Our current State law includes century-old, obsolete language that gives investor-owned utilities (or IOUs) veto power over new munis: no Massachusetts community has formed a muni since 1926.
Muni Choice Bill reported out as H3896: The Joint Committee on Telecommunications, Utilities and Energy held a public hearing on June 8, 2011 at which we testified in support of bill H869, and favorably reported H869 out as H3896 on January 24, 2012, with language that values IOU assets at "50 percent of the net book value, plus 50 percent of the reproduction cost new less depreciation", well above "unamortized investment" which State law uses for streetlights.
Bill H3896 is now in the House Committee on Ways and Means. We are working to get its IOU asset valuation language reverted to "unamortized investment" – ratepayers have already paid anything beyond that to the IOU.
The Muni Choice Bill H869 was filed by Representatives Jay Kaufman (15th Middlesex), Stephen Kulik (1st Franklin), Ellen Story (3rd Hampshire), Thomas Stanley (9th Middlesex), Ruth Balser (12th Middlesex), Thomas Conroy (13th Middlesex), Cory Atkins (14th Middlesex), William Brownsberger (24th Middlesex), James Dwyer (30th Middlesex), Jason Lewis (31st Middlesex), Jennifer Benson (37th Middlesex), Frank Smizik (15th Norfolk), Martha Walz (8th Suffolk), Richard Bastien (2nd Worcester), Stephen DiNatale (3rd Worcester), Dennis Rosa (4th Worcester) and Senators Gale Candaras (First Hampden & Hampshire), James Eldridge (Middlesex & Worcester), Karen Spilka (Second Middlesex & Norfolk), Jennifer Flanagan (Worcester & Middlesex).
Supporters of the Muni Choice Bill include the MMA (Massachusetts Municipal Association), the Boston Globe and Governor Deval Patrick who wrote "The bills under consideration are a step in the right direction and will allow residents greater local control and input into utility investment policies and decisions, services and service levels. I look forward to reviewing the final bill when it reaches my desk." when signing our petition and said "I see [...] municipal electric utility companies adding competition and lowering consumer prices".
Opponents are the 4 Massachusetts IOUs, NStar, National Grid, Unitil and Western Mass Electric who "have spent more than $4.6 million [...] lobbying since 2005" against the Muni Choice Bill and other legislation, according to the New England Center for Investigative Reporting at Boston University. The Boston Globe reports that "in 2010, [NStar CEO] Tom May made $7.9 million to run the monopoly that is NStar".
Past legislative session: In June 2010, the Joint Committee on Telecommunications, Utilities and Energy sent the Muni Choice Bill, redrafted as Bill H4792 to the House Ways & Means Committee chaired by Representative Charles Murphy. Despite the MMA's strong support, Chairman Murphy did not release H4792 before July 31, 2010, killing it for the 2009-10 session.
IOUs (like NStar) charge consistently more than munis:
Source: MMWEC surveys for residential usage of 500 kWh per month
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News: 2,700 people have signed a petition asking the Legislature to allow new munis in Massachusetts. Here is information about the petition and here are comments people made.
Here are the economics of a Fitchburg, Lunenburg, Townsend, Ashby muni replacing Unitil.
Here is our annotated summary of the January 28, 2010 DOER report about munis, prepared pursuant to section 107 of the Green Communities Act.
Here is what happened at the Legislature's public hearing on the muni bill in September 2009.
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Compared with IOUs, munis offer lower residential rates (table above) and:
> cheaper electricity for businesses and schools: if NStar charged as little as munis, NStar customers would save about $750 million each year on their electric bills.
> better reliability (fewer and shorter outages) and better customer service.
Munis restored power in 1-2 days after tropical storm Irene (Aug 28, 2011), but it took NStar and National Grid 1 week (Boston Globe, Herald News, Patriot Ledger). The Mansfield muni restored power to 99% of its customers who lost it in just 16 hours after Irene hit.
It took Unitil 2 weeks to restore power in central Massachusetts after the Dec 2008 ice storm, but a few days for neighboring munis (Boston Globe, Worcester Telegram).
Here is our testimony to DPU on how munis restore power faster than IOUs after major storms.
> more renewables and conservation: munis develop wind projects (10 wind turbines on Brodie Mountain: below), use green energy and promote energy efficiency
> greater responsiveness to local priorities: underground wires for better aesthetics and reliability
Lexington now (NStar) and right: Lexington with a Muni?
Watch a 13-minute video about why new munis are needed, and follow the presentation.
State law already includes a process for a city or town to form a muni by acquiring the IOU's local assets at fair value. But the century-old language effectively gives IOUs a veto over new munis. As a result, no muni was formed in Massachusetts since 1926. The Muni Choice bill modernizes the State law and gives municipalities the option to form a muni.
The Muni Choice bill will introduce competition in the distribution of electricity: even if very few munis are created, IOUs will have an incentive to keep their customers satisfied and offer lower rates, something they have not needed to worry about for many decades.
Watch a 1-hour TV program about munis and why Massachusetts needs more munis.
Read the white paper prepared for Governor Deval Patrick's transition team in 2006.
Join MAMEC's efforts: support the muni bill and ask your State legislators to also support it.