sets the stage for a dramatic reduction in greenhouse gas emissions in the Commonwealth. GHG emission reduction goals set forth in the GWSA include:

• By 2050, adoption ofa GHG statewide emissions limit that is at least 80% below 1990 GHG emission levels.

• Adoption ofinterim GHG emissions limits for 2020, 2030, and 2040. 2020 limits must be between 10 and 25% below 1990 GHG levels.

2

### Energy use goals set forth in the Green Communities Act ("GCA"), 2008 Mass. Acts Ch. 169, include:

• Reduce fossil fuel use in buildings by 10% from 2007 levels through the increased efficiency ofboth equipment (e.g. appliances) and the building envelope;

• Meet at least 250/0 

### ofthe Commonwealth's electric load, including both capacity and energy, with demand side resources including: energy efficiency, load management, demand response and generation that is located behind a customer's meter including combinedheat andpower;

• Meet at least 20% ofthe Commonwealth's electric load through new, renewable, and alternative energy generation. This Energy Plan describes a set ofprograms, policies, and strategies designed to meet the Commonwealth's energy and environmental goals. This Plan, set forth by the Massachusetts Department ofEnergy Resources ("'DOER") within the Executive Office ofEnergy & 

### Environmental Affairs, has been developed specifically for the accompanying waiver application, submittedpursuant to 42 USC 

### § 6297, to allow Massachusetts to implement a 90% Annual Fuel Utilization Efficiency standard for residential furnaces. This Planis meant to be flexible, iterative, and responsive to changing economic and energy-related conditions and technology. To that end, it should be read as a roadmap for today, with the understanding that it may change, as circumstances change, to better achieve its goals. In addition, there is no "magic bullet" in the Plan. Each ofthe programs, policies, and strategies described is critical in telTIlS of Massachusetts' ability to reach its greenhouse gas emission and energy use reduction goals. 

### II. 

### Programs, Policies, and Strategies to Achieve Energy Goals This section describes various efficiency programs, policies, and strategies underway in Massachusetts to reduce energy use and GHG emissions. 

### Energy Efficiency Federal and State Appliance/Product Standards Appliance and product standards setthe bar for minimum energy efficiency ofproducts, and are one ofthe most effective tools for reducing energy use and GHG emissions. Most such standards are set by the federal government, and states are only allowed to set standards on those products which are not federally regulated, or for which they have received from the U.S. Department ofEnergy ("DOE") a waiver offederal preemption. The Commonwealth's original appliance standards legislation was enacted in 1986. In November, 2005, these standards were expanded to cover additional appliances and equipment, including a standard for gas furnaces that is more stringentthan the federal standard. Massachusetts may not implement this standard until it eitherreceives a waiver offederal preemption from DOE, orDOE issues a new rule implementing a like standard. In addition, Massachusetts supports the development and use ofmore efficient appliances and products

3through DOER's involvement in energy efficiency programs offered by Massachusetts utilities, which include financial incentives for people to buy and install EnergyStarproducts and appliances, as well as other higWy efficientproducts/appliances. 

### Utility-Administered Energy Efficiency Programs Underthe 1997 electricity restructuring law, 1997 Mass. Acts Ch. 164, a "systems benefit charge" was added to electricity bills, yielding about $125 million annually in recent years. These funds are used for industrial, commercial, residential, and low-income efficiency programs. There is no such charge on natural gas bills, but gas utilities also have consumeroriented efficiency programs (historically funded at lower levels in relation to total revenues than for electricity). In addition, because it is recognized that much ofthe efficiency potential for residences is in space,heating, the electric utilities have provided some funding for homes that use fuel oil for heating. For all three ofthe energy sources, these funds pay for a range ofenergy efficiency services, including: energy audits to identify energy efficiency opportunities, contractors to install energy efficiency measures, financial incentives to install efficiency measures and appliances, and infonnation about energy use and carbon footprint. Our analyses indicate that the cumulative impact ofthese investments has reduced the Commonwealth's annual electricity use by approximately 8%. 

