New England Power Generators Association, Inc. v. Department of Environmental Protection

NOTICE: All slip opinions and orders are subject to formal

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SJC-12477

NEW ENGLAND POWER GENERATORS ASSOCIATION, INC., & others1 vs.

DEPARTMENT OF ENVIRONMENTAL PROTECTION & another.2

Suffolk. May 8, 2018. - September 4, 2018.

Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, &

Kafker, JJ.

Department of Environmental Protection. Environment, Air

pollution. Regulation. Administrative Law, Regulations.

Electricity.

Civil action commenced in the Superior Court Department on

September 11, 2017.

Following transfer to the Supreme Judicial Court for the

county of Suffolk, pursuant to G. L. c. 211, § 4A, the case was

reported by Budd, J.

Seth D. Jaffe (Stephen L. Bartlett also present) for the

plaintiffs.

Seth Schofield, Assistant Attorney General (Turner H.

Smith, Shannon S. Beale, & Joseph F. Dorfler, Assistant

Attorneys General, also present) for the defendants.

1 GenOn Energy, Inc.; and Footprint Power Salem Harbor

Development LP and Massachusetts Municipal Wholesale Electric

Company, interveners.

2 Executive Office of Energy and Environmental Affairs.

2

John A. DeTore, for Footprint Power Salem Harbor

Development LP, was present but did not argue.

Nicholas J. Scobbo, Jr., Ann Ryan Small, & Sherry L.

Vaughn, for Massachusetts Municipal Wholesale Electric Company,

submitted a brief.

David K. Ismay, for Conservation Law Foundation, amicus

curiae, submitted a brief.

KAFKER, J. Its name bespeaks its ambitions. The Global

Warming Solutions Act, St. 2008, c. 298 (act), was passed to

address the grave threats that climate change poses to the

health, economy, and natural resources of the Commonwealth. See

Massachusetts v. Environmental Protection Agency, 549 U.S. 497,

521-522 (2007); Kain v. Department of Envtl. Protection, 474

Mass. 278, 281-282 (2016). The act is designed to make

Massachusetts a national, and even international, leader in the

efforts to reduce the greenhouse gas emissions that cause

climate change. Id. at 281. It thus establishes significant,

"ambitious," legally binding, short- and long-term restrictions

on those emissions. G. L. c. 21N, §§ 3, 4. See Executive Order

No. 569 (Sept. 16, 2016).

The plaintiffs, New England Power Generators Association,

Inc., and GenOn Energy, Inc., contend that a key provision,

G. L. c. 21N, § 3 (d) (§ 3 [d]), which directs the Department of

Environmental Protection (department) to promulgate regulations

establishing declining annual aggregate emission limits for

sources that emit greenhouse gas emissions, does not apply to

3

the electric sector, because that sector is specifically

regulated by a separate provision, G. L. c. 21N, § 3 (c)

(§ 3 [c]). Consequently, the plaintiffs assert that the

department and the Executive Office of Energy and Environmental

Affairs (executive office) (collectively, agencies) exceeded

their authority in promulgating 310 Code Mass. Regs. § 7.74

(2017) (Cap Regulation),3 which imposes declining greenhouse gas

emissions limits on the in-State electric sector through 2050.

Furthermore, the plaintiffs allege that the Cap Regulation will

increase, rather than decrease, Statewide emissions. Lastly,

the plaintiffs argue that, even if the Cap Regulation is valid,

the "sunset provision" of the act prohibits additional § 3 (d)

regulations after December 31, 2020. We conclude that none of

these arguments is meritorious and, accordingly, uphold the Cap

Regulation.4

1. Background. "The act was developed against the

backdrop of an emerging consensus shared by a majority of the

scientific community that climate change is attributable to

increased [greenhouse gas] emissions, as well as perceptions in

the Commonwealth that national and international efforts to

3 In August, 2018, the Department of Environmental

Protection (department) amended 310 Code Mass. Regs. § 7.74 (Cap

Regulation). Those amendments do not affect the present case.

4 We acknowledge the amicus brief submitted by Conservation

Law Foundation.

4

reduce those emissions are inadequate." Kain, 474 Mass. at 281.5

"The act established a comprehensive framework to address the

effects of climate change in the Commonwealth by reducing

emissions to levels that scientific evidence had suggested were

needed to avoid the most damaging impacts of climate change."

