Massachusetts House Speaker Salvatore F. DiMasi will propose today the overhauling of key pieces of the state’s energy policy to reduce electricity demand and push communities to develop more energy-efficient and green projects, such as wind turbines.
The plan would also reorganize the state’s energy departments, merging four agencies into one under a Cabinet-level secretary of energy, who would oversee electricity rates, promote energy efficiency, develop a long-term energy plan, and choose sites for new energy facilities. Two agencies, the Department of Telecommunications and Energy and the Division of Energy Resources, would be eliminated under the new structure.
“Massachusetts is in the midst of an energy crisis, and complacency is not an option,” DiMasi told the Globe yesterday. “This plan creates the incentives and efficiencies we need to start both reducing demand and increasing supply.”
The secretary of energy would also set a five-year energy-reduction goal, DiMasi said. Cities and towns could then apply to become “green communities,” pledging to cut red tape to make it easier to build renewable energy projects such as wind turbines and to invest in energy efficiency.
In return, the state would give them the technical and financial assistance they need to do so.
The financial help would come in two ways. First, communities would receive financial and technical assistance from a $10 million to $20 million fund that electricity companies pay into to help meet renewable energy goals. The communities would also get seed money to build renewable projects and invest in energy efficiency through existing ratepayer surcharges. DiMasi’s staff said that not all money from the funds would go to communities, but did not have firm figures on how much.
Massachusetts, like many other states, requires an ever-increasing percentage of the electricity used in the state to come from new renewable energy projects such as wind and solar, with a goal of 4 percent by 2009. The market-based program requires companies that sell electricity to homeowners and businesses to buy a certain amount of green credits each year from new renewable plants in New England.
DiMasi wants his “green communities” to develop renewable energy to sell in that market, a financial incentive for them to build wind farms and other projects and keep the money local.
DiMasi also proposed a slew of smaller programs, such as a $1,500 tax credit for taxpayers who buy a hybrid or alternative fuel car and an extension of tax credits enacted last year for homeowners to buy energy efficient heating items and businesses to install solar water heating units.
DiMasi and his aides said they did not have many of the specifics of the plan worked out, such as how much money communities would get, how much energy demand should be reduced, and how much the overhaul would cost. DiMasi said he intends to file the Green Communities Act by the end of the year.
The proposal would probably not affect energy projects already in the pipeline, such as the offshore Cape Cod wind farm and three liquefied natural gas terminals or ports proposed in Fall River and off Gloucester.
DiMasi said he has discussed his plan with Governor-elect Deval Patrick, who pledged during the campaign to make Massachusetts a leader in renewable energy.
“I would absolutely like to work with him,” DiMasi said.
Patrick is putting together his own energy policy, said spokeswoman Cyndi Roy, who declined to comment on DiMasi’s proposal.
Massachusetts is faced with some of the highest electricity prices in the country, and energy demand is growing about 2 percent each year. Yet while most energy analysts agree that the state needs more energy projects, virtually every proposed project, from liquefied natural gas terminals to wind farms, faces fierce opposition from local residents.
DiMasi said yesterday that if the state can reduce its demand, it might delay the need to build more power plants in the future.
State Senator Michael W. Morrissey, chairman of the Senate Committee on Telecommunications, Utilities and Energy, said DiMasi’s plan is “headed in the right direction.”
“We have to either conserve heavily or add new generation,” he said. “Encouraging small producers to generate on site and and giving green credits may help us toward that end.”
Environmentalists said they welcomed an overhaul of the state’s energy regulatory structure, but said they wanted to know more about DiMasi’s plan. Some wondered whether taking money out of existing funds was a good idea.
“If someone has responsibility, bottom line, for the product of these agencies, that is good,” said Sue Reid, staff attorney for the Conservation Law Foundation, a Boston-based advocacy group. But, she said, “there might be better sources of funding that don’t require us to cannibalize the limited funds we have already set aside for projects.”
By Beth Daley and Andrea Estes, Globe Staff
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