### All Cost-Effective Energy Efficiency (Expanded Efficiency Programs) Historically, the utility-run efficiency programs have been limited by the amount offunding provided by the systems benefit charge for electric utilities and rate case settlements for gas utilities. The GCA greatly expands the opportunities for savings from utility-run efficiency programs by: (a) providing the utilities with additional funds, i.e., at least 80% offunds generatedthrough the Regional Greenhouse Gas Initiative ("RGGltt) GHG "cap and trade" program auctions are dedicated to efficiency programs (see below for a more detailed description of RGGI); (b) mandating that utilities invest in all efficiency and demand-side resources that are cost-effective, which is defined as costing less per unit ofenergy savedthan supplying more electricity or natural gas (for example, energy efficiency programs currently cost about 3-4 cents per kilowatt-hour compared with electricity supply costing 8-10 cents perkilowatt-hour). This mandate is expectedto result in at least a tripling ofutility driven efficiency overthe next few years. In addition, the GCA provides for greater oversight ofutility energy efficiency plans and programs. In the past, utilities have developed theirplans in consultation with DOER and have been required to obtain a detennination from the Massachusetts Department ofPublic Utilities ("MDPU") that the programs were cost-effective. The GCA creates an Energy Efficiency Advisory Council, which is chairedby DOER and includes a variety ofstakeholders. It is required to oversee and approve each utility's energy efficiency plan to ensure that the GCA mandate to provide all cost-effective demand side resources is met.

4

### Low-Income Weatherization Assistance Program The Massachusetts Weatherization Assistance Programhelps low-income households reduce their heating bills by using federal and state funding to provide full-scale home energy conservation services. The program is operated by Community Action Agencies throughoutthe state, coordinated bythe Low Income Energy AffordabilityNetwork and the state's Department ofHousing and Community Development. To the greatest extent possible, work is coordinated with any utility-funded energy efficiency programs thatmay be available in an area. Local weatherization contractors are hired to complete the work at no cost to the occupants. Typical work completed includes air sealing, attic and/or sidewall insulation, weather-stripping, and minor repairs associated with the weatherizationwork. (Heating system work, ifneeded, is typically referred to a separate program funded by the federal Low Income Home Energy Assistance Program (http://www.acf.hhs.gov/programs/ocs/liheap/.) Gas furnaces installed underthis program have an annual fuel utilization efficiency rating ofat least 90% except where local conditions do not allow for the required venting.) All workreceives a thorough quality control inspectionby an energy auditor. Funds from the American Recovery and Reinvestment Act of2009, (Pub. L. 111-5,) ("ARRA",) will help this critical program expand in 2009 and 2010. 

### Incentives for Combined Heat and Power Combined heat and power ( ItCHP") facilities produce both electricity and heating/cooling. When sized properly and located at appropriate host sites, CHP systems are highly efficient and provide a substantial opportunity for GHG reductions as compared to conventional heating and power supply. Two significantnew incentives are available to customers seeking to install CHP. First, pursuantto the GCA, CHP is now eligible to receive rebates from the electric utility energy efficiency programs. The pending utility plans now include [mandai support for: (a) technical assistance to ensure cost-effectiveness; and (b) rebates for capital costs ofCHP installations. Second, the GCA directs the creation ofan Alternative Energy Portfolio Standard ("APS"), which requires retail electricity suppliers (both regulated distribution utilities and competitive suppliers) to obtain apercentage oftheir electricity from sources that qualify as Alternative Energy Generation Units (ofwhich CHP is currently the most commercially viable resource). The APS begins with an obligation of 1% ofgeneration in 2009 and increases annually up to 5% in 2020. The number ofcertificates created by a facility increases as a host customermaximizes use ofits thermal output, resulting in a maximum incentive for sites most appropriately using this technology. Both ofthese new incentives are expected to foster more aggressive adoption of CHP at locations where ithas the bestpromise ofmitigating GHG emissions.