Id. at 281-282.

The act's sequenced and specific design sets out interim

benchmarks to map out the course toward meeting the 2050

Statewide emissions limit goal. First, the act directs the

department to determine the calendar year 1990 Statewide

greenhouse gas emissions level and then to project the "2020

business as usual" level -- "the statewide greenhouse gas

emissions level . . . if no measures are imposed to lower

emissions." G. L. c. 21N, § 3 (a).6 Second, the act requires

that the Commonwealth reduce its Statewide greenhouse gas

5 The Global Warming Solutions Act (act) defines "greenhouse

gas" as "any chemical or physical substance that is emitted into

the air and that the department may reasonably anticipate will

cause or contribute to climate change including, but not limited

to, carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,

perfluorocarbons and sulfur hexafluoride." G. L. c. 21N, § 1.

6 The 1990 baseline was determined to be 94 million metric

tons of carbon dioxide equivalent, of which 25.6 million was

associated with electric generation. See Department of

Environmental Protection, Statewide Greenhouse Gas Emissions

Level: 1990 Baseline and 2020 Business as Usual Projection, at

4 (July 1, 2009), https://www.mass.gov/files/documents/2016

/08/or/1990-2020-final.pdf [https://perma.cc/CN6Y-HGGX]. The

2020 "business as usual" projection was also estimated to be 94

million metric tons of carbon dioxide. Id. at 5.

5

emissions by at least eighty per cent below the 1990 level by

2050.7 G. L. c. 21N, § 3 (b). The act also mandates that

interim Statewide emissions limits for 2020, 2030, and 2040 be

adopted and accompanied by plans for implementation. Id.

Third, the act requires that the executive office update its

implementation plans and publish interim progress reports every

five years. G. L. c. 21N, §§ 4 (h), 5. Fourth, the act directs

the department to adopt regulations to require the reporting and

verification of Statewide greenhouse gas emissions and to

triennially publish an inventory estimating the past three

years' Statewide emissions. G. L. c. 21N, § 2 (a)-(c).

The act defines "Statewide greenhouse gas emissions" as

"the total annual emissions of greenhouse gases in the

[C]ommonwealth," including "all emissions of greenhouse gases

from the generation of electricity delivered to and consumed in

the [C]ommonwealth," even if that electricity is produced

elsewhere. G. L. c. 21N, § 1. Massachusetts is served by a

regional electric power grid that includes six States and is

interconnected with the regional grids of New York and two

Canadian provinces.

Most relevant to the instant case, the act also empowers

the department, in consultation with the executive office and

7 The 2050 Statewide emissions limit would thus be under 19

million metric tons of carbon dioxide equivalent.

6

the Department of Energy Resources, to set "[e]missions levels

and limits associated with the electric sector, . . . based on

consumption and purchases of electricity from the regional

electric grid, taking into account the regional greenhouse gas

initiative and the renewable portfolio standard"8 and directs the

department to promulgate regulations establishing "declining

annual aggregate emission limits for sources or categories of

8 The regional greenhouse gas initiative (RGGI) is the

nation's first mandatory market-based program to reduce

emissions of carbon dioxide. Participating States have

established a regional cap on carbon dioxide emissions from the

electric sector and require their respective in-State power

plants to possess a tradable carbon dioxide allowance for each

ton of carbon dioxide they emit. The RGGI cap declines 2.5 per

cent each year from 2017 to 2020.

The RGGI is related to but distinct from the Cap

Regulation. The RGGI controls greenhouse gas emissions across

the nine States that participate in the RGGI, but does not

restrict emissions in any particular State. See The Regional

Greenhouse Gas Initiative, Elements of RGGI, https://www.rggi

.org/program-overview-and-design/elements [https://perma.cc

/M59X-JV25]. The Cap Regulation controls emissions of

electricity-generating facilities in Massachusetts, but not in

other States. See Department of Environmental Protection, Fact

Sheet: Electricity Sector Regulations, http://www.massdep.org

/BAW/air/3dfs-electricity.pdf [https://perma.cc/PVD2-ESAU].

Predating the RGGI, the renewable energy portfolio standard

(RPS) was established in 1997. See G. L. c. 25A, § 11F,

inserted by St. 1997, c. 164, § 50; 225 Code Mass. Regs.

