Cities and towns throughout West Virginia and the nation have one very distinct issue in common. They are continually trying to identify ways to stretch every dollar in their budgets to provide high-quality services.
Efforts to attract new business and investment will only be practical if the city can demonstrate that the city is clean, its streets and sidewalks well kept, and the neighborhoods are safe. It is a simple proposition. Fiscal integrity, aggressive and innovative efforts to attract investment to create jobs and prosperity, and a safe city make up the triangle of success.
Energy costs can place a heavy burden on municipal budgets. Municipalities seek partnerships to help them reduce their energy costs. Huntington, for example, is in the third phase of a 15-year contract to establish more energy-efficient buildings. The changes made through this energy savings performance contract is projected to save approximately $4.8 million in total operating costs for the city.
Renewable energy resources are increasingly affordable options for cities like Huntington. I learned recently that West Virginia’s cities and towns could benefit from affordable, locally produced renewable energy if our state lawmakers would act to legalize on-site Power Purchase Agreements (PPAs) for renewable energy-generation facilities.
Similar to a lease, an on-site PPA allows a developer to install, own, and operate a renewable-energy facility, such as a solar array, on Huntington city property, for example. Huntington would purchase the electricity the system generates at a fixed rate, which is likely to be lower than that of the local utility company. At the end of the contract term, we could purchase the solar facility for its fair market value and then enjoy the benefits of free, on-site energy production for the remaining life of the facility.
PPAs allow property owners to “go solar” with low to zero upfront cost — and at no cost to taxpayers.
PPAs also enable tax-exempt entities such as Huntington that do not pay federal income taxes to benefit from existing federal income tax credits. Private developers who do pay income taxes can pass along the value of the tax credit through lowered utility costs. These federal tax credits are substantial. Next year, the federal government will pay 26 percent of the cost of installing solar arrays on Huntington city buildings. Two years later, the tax credits will be down to 10 percent. So, time is of the essence if we are going to take advantage of this important federal support.
From small towns to large cities, municipalities across our nation are using PPAs to lower energy costs and lock in affordable, long-term electric rates. Hundreds of thousands or even millions of dollars in electric bill savings can be reinvested back into the community throughout the energy facility’s lifetime. That’s why I have joined West Virginians for Energy Freedom, a coalition of our neighbors, community organizations, local businesses, and officials who believe West Virginians should have the right to take control of where their energy comes from. Visit EnergyFreedomWV.org to find out more and join the fight for energy freedom in West Virginia.
I encourage our state legislators to support innovative efforts to reduce energy costs in their local communities. Energy efficiency should equate to an efficient local government.