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State looking to settle suit over law on clean energy

By Erin Ailworth
Globe Staff / May 27, 2010

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The state is trying to settle a lawsuit that challenges legislation at the heart of efforts by the Patrick administration to develop a clean energy industry in Massachusetts.

TransCanada Power, a Canadian energy company with operations in Westborough, sued five state officials in Worcester District Court in April, including the energy and environmental affairs secretary, Ian Bowles. The charges: that a state requirement that utilities negotiate long-term contracts to buy power from Massachusetts energy providers, as well as a new state incentive for local solar energy projects, both violate the Commerce Clause of the US Constitution by discriminating against out-of-state renewable energy producers.

The regulations, TransCanada wrote in its suit, are “unconstitutional, invalid, and unenforceable,’’ and affect the company’s ability to locally market electricity from outside sources. And that could mean higher energy prices for Massachusetts residents, it said.

Robert M. Buchanan Jr., the lead attorney in TransCanada’s case, declined to comment yesterday, as did Robert Keough, a spokesman for the state.

Angela O’Connor, president of the trade group New England Power Generators Association Inc., said it doesn’t make sense to insist that clean energy originate locally, because power is distributed on a broader scale.

“It’s a regional power grid,’’ she said. “You can’t put green food coloring on a Massachusetts electron.’’

In a filing last week that requested more time to respond to TransCanada’s suit, Attorney General Martha Coakley said the state is trying to negotiate a settlement. District Court Judge F. Dennis Saylor IV granted the state until June 21.

Seth Kaplan, a lawyer with the nonprofit Conservation Law Foundation, said he favors a quick settlement.

TransCanada, he pointed out, is questioning the very legislation that prompted utility company National Grid to sign a 15-year contract to buy electricity from the offshore project Cape Wind.

The contract — considered critical to win financing for Cape Wind — is being reviewed by the state Department of Public Utilities. To clear the way, National Grid asked that agency to suspend the regulations challenged by TransCanada.

Erin Ailworth can be reached at eailworth@globe.com.