§§ 14.00, 15.00 (2016). The RPS requires that retail suppliers

of electricity deliver a certain percentage of the electricity

generated from renewable energy sources such as wind, solar, and

hydroelectric. Renewable energy produced by generators that

qualify for the RPS counts toward compliance with 310 Code Mass.

Regs. § 7.75 (2017) (Clean Energy Standard Regulation),

discussed infra. See Department of Environmental Protection,

Fact Sheet: Electricity Sector Regulations, supra.

7

sources that emit greenhouse gas emissions." G. L. c. 21N,

§ 3 (c), (d).9

Prior to our decision in Kain, the department relied

significantly on the Commonwealth's membership and efforts

through the regional greenhouse gas initiative (RGGI),

particularly its "cap and trade program for electricity-

generating facilities," to satisfy the requirements of § 3 (d).

See Kain, 474 Mass. at 296-297. As a participant of the RGGI,

the Commonwealth "established the carbon dioxide budget trading

program, which incorporat[ed] the RGGI scheme into its

regulations and contain[ed] a schedule of the Commonwealth's

annual 'base budget' . . . of carbon dioxide." Id. at 296.

In Kain, 474 Mass. at 280, we concluded that the department

had not fulfilled its statutory mandate under § 3 (d). With

respect to the electric sector, we reasoned that "although the

RGGI program . . . [was] very important to the over-all regional

scheme," it was established under a statute entirely separate

from the act. Id. at 296. Furthermore, emission reductions

from the RGGI regulation were already accounted for in the

eighteen per cent reduction in emissions anticipated under the

2020 "business as usual" level. Id. at 296-297. Additionally,

9 Relatedly, the act also directs that the Commonwealth and

its agencies promulgate regulations that "encourage renewable

sources of energy in the sectors of energy generation, buildings

and transportation." G. L. c. 21N, § 6.

8

given that in-State power plants could purchase carbon dioxide

allowances from generators in other RGGI-participating States,

there was no way to ensure mass-based reductions in carbon

dioxide emissions. Id. at 297-298. Accordingly, we ordered the

department to "promulgate regulations that establish volumetric

limits on multiple greenhouse gas emissions sources, expressed

in carbon dioxide equivalents, and . . . such limits must

decline on an annual basis." Id. at 280.

On September 16, 2016, approximately four months after Kain

was decided, the Governor issued Executive Order No. 569, titled

"Establishing an Integrated Climate Change Strategy for the

Commonwealth." The order, in part, directed the department to

promulgate final regulations by August 11, 2017, that satisfy

§ 3 (d) and that ensure that the Commonwealth meets the 2020

Statewide emissions limit mandated by the act. Twelve days

later, on September 28, 2016, the department began seeking input

on proposed regulations of emission sources from stakeholders,

including scheduling technical meetings for electricity sector

stakeholders. During these meetings, the department considered

establishing a declining greenhouse gas emissions cap for

Massachusetts power plants, effective from 2018 through 2050,

later proposed as 310 Code Mass. Regs. § 7.74, the Cap

Regulation. The department also weighed establishing a clean

energy standard, which would require an increasing percentage of

9

new clean energy to Massachusetts from retail suppliers; this

standard was later proposed as 310 Code Mass. Regs. § 7.75 (CES

Regulation).

On August 11, 2017, after consultation with the Department

of Energy Resources, the agencies published the final Cap

Regulation pursuant to §§ 3 (c), (d); the final CES Regulation

pursuant to § 3 (c); and four additional complementary

regulations, pursuant to § 3 (d). Starting from a 2018

aggregate carbon dioxide emissions limit of 9,149,979 metric

tons, the Cap Regulation mandated that in-State fossil-fueled

power plants decrease their emissions by 223,876 metric tons

each year until the emissions reach 8,507,299 metric tons in

2020 and 1,791,019 metric tons in 2050. 310 Code Mass. Regs.

§ 7.74(5)(a). Complementing the Cap Regulation's reduction on

emissions, the CES Regulation established an increasing level of

clean nonemitting electricity that retail sellers must purchase

annually. See 310 Code Mass. Regs. § 7.75(4). In 2018, the

requirement was sixteen per cent. Id. By 2050, a minimum of

eighty per cent of retail electricity sold to Massachusetts

customers will be from clean energy sources. Id.