5

### Deconpling The Decoupling Order, MDPU Order 07-50A, issued by the Massachusetts Department ofPublic Utilities onJuly 16, 2008, will help ensure that utilities improve their efficiency programs, as envisioned by the GCA. The old system ofrate structures meant that utilities would lose money when theircustomers cut their energy use through efficiency measures. By breaking the link between utility revenues and energy sales, decoupling removes disincentives for utilities to provide expanded, quality energy efficiency programs. Pursuantto the Order, overthe next few years utilities will transition to a new set ofrate structures that eliminate the economic disincentives to their investment in energy efficiency and distributed generation. Energy Efficiency in Building Codes, Training, and Commissioning Section 55 ofthe GCA requires the state to adoptthe latestrevision ofthe International Energy Conservation Code ("IECC") as part ofthe state building code, within one year ofits enactment. Priorto this legislationthere had been long delays in updating the building code to incorporate current efficiency standards. As aresult ofthe GCA, the state's Board ofBuilding Regulation and Standards ("BBRS") has already adopted the 2006 IECC and the 2007 amendments to it; and by lawthe BBRS must adopt the 2009 IECC by the end ofthis year. The BBRS, in conjunction with DOER, is also empowered to adopt more stringent standards that are deemed warranted. Section 55 ofthe GCA also requires the BBRS and DOERto develop regulations for training and certification oflocal building inspectors regarding the energy provisions ofthe building code, and to ensure that all new construction and renovation passes inspection by inspectors who have had.such training. Section 55 ofthe GCA also instructs DOERto issue regulations requiring that buildings largerthan 10,000 square feet undergo "commissioning" (which is a process to ensure that building systems perform in accordance with their design and the owner's operational needs) or acceptance testing. Governor's Clean Energy Challenge In November, 2008, Massachusetts Governor Deval Patrick issued a challenge to Massachusetts operating companies, service providers, and non-profits to reduce energy consumption and save money. The Governor's Clean Energy Challenge supports companies in reducing their energy use and emissions by at least 10% over the nextthree years. The Challenge is an initiative developed by the New England Clean Energy Council andthe Massachusetts High Technology Council, inpartnership with energy distribution utilities NSTAR, National Grid, Western Mass Electric, and Unitil. Challenge participants will be supported in their efforts by the utilities and by mentor companies like Millipore, Pfizer, Genzyme, Staples, and Raytheon. These mentor companies were an importantpart ofthe agenda at the Challenge's kick-offconference and exposition on May 12, 2009.

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### Business Development and Workforce Training

Clean Energy Center The Green Jobs Act of2008, 2008 Mass. Acts Ch. 307, createdthe Massachusetts Clean Energy Centerto acceleratejob growth and economic development in the state's clean energy industry. This new quasi-public agency serves as a clearinghouse and support center for the clean energy sector, making direct investments in new and existing companies, providing assistance to enable companies to access capital and othervital resources for growth, and promoting training programs to build a strong clean energy workforce that capitalizes on thejob opportunities created by a vital new industry. Recently the Center awarded Springfield Technical Community College (STCC) a three-year $1.87 million contractto coordinate energy efficiency workforce training programs under the Center's Energy Efficiency and Building Science Skills Initiative. STCC will be a statewide clearinghouse for energy efficiency training activities, materials and services, while coordinatingjob training at regional centers based at STCC as well as Roxbury, Berkshire, Bristol, North Shore, Greenfield, and Quinsigamond Community Colleges. 

### Large-Scale Private Development Mass. Environmental Policy Act GHG Policy The Massachusetts Environmental Policy Act ("MEPA"), M.G.L. c. 30, Sections 61-621, is a planning statute that requires new developmentprojects proposed for construction in Massachusetts to undergo review to determine whethertheir environmental impacts can be mitigated to the greatest extentpossible. The MEPA GHG Policy and Protocol requires that certainprojects undergoing MEPA review quantify their GHG emissions and identify measures to avoid, minimize, or mitigate such emissions. In addition to quantifying project-related emissions, the Policy also requires proponents to quantify the impact ofproposedmitigation in terms ofemissions and energy savings. This Policy is part ofa larger effortto focus attention on the causes ofclimate change and harness creative thought and technology to implement longterm solutions. This Policy is not intended to create a numerical GHG emission limit or a numerical emissions reduction target. Rather, in keeping with MEPA's overall purpose to evaluate alternatives that avoid, minimize and mitigate environmental impacts, the Policy is intendedto ensure thatprojectproponents andreviewers have carefully considered the GHG impact oftheirprojects and taken all feasible means to reduce those impacts. All projects that require an Environmental Impact Report are subjectto review underthe Policy unless the project's emissions are anticipated to be minimal.

7Government Operations Leading by Example (State Government Operations) 

### The Leading by Example ("LBE") Program, established in April 2007 by GovernorDeval Patrick's Executive OrderNo. 484 ("EO 484"), works to reduce environmental impacts at all executive branch agencies, as well as atthe 29 public institutions ofhigher education and several authorities. The program oversees efforts to reduce energy and fuel use atthe state's 65 million square feet ofbuildings and from thousands oflight and heavy duty vehicles. The program also seeks to increase recycling, reduce waterconsumption, promote environmentally preferable purchasing, facilitate the construction ofgreen state buildings, and reduce carbon emissions across state government. EO 484 sets the following targets for state government: (a) 25% reduction in GHG emissions by 2012; 40% by 2020; and 80% by 2050; (b) 20% reduction in energy use by 2012, and 35% by 2020; (c) increase 

