Massachusetts Enacts Green Communities Act

Beveridge & Diamond, P.C. - Massachusetts Environmental, Land Use and Real Estate Alert, 2008

On July 2, 2008, Governor Deval Patrick signed the Green Communities Act (the “Act”), which is a comprehensive piece of energy reform legislation promoting development of renewable energy, energy efficiency, “green communities,” and implementation of the Regional Greenhouse Gas Initiative (“RGGI”).  The product of a compromise by the Governor, House Speaker Salvatore DiMasi, and Senate President Therese Murray, the Act will impact electricity producers, consumer, municipalities, and builders as the state seeks to implement its broad energy goals.

The Act emphasizes energy efficiency in electricity generation, consumption, and in building construction.  The Act is intended to make energy efficiency programs compete in the market with traditional energy supplies, and ultimately decrease consumer costs.  Utility companies will be required to purchase available energy-efficiency measures that cost less than generating new power prior to the purchase of new generation resources.  Utilities also will be required to offer rebates and other incentives to customers to encourage efficiency upgrades to lighting, air conditioning, and industrial equipment.  The Act requires the State Board of Building Regulations and Standards to adopt the latest edition of the International Energy Conservation Code as part of the State Building Code as its minimum standard.

The Act also promotes the production of renewable energy in Massachusetts through numerous means, including:

• requiring utility companies to enter into 10- to 15-year contracts with renewable energy developers to help developers of clean energy technology acquire necessary financing;

• promoting “net-metering,” which allows the owners of wind turbines and solar-generated power to sell their excess electricity into the grid at favorable rates for installations up to 2 megawatts; and

• authorizing utilities to own solar installations for use on customers’ roofs for up to 50 megawatts apiece.

The Act doubles the rate of increase in the Renewable Portfolio Standard from 0.5 percent per year to 1 percent per year with no cap.  As a result, utilities will be required to obtain renewable power equal to 4 percent of sales in 2009, rising to 15 percent in 2020 and 25 percent in 2030, and increasing thereafter.

The Act also establishes the Green Communities program, which offers incentives to municipalities to commit to efficiency and renewable technology.  Up to $10 million per year will be available in technical and financial help to participating municipalities through the Green Communities Division of the Department of Energy Resources.  Qualifying communities must adopt numerous provisions, including as-of-right siting for renewable or alternative energy generating, manufacturing or research and development in designated locations and an expedited permitting process which shall not exceed one year from the date of the initial application for such facilities.  “Green Communities” also must require all new residential construction over 3,000 square feet and all new commercial and industrial construction to minimize, to the extent feasible, lifecycle energy and water costs.

The Act gives final legislative approval to Massachusetts’ participation in the RGGI and provides that substantially all of the emissions allowances issued under the program will be auctioned and the proceeds will go toward reimbursing municipalities that lose property tax receipts as a result of the RGGI mandates, funding Green Communities, providing no-interest loans for municipal energy-efficiency projects, and promoting energy conservation.  Under the Act, 80 percent or more of the auction revenues will go to utility energy efficiency programs.  Further information about RGGI is available here.

The Act also establishes a new governing board for the Renewable Energy Trust Fund (“RETF”) and requires the development of five-year strategic plans for the existing RETF under the management of the quasi-public Massachusetts Technology Collaborative. 

The text of the Act is available here.

For additional information, please contact Marc Goldstein at mgoldstein@bdlaw.com or Krista Hawley at khawley@bdlaw.com.