On September 11, 2017, the plaintiffs filed their complaint

in the Superior Court for judicial review of the agencies'

10

rulemaking, pursuant to G. L. c. 30A.10 The plaintiffs' key

contention was that the agencies acted unlawfully in

promulgating the Cap Regulation. While the case was pending in

the Superior Court, on January 31, 2018, a single justice of

this court, pursuant to G. L. c. 211, § 4A, transferred the case

to the county court. On February 9, 2018, the single justice

reserved and reported the case to the full court for

determination.

2. Discussion. a. Statutory authority to regulate

greenhouse gas emission levels and limits associated with

electric sector. As previously stated, § 3 (d) of the act

provides that "[t]he department shall promulgate regulations

establishing a desired level of declining annual aggregate

emission limits for sources or categories of sources that emit

greenhouse gas emissions." The preceding section, § 3 (c),

provides that "[e]missions levels and limits associated with the

electric sector shall be established by the executive office and

the department, in consultation with the department of energy

resources, based on consumption and purchases of electricity

10Subsequently, Footprint Power Salem Harbor Development LP

and Massachusetts Municipal Wholesale Electric Company

successfully moved to intervene as plaintiffs. In addition to

the plaintiffs in the present case, Calpine Corporation also

filed a complaint in the Superior Court seeking review of the

Cap Regulation, and that case was consolidated with this one.

Calpine Corporation's case was thereafter resolved in the

Superior Court and is not before us in this appeal.

11

from the regional electric grid, taking into account the

regional greenhouse gas initiative and the renewable portfolio

standard." At issue in the instant case is the Cap Regulation,

which establishes annually declining aggregate carbon dioxide

emissions limits on electricity generating facilities located in

the Commonwealth, pursuant to § 3 (d). See 310 Code Mass. Regs.

§ 7.74(1).

The plaintiffs argue that the agencies may not impose an

emissions cap on electricity generators under § 3 (d), because

§ 3 (c) specifically and separately regulates the electric

sector. The agencies counter that although § 3 (c) sets out

specific procedures and requirements for regulation of the

electric sector, it does not prohibit the department from

imposing a declining emissions cap on that sector pursuant to

§ 3 (d), as long as the limits satisfy the requirements of

§ 3 (c). We conclude that § 3 (c) and § 3 (d) complement each

other, and that the electric sector is one of the multiple

categories of sources of emissions that may be regulated under

§ 3 (d). Furthermore, the department's determination that it

must impose decreasing emissions limits on the electric sector

in order to accomplish its essential statutory purpose is amply

supported.

"In assessing the legality of an administrative agency's

properly promulgated regulations, we employ sequentially two

12

well-defined principles. First, we determine, using

conventional tools of statutory interpretation, whether the

Legislature has spoken with certainty on the topic in question,

and if we conclude that the statute is unambiguous, we give

effect to the Legislature's intent" (footnoted omitted).

Goldberg v. Board of Health of Granby, 444 Mass. 627, 632-633

(2005). "Second, if the Legislature has not addressed directly

the pertinent issue, we determine whether the agency's

resolution of that issue may 'be reconciled with the governing

legislation.'" Id. at 633, quoting Nuclear Metals, Inc. v. Low–

Level Radioactive Waste Mgt. Bd., 421 Mass. 196, 211 (1995). At

the second stage, we afford "substantial deference" to agency

expertise, and will uphold a challenged regulation "unless a

statute unambiguously bars the agency's approach." Goldberg,

supra, quoting Briggs v. Commonwealth, 429 Mass. 241, 253

(1999).

Taking these considerations together, we conclude that the

agencies have the authority to promulgate regulations under

§ 3 (d) to establish emission limits on the electric sector,

and, as detailed below, our interpretation is consistent with

the act's fundamental purpose of reducing greenhouse gas

emissions, and combatting climate change, in Massachusetts.

Kain, 474 Mass. at 300. Furthermore, to the extent, if any,

that the act is ambiguous, we conclude that the agencies'

13

interpretation is reasonable and entitled to deference.11 The

act certainly does not "unambiguously bar[] the agenc[ies']

approach." Goldberg, 444 Mass. at 633.

