September 23, 2010

It’s also about the money

By Bruce Mohl, CommonWealth Magazine, 23 September 2010

The push and pull over wind turbine siting legislation in the Massachusetts Senate revolves around issues of policy and politics, but it’s also about money.

A little-noticed section of the bill expands a ratepayer subsidy for producing renewable energy and selling it to local utilities. It also extends that lucrative subsidy to a private wind power project in Kingston, a community represented in the Legislature by Senate President Therese Murray, who is pushing hard for the bill’s passage.

Murray has been engaged in an unusual public dance with the five Republicans in the Senate over the wind siting bill. The measure failed to win final enactment in the Senate as time ran out in the legislative session at the end of July. Since then, Murray has repeatedly tried to bring the bill to a final vote in informal sessions, where the objection of only one senator is needed to block action. Republican senators have taken turns objecting.

Instead of just conceding defeat, Murray has continued to push the legislation for political and policy reasons. Her spokesman says she is pushing for the bill because it garnered overwhelming support in the Legislature and shouldn’t die just because the Legislature ran out of time. Politically, she is demonstrating her resolve to Democratic supporters, showing she won’t give up on an important piece of green legislation. Likewise, Republicans are determined to block the bill because it is opposed by activists in western Massachusetts who fear a slew of wind turbines will be forced on their communities.

But there is a back story to the Senate fight that is equally intriguing. Murray’s support for the legislation would financially benefit a political supporter in her district who is trying to build a wind farm on private land in Kingston.

Kingston is a hotbed of green activity. The town wants to erect a two-megawatt wind turbine and install solar panels at a capped landfill. Mary O’Donnell, who owns a property adjacent to the landfill that used to be the site of a sand and gravel business, has proposed building four, two-megawatt turbines on her land.

Both projects are fully permitted, but O’Donnell needs a change in state law to make her project work financially. Under current law, only two megawatts of O’Donnell’s project would qualify for net metering, a subsidy that allows a renewable energy developer to sell power to the local utility and be paid the retail price of electricity (roughly 16 cents per kilowatt hour) instead of the wholesale price (roughly 6 to 9 cents). The difference in price – the effective subsidy – is picked up by all of the utility’s ratepayers as part of the distribution charge on their bills.

The original draft of the wind siting legislation didn’t address net metering, but a House-passed version of the bill included several provisions that would expand the subsidies. For example, the cap on renewable energy that qualifies for net metering was raised from 1 percent of a local utility’s peak load to 3 percent, with 1 percent reserved for private projects and 2 percent for municipal or state initiatives.

The House version of the bill did not raise the two-megawatt limit on private net metering projects, but it did change the definition of a municipal “net metering facility.” The bill defined a municipal facility as one that is owned or operated by the municipality or one that is located on government land and assigns 100 percent of its power output to the municipality.

O’Donnell was prepared to assign 100 percent of her power output to Kingston to qualify for net metering, but the project still didn’t qualify under the House language because it is located on private land.

The bill went to a joint House-Senate conference committee, where the provision requiring the project to be on municipal land was dropped. The change would essentially allow O’Donnell to put up all four wind turbines, assign the power to Kingston, and have all of the electricity qualify for net metering.

Details haven’t been worked out, but apparently O’Donnell would receive the income from net metering and share a portion of that income with the town.

Mark Beaton, a Kingston selectman, said building both the town and O’Donnell projects at the same time could save money on construction costs. He said the key for O’Donnell is winning net metering for her entire project.

It becomes very financially, you might say, attractive,” he said. “We’re blazing a trail here. The good thing she has going for her is that Therese Murray has bought into this.”

David Falcone, a spokesman for Murray, said the Senate president is pushing for the entire bill, not just the provision benefitting Kingston. “I understand the provision benefits Kingston, but it’s a benefit to any community that wants to move on similar projects,” Falcone said in an email. “The idea behind the language was to increase the available ceiling for projects. And with the language we would expect other projects to come along. And, yes, even without the net-metering provision, the bill still benefits a lot of other projects. Towns across the Commonwealth are waiting for this bill to get done.”

Rep. Barry Finegold, a Democrat from Andover who participated in the conference committee negotiations on the wind bill, said he didn’t recall specific discussions about the changes in the net metering provision. He said Rep. Thomas Calter, who represents Kingston, talked to him about the town’s renewable energy efforts but he never discussed it with Murray.

Both Murray and Calter have received a handful of political donations from O’Donnell. Murray has received three donations worth $1,200 since 2002 and Calter received two donations worth $300 this year, according to campaign finance records.

Finegold said the net metering provisions represent a minor portion of the overall bill, which attempts to streamline the permitting process for renewable energy projects. He said the net metering provisions were included to encourage the development of more renewable energy and the additional change was made in the conference committee so the projects could be everywhere and not just on public land.

Finegold said the ratepayer subsidy for net metering is a worthwhile investment in a greener future. “There is a cost to this, but in the long run there will be benefits,” he said.

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