### in consumption ofrenewable electricity to 15% oftotal electric use by 2012, and 30% by 2020; and (d) 10% reduction in water consumption by 2012, and 15% by 2020. The LBE Program is responsible for tracking energy use**~d** 

### GHG emissions for state government, and provides pilot funding, technical assistance and training for dozens ofagencies and hundreds ofstaffeach year. Green Communities Program 

### Createdby the GCA in 2008, the Green Communities Program (the "Program") is intendedto help municipalities become more sustainable, control rising energy costs, and incubate the clean energy technologies and practices thatwill put ourcities and towns, and the Commonwealth, at the center ofthe 21st century clean energy economy. Envisioned as a way to encourage municipalities to make greener energy decisions, the Program is mandated to offer grant and loan opportunities to municipalities in orderto be designated as "green communities." Types of assistance offeredby the Program include helping communities qualify for state funding by adopting local by-laws and regulations that facilitate the siting andpermitting ofrenewable energy facilities, benchmarking municipal energy use and reducing energy consumption, purchasing fuel-efficient vehicles for municipal fleets, and taking steps to reduce lifecycle energy costs for new commercial, industrial and residential buildings. The GCA allows funding of$10 million peryear for the program from the proceeds ofRGGI's allowance auctions. The Program also serves all Massachusetts cities and towns as a one-stop shop for energy efficiency and renewable energy opportunities, helping them understand all state programs attheir disposal and providing streamlined delivery ofthose programs. To achieve the goal ofserving all 351 cities and towns inMassachusetts, the Green Communities Division ofDOER offers a number of programs and services, including the Energy Audit Program, the Green Communities Grant Program, Energy Management Services technical assistance, stimulus grant programs and support, an Energy Information Reporting System, an information website, and four Regional Coordinators to provide direct supportto cities and towns.

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### Cap-and-Trade (electricity generation) Regional Greenhouse Gas Initiative ("RGGI") ROGI, www.rggi.org, is an agreement among 10 northeast states, from Maine through Maryland, tojointly limit C02 emissions from electricitypowerplants. Under a Memorandum of Understanding ("MOU") signed by most ofthe states in December 2005, and later amended as other statesjoined, there is an overall limit on emissions from the northeast. The limit ("cap") went into effect in January 2009, and remains fixed through 2014. 

### It then drops 2.5% a year through 2018, so that in 2018 emissions are required to be 10% below the 2009 level. Each state has anindividual limitthat was negotiated among the states. Eachpowerplant of25MW capacity or greatermust purchase an "allowance" (orpennit) for each ton ofCO2 

### emissions. Powerplants able to reduce emissions below their respective allowance totals may sell surplus allowances to utilities that are unable to meet emissionreduction targets. In addition, power plants may also meet a portion oftheir allowance requirements by using "offsets," which are methods ofreducing GHG emissions not connected to electricity generation, such as planting trees. The MOD requires each state to use at least 25% ofits allowances for a "consumerbenefit or strategic energy purpose;" the remainder can be used as the state wishes, including providing them to electricity generators atno cost. In practice, the states have chosen to sell by auction the vast majority ofthe allowances, andthe funds are being used predominantly to pay for energy efficiency andrenewable energy programs. Underthe terms ofSection 7 ofthe GCA, Massachusetts is auctioning almost 100% ofthe allowances, and using atleast 80% ofthe money generated bythe auction to fund utility-run energy efficiency programs. Thus, in additionto harnessing the power ofthe marketto reduce GHG emissions associated with electricity generation, RGGI is designed to further reduce GHG emissions by investing money in energy efficiency. As ofJuly 2009, Massachusetts has held four auctions, which have resulted in approximately $55 million being invested in energy efficiency. RGGI auction proceeds also fund the Green Communities Program (described above), which provides incentives and assistance for municipalities to adopt energy efficiency andrenewable energy measures. 

### Renewable Energy Renewable Portfolio Standard Createdbythe Electricity Restructuring Act of1997 (1997 Mass. Acts ch. 164) the Massachusetts Renewable Energy Portfolio Standard (RPS) requires retail electricity suppliers (both regulated distribution utilities and competitive suppliers) to obtain for theirretail customers a percentage ofelectricity from sources that qualify as New Renewable Generation Units (i.e., post-1998), with compliance by means ofpurchasing Renewable Energy Credits. The RPS began with an obligation of 1 percent in 2003and increased by one halfpercent annually since then, reaching 4 percent in 2009. Pursuant to the GCA, the RPS annual increase will 9