The electric sector's transition away from fossil fuels is

critical to reaching the sustainable future that the act

envisions. Presently, the electric sector accounts for

approximately twenty per cent of Statewide greenhouse gas

emissions. See MA GHG Emissions Trends, MA GHG by Sector,

https://www.mass.gov/service-details/ma-ghg-emission-trends

[https://perma.cc/2F4B-M5RE]. Given that the electric sector is

one of the largest in-State greenhouse gas emission sources, it

would make little to no sense for the Legislature to have

excluded it from the critical emission reduction requirements

set out in § 3 (d). There is also no express exclusion of the

electric sector from § 3 (d). Furthermore, in order to achieve

its goal of reducing emissions by at least eighty per cent by

11The plaintiffs' argument that the agencies'

interpretation of the act is not entitled to deference because

the act is outside their sphere of expertise is unavailing. See

Kain v. Department of Envtl. Protection, 474 Mass. 278, 286, 292

(2016) ("the department and the [S]ecretary [of Energy and

Environmental Affairs (secretary)] have considerable expertise

in addressing the challenges that climate change poses to the

Commonwealth"). See also St. 2008, c. 298, §§ 3, 4 (directing

department and secretary to implement act); Dowling v. Registrar

of Motor Vehicles, 425 Mass. 523, 525 (1997), quoting

Massachusetts Medical Soc'y v. Commissioner of Ins., 402 Mass.

44, 62 (1988) ("an administrative agency's interpretation of a

statute within its charge is accorded weight and deference").

14

2050, "the Commonwealth must achieve a significant reduction in

[greenhouse gas] emissions from transportation, the heating of

buildings, and the electric sector. Because a significant

percentage of vehicles and building systems must be electrified

as a way to reduce [greenhouse gas] emissions," cutting

emissions from the electric sector is a crucial initial step to

achieving long-term progress in combatting climate change. See

Executive Office of Energy and Environmental Affairs &

Department of Environmental Protection, Response to Comment on:

310 Code Mass. Regs. § 7.74, at 13 (Aug. 2017).

The importance of decreasing greenhouse gases from the

electric sector is particularly apparent when the act's

fundamental purpose to "attain actual, measurable, and permanent

emissions reductions in the Commonwealth" is considered in the

context of § 3 (c), including § 3 (c)'s emissions limits and

consideration of trade allowances. Kain, 474 Mass. at 300. See

Commonwealth v. Diggs, 475 Mass. 79, 83 (2016) (rejecting

interpretation that would thwart statute's intended purpose).

As we recognized in Kain, supra at 297-298, "there is no way to

ensure mass-based reductions in carbon dioxide emissions from

power plants in the Commonwealth that participate in the RGGI,"

because they can purchase emission allowances from out-of-State

generators. Id. at 297-298. Additionally, "reductions from the

RGGI regulation were [already] accounted for in the eighteen per

15

cent reduction in emissions anticipated under the 'business as

usual' projection calculated prior to the application of

regulations under § 3 (d)." Id. at 297. The RGGI regulatory

regime regarding the electric sector is therefore not alone

sufficient to satisfy the purposes of the act. The act is

designed to go well beyond business as usual in terms of

reducing emissions: to upend, rather than to uphold, the status

quo. The electric sector is no exception.

Section 3 (d) places no restriction on the categories of

emissions sources that the department may regulate. Kain, 474

Mass. at 284 n.9, 290-291. In Kain, we did observe that "the

Legislature intended to treat emission reductions associated

with the electric sector differently from reductions in other

sectors of the economy." Id. at 297. This is because there are

considerations specific to the electric industry to take into

account, particularly the regional grid, the RGGI framework, and

the renewable energy portfolio standard (RPS); additionally, the

department, in regulating the electric sector, must consult with

the Department of Energy Resources and the executive office.

G. L. c. 21N, § 3 (c). Differential treatment of the electric

sector, however, does not indicate its exclusion from § 3 (d).

"Specific statutory authority to act in a particular respect

does not bar consistent action under general statutory

authority." Grocery Mfrs. of Am., Inc. v. Department of Pub.

16

Health, 379 Mass. 70, 76 (1979). See Pepin v. Division of

Fisheries & Wildlife, 467 Mass. 210, 224-226 (2014) (statute

creating requirements for certain types of endangered species'

habitats did not preclude agency from promulgating regulations

to further general goal of protecting endangered species).

