The Honorable Therese Murray
State House, Boston
Dear President Murray,
On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association greatly appreciates your leadership and the great work of the Senate Committee on Ways and Means and the Joint Committee on Telecommunications, Utilities and Energy in advancing clean energy policies in Massachusetts. We are writing today to express our support for several provisions in S. 2200, An Act Relative to Competitively Priced Electricity in the Commonwealth, and to bring to your attention significant concerns regarding two provisions in the redrafted comprehensive energy legislation that will be taken up by the full Senate tomorrow.
The Green Communities Act, enacted in 2008 with the strong support of the MMA, has already delivered millions of dollars in benefits to communities and their residents through energy efficiency programs in municipal buildings and renewable energy projects. We began partnering with the Green Communities Division in the early days after passage of the Green Communities Act and continue to partner with them to provide forums and other opportunities to reach out to municipalities regarding the program.
Cities and towns across the Commonwealth are leading the nation in energy efficiency programing and renewable projects. In fact, 320 of 351 cities and towns now host solar facilities, and 74 communities have received the Green Communities designation. The grant program has benefitted a diverse group of communities in geographic region, size, and socio-economic status.
The MMA commends your bold work as Senate President, and the efforts of Senate Ways and Means Chair Stephen Brewer and Sen. Benjamin Downing as Senate chair of the Committee on Telecommunications, Utilities and Energy in drafting this comprehensive bill. As one of the largest energy consumers of electricity, cities and towns appreciate the comprehensive effort to enhance the Green Communities Act so that it will become a more cost-effective and efficient program for our communities. We look forward to working with you and your colleagues to strengthen the bill as it progresses to enactment.
In that regard, it is important to express our very strong concern with Section 15 of S. 2200, related to property tax exemptions for solar and wind renewable power systems, and ask for the opportunity to review and improve the language to protect cities and towns from the potential of significant revenue losses and disruption. Section 15 would provide an automatic personal property tax exemption for solar and wind renewable projects, and instead install a payment-in-lieu-of-taxes (PILOT) of 5 percent of the income generated from electricity sales. We understand that lobbyists for the industry are requesting consistency in anticipated assessments or PILOT agreements. We advise extreme caution, however, when it comes to any one-size-fits-all approaches.
With solar facilities in 320 communities, including at least 20 on municipal landfills, the language in Section 15 could certainly slash municipal revenue for many communities that have negotiated, collected and built these funds into their budgets, or are in the process of doing so. Further, the proposed PILOT formula excludes income that the project owners are collecting from federal and statutory subsidies that should be included in the income calculation. Without those inputs, the payments could be artificially low, benefitting the owners and shortchanging local taxpayers on all current or future projects. Within 24 hours of the language becoming public, one municipal executive from western Massachusetts estimated that his municipal revenue would be slashed by more than 90 percent, from $138,000 to just $9,000. We are in the process of surveying our membership to gather more information on the potential impact on cities and towns. In the meantime, we ask that you reconsider this provision, and work with municipal leaders to develop language that would protect local taxpayers and municipal budgets – and recognize that for many communities there is no reason to change current law.
We also would like to bring your attention Section 6, a provision that would prohibit the use of energy efficiency program resources to support compliance with federal or state building or energy codes. At least 74 communities in Massachusetts have become Green Communities and more than 105 cities and towns have adopted more stringent building or energy stretch codes. The stretch code requires a significantly higher level of energy efficiency than the Massachusetts base code, at more cost to the developer or property owner. It is also the most cost-effective approach to meeting our energy goals. Prohibiting the use of energy efficiency funds to assist with stretch code compliance, however, would undermine the most advanced energy code in the country and have a chilling effect on further participation in the Green Communities program. That is because it would actually hurt consumers, developers, homeowners, and business owners by denying access to utility rebates and incentives, as the stretch code would become the new base, and funds would only be available to finance improvements above the stretch code in Green Communities. Prohibiting such incentives would disadvantage Green Communities and stretch-code-compliant cities and towns. We ask that this section either be eliminated or be corrected.
We support Section 9 expanding the membership of the Energy Efficiency Advisory Council to include a representative from a municipality. Many communities have established local energy committees and have developed expertise and have intimate knowledge on the most effective local programs. The municipal representative will be a welcome addition to the advisory board.
We support Section 24 raising the net metering cap for government entities and municipalities from 2 percent to 3 percent, enabling more cities and towns to qualify for net metering. In order for the state to meet its energy goals and make additional solar projects feasible, however, the Department of Energy Resources may have to enlarge the Solar Carve Out program, which was an incentive for solar development.
We strongly support Section 38, which directs the Department of Public Utilities to adopt its rules and regulations regarding the assurance of net metering eligibility by October 2012. In the past, communities have faced uncertainty in financing projects because of eligibility issues, and this will help greatly to remove that issue.
Again, the MMA appreciates your leadership, and we reiterate our commitment to working with you and your colleagues to ensure passage of a strong bill that will enhance the Green Communities Act and protect cities, towns and taxpayers.
Thank you very much.
Geoffrey C. Beckwith
Executive Director, MMA