As energy costs soar, legislative plan pairs incentives, relief
As Bay State residents brace for a staggering rise in home heating prices this winter, legislative leaders unveiled yesterday an $80 million package of tax credits and deductions to encourage energy efficiency and provide temporary financial relief for low- and moderate-income families.
The bill, which is likely to be passed in the next two weeks and sent to Governor Mitt Romney, will offer a one-time $800 state income tax deduction for natural gas and heating oil bills for homeowners this winter and up to $600 in direct tax credits toward purchases of energy-saving products such as high-efficiency furnaces.
Democratic lawmakers are still working out the details, and could not say yesterday if the benefits would apply to this tax year or the next. Nonetheless, they said the bill represents a crucial shot in the arm for beleaguered Massachusetts residents, who can expect to see an average $800 spike in natural gas bills and a $400 jump in heating oil costs over last year.
''By all accounts, thousands of families across the Commonwealth will face significant financial difficulties keeping pace with these unanticipated increasing costs," Senate President Robert E. Travaglini told reporters during a State House press conference, also attended by House Speaker Salvatore F. DiMasi.
Romney, whose administration is working on its own energy bill, said he had yet to see the Legislature's proposal, but is hoping to create permanent solutions to increase energy efficiency.
The lawmakers' bill, one of several initiatives moving through the Legislature in response to the worldwide energy crunch, would:
From 1999 to 2003, the state allocated no money to LIHEAP, a program that has seen no significant federal funding increase in this decade, despite a steady increase in heating costs. Since Hurricane Katrina, which devastated the Gulf of Mexico-based oil and natural gas producers, US Senator Edward M. Kennedy and other Senate Democrats have called for an increase to the program.
''House and Senate leadership has taken an important step forward in addressing the very severe problems that low- and even middle-income people will have this winter," said Charlie Harak, a staff attorney with the National Consumer Law Center, an advocacy group.
Joseph P. Kennedy II -- chairman and founder of Citizens Energy Corp., which provides low-cost heating oil to the poor -- said in a statement: ''It's great to see Senate President Travaglini, Speaker DiMasi, and our energy [committee] chairs move aggressively to help relieve the energy crisis facing working families and the poor this winter."
In addition to helping defray heating costs, the bill seeks to increase consumer awareness of existing discount and rebate programs for those who purchase high-efficiency appliances. It would also require utility companies to establish programs to aid consumers who have difficulty paying their winter heating bills. And finally, it would extend by five years the Department of Telecommunications and Energy's efficiency charge, which since 1997 has funded a variety of energy-saving programs through a surcharge on electricity usage. The charge was set to expire in 2007. It generates about $110 million annually.
Environmental advocacy groups offered general praise yesterday for the Legislature's efforts to create greater incentives for consumers to be efficient in their use of energy. ''Efficiency is the cheapest, best, and fastest way to respond to our energy needs, and legislative and governmental embrace of that reality is gratifying," said Seth Kaplan, director of the Conservation Law Foundation's Clean Energy and Climate Change Program.
The Travaglini-DiMasi press conference was a rare joint appearance to lend their weight to a bill, and it underscored how the rising cost of oil and natural gas is emerging as a major political issue.
Travaglini has also sponsored a bill that would create a series of incentives for state residents to purchase hybrid cars like the
DiMasi, without mentioning Romney, sought to highlight the Democrats' timing on the issue.
''We cannot wait until the cold, harsh winter comes when poor families are in need of buying fuel to heat their homes," DiMasi said.
Romney's energy bill is expected to seek long-term financial incentives for state residents to reduce their consumption of electricity, fuel, and natural gas. That package is expected to come out next month.
''I think you'll see . . . that I will focus increasingly on finding permanent solutions to the high cost of energy, because we believe that this high cost is not a temporary phenomenon, but has the potential of being a permanent phenomenon," Romney said during a press conference held before the lawmakers'.
Raphael Lewis can be reached at rlewis@globe.com. 