The department promulgated the Cap Regulation pursuant to

§ 3 (c)'s requirements; the department consulted with the

executive office and the Department of Energy Resources,

considered energy consumption from the regional grid, and

analyzed how the Cap Regulation would interact with RGGI and the

RPS. See 310 Code Mass. Regs. § 7.74(1) (Cap Regulation

promulgated by department and executive office "following

consultation with the Department of Energy Resources and based

on the considerations specified in . . . § 3 [c]"). The Cap

Regulation properly takes into account the specific

considerations of the electric sector identified in section

§ 3 (c), while including this large emitter of greenhouse gases

in the ambitious emissions reduction regime of § 3 (d), which is

central to accomplishing the act's overarching purpose. The two

statutory provisions work together and complement each other.

They are not mutually exclusive.

In sum, we conclude that § 3 (d) does not contain a

regulatory exclusion for the electric or any sector, and we

decline to read one in. "If that was the legislative intent,

17

the wording of the statute could have easily reflected it. It

does not" (footnote omitted). Rowley v. Massachusetts Elec.

Co., 438 Mass. 798, 802 (2003). The agencies' interpretation of

how § 3 (c) and (d) may be construed together, is also

reasonable, and therefore, entitled to deference. See Dowling

v. Registrar of Motor Vehicles, 425 Mass. 523, 525 (1997). See

also Pepin, 467 Mass. at 222, quoting Entergy Nuclear Generation

Co. v. Department of Envtl. Protection, 459 Mass. 319, 331

(2011) ("[A] regulation . . . need not necessarily find support

in a particular section of [the enabling statute]; it is enough

if it carries out the scheme or design of the chapter and is

thus consistent with it"). Because the Cap Regulation satisfies

the requirements of both § 3 (c) and § 3 (d), the plaintiffs'

argument that the regulation is ultra vires must fail.

b. Validity of 310 Code Mass. Regs. § 7.74. The

plaintiffs contend that, even if the agencies are permitted to

regulate the electric sector under § 3 (d), the projected

effects of the Cap Regulation render it arbitrary and capricious

and inconsistent with the statutory purpose of reducing

emissions. A properly promulgated regulation "has the force of

law . . . and must be accorded all the deference due to a

statute." Borden, Inc. v. Commissioner of Pub. Health, 388

Mass. 707, 723, cert. denied sub nom. Formaldehyde Inst., Inc.

v. Frechette, 464 U.S. 936 (1983). A party challenging the

18

validity of a regulation must prove "that the regulation is

illegal, arbitrary, or capricious." Id. at 722. Such a

plaintiff must establish "the absence of any conceivable grounds

upon which [the rule] may be upheld." Purity Supreme, Inc. v.

Attorney Gen., 380 Mass. 762, 776 (1980), quoting Colella v.

State Racing Comm'n, 360 Mass. 152, 156 (1971). "That burden

cannot be carried 'by arguing that the record does not

affirmatively show facts which support the regulation.'" Dowell

v. Commissioner of Transitional Assistance, 424 Mass. 610, 612

(1997), quoting Purity Supreme, Inc., supra. Rather, "we must

apply all rational presumptions in favor of the validity of the

administrative action and not declare it void unless its

provisions cannot by any reasonable construction be interpreted

in harmony with the legislative mandate." Consolidated Cigar

Corp. v. Department of Pub. Health, 372 Mass. 844, 855 (1977).

However, "a regulation that is irreconcilable with an agency's

enabling legislation cannot stand." Quincy v. Massachusetts

Water Resources Auth., 421 Mass. 463, 468 (1995).

Here, the plaintiffs build their case around the

possibility that the Cap Regulation may cause modest emissions

leakage. "Leakage," as defined in G. L. c. 21N, § 1, is "the

offset of a reduction in emissions of greenhouse gases within

the [C]ommonwealth by an increase in emissions of greenhouse

gases outside the [C]ommonwealth." The plaintiffs contend that

19

generators within Massachusetts will produce less electricity in

response to costs imposed by the Cap Regulation; as a result,

Massachusetts will import more electricity from higher-emitting

generators outside the State. Because the act directs the

agencies to reduce Statewide emissions -- which includes

greenhouse gases associated with the out-of-State production of

electricity consumed in the Commonwealth -- the plaintiffs argue

that this leakage runs contrary to the act's purpose. See G. L.

c. 21N, § 1.

There are, however, multiple conceivable bases to support

the rule. See Massachusetts Fed'n of Teachers, AFT, AFL-CIO v.

