August 18, 2012
Massachusetts

Energy bill, minus one provision, gets Whately’s approval

By KATHLEEN McKIERNAN, Gazette Contributing Writer | Daily Hampshire Gazette | www.gazettenet.com 17 August 2012

WHATELY – Two hours’ drive from Beacon Hill, where Gov. Deval Patrick signed a new energy bill recently, Whately town officials were releasing a sigh of relief.

The bill was intended to reduce the cost of electricity, provide savings for consumers, encourage business expansion and promote the goals of the 2008 Green Communities Act.

But what the Select Board found most significant is what was omitted from the bill: a provision in the original House version that many cities and towns believed would have stripped their ability to tax solar and wind farms. The final bill was negotiated by a House and Senate committee with the local taxing authority intact.

The Massachusetts Municipal Association led the battle against earlier versions of the bill that would have exempted energy facilities from local property taxes and instead have communities collect a much lower payment-in-lieu-of-tax, equal to 5 percent of electricity sales. In a letter sent to the House on June 25, the MMA argued the provision would revoke the flexibility of cities and towns to negotiate with solar and wind energy companies.

Learning of the provision, Selectman Joyce Palmer Fortune led the town’s effort to block it, sending letters to state Rep. Stephen Kulik, D-Worthington, and state Sen. Stanley Rosenberg, D-Amherst.

Palmer Fortune said the provision would have also taken away the town’s ability to tax on the local level and put it in the state’s control.

“When the state takes away the meager amount that we are allowed to tax, it has been our experience that they do not follow through with a compensating payment of local aid, so that we either need to cut back on needed infrastructure investments or drive real estate taxes out of reach of fixed-income folks in order to maintain the bare-bones town government services that we have presently,” she said.

The property tax solar and wind farms pay to towns is based on how much electricity they can produce. No matter how much energy is used, the tax bill is constant. The eliminated provision would have based the tax rate on the rate of production or how much electricity the facilities produce regardless of what they are capable of.

“It’s a complicated way of making this tax. Someone has to do the meter production, verify the production and then determine the tax bill,” Palmer Fortune said. “A tax bill based on capacity is constant. There are no complicated complications or measurements that could go wrong.”

The final bill, which allows cities and towns to keep their negotiating authority, seemed to work well for Whately.

The town was one of the first municipalities to negotiate successfully with a developer when it approved a 1.8 megawatt facility on State Road on Szawloski Farms last July. The developer that leased the land for 25 years is a nonprofit, Citizens Energy, which assists people with the purchase of fuel and heating oil.

In the agreement, Citizens Energy will pay the town $6,000 in its first year that begins May 1, 2016. The tax rate the developer will pay will increase by 2½ percent each year – the same amount of increase that residents pay for their taxes.

“It gives the towns a small but steady income source, and it gives the solar companies a smaller yearly payment to make in lieu of the hefty up-front property taxes they would pay on the equipment in the early years of any particular site,” Palmer Fortune said.

The new law, Palmer Fortune said “is a good way to promote clean energy and let this kind of development happen.”