Somerset goes after carbon tax funds
Haddad budget amendment would give town up to $3m
AN OUTSIDE SECTION of the Legislature’s budget would use up to $3 million from a regional carbon tax to help the town of Somerset offset the loss of property tax revenue from coal-fired power plants that have already closed or are about to close.
The provision is rekindling a debate about the proper use of the carbon tax revenues. Rep. Patricia Haddad, the powerful Speaker Pro Tempore who represents Somerset in the House, said her community is suffering financially as the region moves to cleaner energy sources and it’s only right that some of the money from the carbon tax go to ease that transition. But environmentalists say the Legislature shouldn’t keep raiding the fund that is propelling the region toward a cleaner energy future. They note Somerset is on the verge of receiving money from the fund for the third year in a row, bringing its total haul to $6.5 million.
The money is coming from proceeds from the Regional Greenhouse Gas Initiative (RGGI), which requires all power generators in nine northeast and mid-Atlantic states to buy at auction allowances for each ton of carbon they generate. Proceeds from the carbon tax are funneled back to the participating states. Massachusetts has generally used the $345 million it has received since 2008 to promote energy efficiency programs that help reduce the state’s reliance on fossil fuels.
The budget provision, sponsored by Haddad and Sen. Michael Rodrigues of Westport, does not mention Somerset by name but is crafted so that only Somerset qualifies for the money. Somerset is home to Brayton Point, a power plant that runs on coal and oil and is slated to shut down in 2017. It is also home to Montaup, a coal plant that closed five years ago. Haddad said Montaup’s closing and declining power generation at Brayton Point have sharply reduced the municipality’s property tax revenues from those two plants from a high of more than $12 million five years ago to about $4 million this year.
Josh Craft, program director of the Environmental League of Massachusetts, was among a group of environmental advocates who urged the Senate to kill the amendment, saying it was not the appropriate fund to help communities with falling property tax revenues and opens the door for other uses for money earmarked for long-range energy savings.
“A diversion of those funds diminishes the rate of success for efficiencies,” said Craft. “This is the third year in a row and we’re hoping that the time is coming that we won’t need to continue to dip into the RGGI fund for this particular purpose… It is an important precedent that is being set. We don’t think this should be tapped every year for reimbursements.”
Craft said the environmental lobby understands the position communities are in as plants operating on fossil fuels are phased out in favor of renewable energy sources. Craft said there are other programs that are available to reimburse cities and towns for declining revenues as well as the revenues that can be realized through the lease of offshore wind sites.
“I think people know we want to protect RGGI,” said Craft. “We’re very happy about the number of coal plants shutting down in this state, [but] we don’t want RGGI to continue to be carved up.”
The Legislature’s budget is currently on the desk of Gov. Charlie Baker, who is expected to release his vetoes later this week. Officials declined comment on the Somerset outside section.
In 2008, then-Senate Majority Leader Fred Berry tucked a provision into what became known as the Green Communities Act to provide Salem with money as the Dominion power plant there phased out its coal-fired generators. The amendment allowed Salem – and in theory any community losing property tax revenues because of a decommissioned plant – to receive from the RGGI fund the difference between what it had been getting at peak operation and what the plant’s owner was paying.
Berry’s amendment was supposed to sunset in 2011, but that year Berry and then-state Rep. John Keenan were able to get an extension allowing payments to continue until fiscal year 2016. In 2012, an outside amendment to the budget extended the provision through fiscal 2019, which has allowed Somerset to continue to tap the fund.
Massachusetts spends 93 percent of the money it receives from the carbon tax on energy efficiency efforts, according to the Regional Greenhouse Gas Initiative website. The rest goes for administration and greenhouse gas abatements.Haddad, who understands both the environmental lobby and her green-conscious colleagues are not pleased with her push on behalf of Somerset, says she will continue to go after the money for her town because it is losing a significant portion of revenue through no fault of its own.
“There’s a lot of money in that fund, a great deal of money, and it’s constantly being replenished,” she said. “Where do I go to try to help my people? I can’t ask the Legislature for the money from the general fund, that would hurt everyone. I’m going to keep trying unless somebody comes up with something better to help us out.”