Board of Educ., 436 Mass. 763, 772 (2002). First, the Cap

Regulation seeks to reduce emissions generated within the

Commonwealth. As a recent baseline, in 2014, approximately

14,900,000 metric tons of carbon dioxide emissions was

associated with the electric sector. The Cap Regulation sets

forth a declining emissions limit from 9,149,979 metric tons of

carbon dioxide in 2018 to 8,507,299 metric tons of carbon

dioxide in 2020. See 310 Code Mass. Regs. § 7.74(5)(a). For

the purposes of long-term planning and forecasting, the Cap

Regulation also sets forth the long-term goal for emissions

generated within the Commonwealth of 1,791,019 metric tons of

20

carbon dioxide in 2050.12

Additionally, as the agencies contend, the Cap Regulation's

impact cannot be analyzed in a vacuum. Indeed, it was

promulgated in concert with the CES Regulation, and the two

rules were expressly "designed to work together to maximize the

reduction of greenhouse gas emissions."13 See Summary of

Regulations: 310 Code Mass. Regs. §§ 7.74, 7.75 (attachment to

filing entry form for final regulation). The CES Regulation

requires retail electricity providers to procure an increasing

percentage of electricity from clean energy sources each year.

See 310 Code Mass. Regs. § 7.75(4). Because of the emissions

reductions that will occur as a result of the CES Regulation,

the agencies predict that the Cap Regulation's limit on

greenhouse gases will be met without any decrease in production

12Additionally, with the statutory scheme imposing lower

emission limits over time, the Legislature was aware that some

leakage was inevitable; indeed, the regulations must be

evaluated to determine whether they minimize leakage. See G. L.

c. 21N, § 5 (vii). Here, even if the plaintiff's modeling is

taken at face value, the most severe leakage projection would

constitute less than one per cent of total New England

greenhouse gas emissions in the one year, 2025, modeled. Some

doubts as to whether leakage may occur need not prevent the

department from acting to ensure that the electric sector is

working towards the act's purpose. See Borden, Inc. v.

Commissioner of Pub. Health, 388 Mass. 707, 734 (1983).

13The plaintiffs, notably, do not take a position or

contest the agencies' position that the Cap Regulation and 310

Code Mass. Regs. § 7.75, working together, would reduce

greenhouse gas emissions.

21

by Massachusetts fossil fuel generators. They predict that, as

a result, little or no leakage will occur, because it will be

unnecessary to shift to out-of-State producers in order to

comply with the Cap Regulation.

Furthermore, even if the Cap Regulation does result in an

increase in electricity imports, the agencies project that an

increasing percentage of those imports will be derived from

zero-emission sources, in part due to the CES Regulation's

mandate that the Commonwealth consume greater percentages of

clean energy each year.14 Finally, far from causing increased

greenhouse gas emissions from out-of-State generators, according

to the agencies, the two regulations together will send a market

signal that Massachusetts' neighbors should invest in clean

energy development in order to satisfy the Commonwealth's

increasing demand for renewable energy. To the extent that the

agencies' projections rely on their own interpretations of these

14Additionally, because renewable resources have virtually

no operating costs and generators can submit very low bids into

the hourly wholesale electricity markets, clean energy resources

will be dispatched first. Even if the Cap Regulation imposes a

constraint on in-State power plants, it is mere speculation that

out-of-State electric suppliers will necessarily generate higher

rates of greenhouse gas emissions, especially given that other

States have similarly committed to ambitious targets for

reductions of greenhouse gas emissions. See, e.g., Conn. Gen.

Stat. § 22a-200a (eighty per cent reduction of greenhouse gas

emissions below 2001 level by 2050); R.I. Gen. Laws § 42-6.2-2

(eighty per cent reduction of greenhouse gas emissions below

1990 levels by 2050).

22

regulations, they are entitled to deference. Biogen IDEC MA,

Inc. v. Treasurer & Receiver Gen., 454 Mass. 174, 184 (2009).

In sum, the plaintiffs are far from showing "the absence of any

conceivable grounds upon which [the rule] may be upheld."