### double to 1 percent annually after 2009. Consequently, by 2020, 15% ofthe supply for nonexemptretail sales, or about 7.5 million megawatt-hours (MWh) at current load levels, is to be from new, renewable resources. This commitmentto renewable energy will strengthenthe renewable energy infrastructure, thus paving the way for more widespread use ofgreen energy sources. Massachusetts Renewable Energy Trust The Massachusetts Renewable Energy Trust (MRET) was created as a component ofelectric utility industry restructuring to promote the development ofrenewable energy in the Commonwealth. As such, MRET seeks to maximize environmental and economic benefits for the Commonwealth's citizens by pioneering and promoting clean energy technologies and fostering the emergence ofsustainable markets for electricity generated from renewable sources. The Trustprovides financial assistance for development ofsolar, wind, biomass, and hydro projects. The goal is to generate the maximum economic and environmental benefits from clean energy resources to citizens ofthe Commonwealth. The Trust also provides critical supportto help the nascent renewable energy industry thrive and create newjobs in Massachusetts. Funding for MRET derives from a small charge on customers' electricity bills thatresults in $25M per year.

Sustainable Forest Bioenergy Initiative The Department ofEnergy Resources and the Department ofConservation and Recreation (our forestry agency) have identified biomass as arenewable energy resource with significant potential in Massachusetts. This initiative facilitates the development ofbiomass energy projects while maintaining the highest standards for sustainable forestry. The Initiative has established essential technical infonnation on the biomass resource, sustainable harvesting silviculture practices, and macroeconomic benefits that can form the basis ofsound biomass policy and market development. The initiative will supportmarket development ofbiomass harvesting supply infrastructure, biomass CHPprojects, and woodpelletproduction-and thennal boiler technologies for high efficiency, low emissions heating and cooling applications. Governor's Wind GoaJ: 2000 by 

### 2020 On January 13, 2009, GovernorPatrick announced a goal of2,000 MW ofwind energy installed inMassachusetts by 2020. This would provide enough power for 800,000 homes, meet 10% of the state's current electricity load, andreduce GHG emissions by 3.1 million tons, or roughly 12% ofemissions from powerplants today. Consultants for Mass. DOER estimate thatthere is approximately 1,500 MW oftechnical potential for onshore wind and over 6,000 MW offshore in Massachusetts. Included within this is approximately 947 MW ofpotential commercial scale wind energy on state-owned lands. Itwill take a careful balancing ofpublic interests to decide how much ofthe renewable energy potential ofthese sites on state land should be pursued. 10

### Commonwealth Wind The Massachusetts Renewable Energy Trust's (MRET) CommonwealthWind initiative will provide an overarching framework to expand investments for wind energy installations in Massachusetts. The three types ofprojects listed below could qualify for technical and/or financial assistance from MRET: 1. Commercial scale projects thatprimarily serve wholesale markets. 2. Community-scaleprojects in the 100 kW to approximately 2 MW range, where the project sponsor and primarybeneficiary is a private company or organization, amunicipality, or a government agency. 3. Small-scale projects under 100 kW serving residential, small commercial, or institutional buildings.-

Offshore Wind and the Oceans Act Offshore wind is the mostplentiful source ofrenewable energy in Massachusetts, and one ofthe most abundant sources inthe United States. The National Renewable Energy Laboratory (NREL) calculated approximately 900,000 MW ofpotential in offshore wind, and the US Department ofEnergy's recent "20% by 2030" report determined that 54,000 MW ofoffshore wind could be developed in the US by 2030 with currenttechnology, enough to meet 20 percent ofUS electricity demand. Consultants for DOER estimate thatthere is over 6,000 MW of technical potential in offshore wind in the state. Several other developers aside from EMI (Cape Wind) have proposed windprojects offthe coast ofMassachusetts, including Jay CashmanlPatriotRenewables (300 MW), The Town ofHull (12 MW), Blue H (floating platform**design~** 

### 420 MW), and Bluewater. The Commonwealth expects a significant increase inproposed projects once the federal and state regulatory regimes have been finalized. The Department of Interior's Minerals Management Service (MMS) recently released its final rule regarding renewable energy leasing on the outer continental shelf(three miles from shore andbeyond), while Massachusetts plans to complete the nation's first state ocean managementplan by December of2009. GovernorPatrick signed the Oceans Act in 2008, 2008 Mass. Acts Ch. 114, which mandates the creation ofthis comprehensive plan, which will identify locations in state waters other than the Cape Cod Ocean Sanctuary, offthe coast ofthe national seashore, for potential development of"appropriate-scale renewable energy facilities."

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