Climate Policy, Municipal Light Plants, and Local Taxation
Governor Baker recently signed into law “An Act Creating a Next-Generation Roadmap for Massachusetts Climate Policy,” Chapter 8 of the Acts of 2021. Sections 33 and 34 of that Act bolster the requirement that electricity suppliers derive product from non-carbon emitting sources by adding a new section 11F¾ to M.G.L. c.25A. Municipal light plants are required under this new section to establish a greenhouse gas emission standard to set the minimum percentage of electric power from non-carbon-emitting energy sources that is sold to their customers. The minimum state standards are 50% from non-carbon-emitting sources by 2030; 75% by 2040, and net zero by 2050.
The section defines 11 different sources to be non-carbon emitting, but also accepts clean energy credits or generation from sources that show at least a 50% reduction in greenhouse gas emissions over a 20-year cycle. If the municipal light plant fails to show compliance with the standard on annual reports filed with the Department of Energy Resources, it must make an alternative compliance payment based on the amount of the deficiency.
The Act also changes the taxable status of solar and wind-powered systems and fuel cell systems. It replaces the current Clause Forty-Fifth of M.G.L. c.59, §5 with a new Clause Forty-Fifth allowing PILOT agreements for real and personal property of qualifying solar or wind-powered systems. It also adds a new exemption, Clause Forty-Fifth B, for qualified fuel-cell power systems. In addition, M.G.L. c.59, §38H is amended to eliminate solar or wind-powered or fuel-cell power systems that are now covered by the new exemption under Clause Forty-Fifth or Forty-Fifth B. Agreements existing under M.G.L. c.59, § 8H as of June 24, 2021, however, will remain effective.
DOR’s Division of Local Services has issued general guidance on the Act and indicates that it will issue more detailed guidance. We’ll provide updates.