Massachusetts Fed'n of Teachers, AFT, AFL-CIO, 436 Mass. at 772,

quoting Purity, Supreme, Inc., 380 Mass. at 776.

c. Regulations promulgated under G. L. c. 21N, § 3 (d),

beyond December 31, 2020. Section 16 of the act provides that

"[t]he department . . . shall promulgate regulations pursuant to

[§ 3 (d)] not later than January 1, 2012, which regulations

shall take effect on January 1, 2013, and shall expire on

December 31, 2020." The plaintiffs contend that § 16 of the act

clearly and unambiguously invalidates any emission limits beyond

December 31, 2020, because the provision contains an

"unambiguous sunset date" for § 3 (d). We disagree. The most

sensible reading of § 16 is that, after December 31, 2020, only

the current regulations promulgated under § 3 (d) expire. The

Department's authority and obligation to promulgate new

regulations under § 3 (d) after December 31, 2020, is

undisturbed. See Kain, 474 Mass. at 289 n.14 ("sunset provision

exists because after 2020, new annual limitations on emissions

would have to be issued to ensure that Statewide limit for 2030,

which has yet to be established, will be met").

"The court does not determine the plain meaning of a

23

statute in isolation" but rather in "consideration of the

surrounding text, structure, and purpose of the Massachusetts

act" from which this subsection is derived (citation omitted).

ENGIE Gas & LNG LLC v. Department of Pub. Utils., 475 Mass. 191,

199 (2016). "Moreover, our interpretation of statutes is not

restricted to determining only their 'simple, literal or strict

verbal meaning' but also considers their 'development, their

progression through the legislative body, the history of the

times, prior legislation, contemporary customs and conditions

and the system of positive law of which they are part . . . ."

Kain, 474 Mass. at 286, quoting Oxford v. Oxford Water Co., 391

Mass. 581, 588 (1984).

First, § 16 of the act's surrounding text and structure is

instructive. Nestled within §§ 10-18, this section is focused

on implementation deadlines, not termination. Kain, 474 Mass.

at 283, citing St. 2008, c. 298, §§ 10-18 ("The design of the

act is synergistic, imposing numerous directives and timelines

on the [S]ecretary [of Energy and Environmental Affairs] and the

department to perform certain duties, subject to deadlines.").

Second, the act's purpose is of crucial importance. The long-

term goal of the act is to ensure that the Commonwealth meets

the 2050 Statewide emission limit of at least eighty per cent

below the 1990 level. See G. L. c. 21N, § 3 (b). But to set

the Commonwealth on a course to meet this limit, the year 2020,

24

as the first and nearest short-term goal, is of special

importance. See, e.g., G. L. c. 21N, §§ 3 (a), (b), 4;

Secretary of Energy and Environmental Affairs, Massachusetts

Clean Energy and Climate Plan for 2020, at 12 (updated Dec. 31,

2015), https://www.mass.gov/files/documents/2017/12/06/Clean%20

Energy%20and%20Climate%20Plan%20for%202020.pdf [https://perma.cc

/VWG2-PKQP]. It is a crucial step along the way, but not a

termination point in any sense. The existing regulations will

sunset but will be replaced by new regulations taking into

account updated information. To hold that the ability to set

declining annual aggregate emission limits under § 3 (d)

permanently expires would create an absurd result: a long-term

2050 Statewide emissions goal without, after December 31, 2020,

any tools to reach it. See Flemings v. Contributory Retirement

Appeal Bd., 431 Mass. 374, 375-376 (2000) ("If a sensible

construction is available, we shall not construe a statute to

make a nullity of pertinent provisions or to produce absurd

results").

We conclude that the Legislature did not intend to render

§ 3 (d) meaningless after December 31, 2020. Rather, the

department was expected and required to promulgate new

regulations at that time, based on updated information, to

ensure that the future Statewide limits for 2030, 2040, and 2050

will be met. See Kain, 474 Mass. at 289 n.14 ("after 2020, new

25

annual limitations on emissions would have to be issued").

3. Conclusion. For the reasons discussed, we conclude

that the department has the authority to promulgate regulations

under § 3 (d) to establish emission limits on the electric

sector. We also conclude that the Cap Regulation was properly

promulgated, has the force of law, and must be accorded all the

deference due to a statute. Finally, we conclude that § 3 (d)

remains in effect after December 31, 2020, and that the

department shall promulgate new regulations to ensure that the

interim and 2050 Statewide limits will be met.

We remand the matter to the single justice of the county

court, where an order of remand to the Superior Court shall

issue for further proceedings consistent with this opinion.

So ordered.