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Law turning green energy into a municipal cash cow may crowd out those who were supposed to benefit  

Credit:  The Patriot Ledger, www.patriotledger.com 13 February 2011 ~~

There are details suggesting possible flaws in the system, but this much is certain: Kingston got while the getting was good.

Renewable energy contracts made possible by recent changes in state law mean Kingston is poised to add as much as $1 million to its $3.8 million annual budget.

It’s an astounding boost in revenue that has town leaders particularly tickled because it comes with minimal demands on town services. No need for more schools or police and no new roads to maintain.

It almost seems too good to be true.

To be sure, Kingston’s good fortune isn’t entirely unique. Changes in green energy laws have created huge potential for communities to cut power costs.

Carver is about to become the only community east of the Mississippi to have a solar array along a state highway. The Route 44 project could save the town millions over its lifetime by providing cheap power for municipal buildings.

Canton has even bigger plans. The town recently said it will turn its old landfill into the largest solar power generator in New England, something state energy officials are encouraging others to consider.

But what’s happening in Kingston is different.

As reported in a Commonwealth magazine story we recently published, Kingston not only arranged for construction of two wind turbines on its old landfill but also took advantage of a new law allowing a developer to build a turbine on private property and use the town as an intermediary to sell its power to a utility.

Because Kingston has agreed to act essentially as a broker, businesswoman Mary O’Donnell will get a higher rate for electricity she generates on her former sand and gravel pit. That’s because utilities pay more for power from municipalities than from private parties.

In the Commonwealth report, Kingston town counsel Lisa Mead described the deal in stark terms.

“The town is being used, to put it really bluntly, as a pass through,” she said. O’Donnell balks at the assessment, saying the deal is to the town’s advantage since it raises her property taxes.

That consideration was apparently enough to convince the town to accept – without financial records to prove it – O’Donnell’s contention that she wasn’t going to make enough money to give the town more than 1 percent of her profits. Requests for more documentation on financing might have led to a better deal for Kingston but, perhaps because everyone is making money, the town opted not to press the matter.

Kingston Selectman Mark Beaton is effusive about green energy’s potential as a municipal cash cow, saying if his town can do it, anyone can. But that’s not completely true.

Since utilities don’t have to buy such electricity after a certain threshold is met, it might be more accurate to say any town that acts quickly can do it. Those towns will indeed reap benefits, but at a potential cost to two groups.

One is ratepayers. Because utilities pass on the expense of buying green power, consumers in other communities pay more for electricity so people like O’Donnell and towns like Kingston get their money.

The other is homeowners.

The Green Communities Act of 2008 was promoted in part as a way to help them reduce the size of their electric bills. Those who installed their own turbines or solar panels could use what power they needed and sell the rest to their utility company. But if other towns rush to emulate Kingston, the threshold at which utilities no longer have to buy such power may quickly be hit, leaving homeowners out just as advances in technology are making it easier for them to be more self-sufficient.

The thought that public policy designed to enable this trend has morphed in a way that may instead give the upper hand to private developers is concerning.

Proponents may be right in painting deals such as Kingston’s as a win for everyone. Yet the speed at which these laws are evolving and the potential for unintended consequences make this issue worthy of more attention.

The governor – who has made green energy his rally cry – and the Legislature need to revisit this issue to make sure they haven’t created a law of diminishing returns.

Source:  The Patriot Ledger, www.patriotledger.com 13 February 2011

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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