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Municipal Electric Companies Charge Significantly Lower Rates

By Lindsay Iadeluca

March 2nd, 2015

(WGGB) – Electric bills aren’t skyrocketing for all customers and some people are asking why.

“Investor owned utilities are only allowed to contract for power 6 months in advance which essentially exposes their customers to short term market rates,” David Tuohey, Director of Communications for Massachusetts Municipal Wholesale Electric Company, told ABC40.

These are customers, like Eversource and N-star seeing large hikes in electric bills. But those served by municipal electric companies, like Chicopee, Holyoke and Westfield, are fortunate their bills haven’t gone up.

“Municipal utilities can purchase power through longer contracts up to 4, 5, 6 years so you end up with lower rates for the long haul and more stable rates for your customers,” Tuohey added

When power is purchased only 6 months in advance, you’re paying what power suppliers think they will be charged. But with longer contract rates for municipalities they are able to keep your bills lower. No matter what bill you receive though, the problem remains… Why would anyone be seeing a spike in the first place? All parties seem to agree the spikes are due to the lack of pipeline capacity in our area.

“The rates this winter are significantly higher because there’s a shortage of pipeline here in New England,” Tuohey said.

“The single biggest thing we can do to deal with the rising cost is to create more pipeline capacity. It’s a disappointment, it’s a shame and it’s a problem,” Governor Charlie Baker told ABC40 last week.

Some are looking to the state legislature for a solution, others to Kinder Morgan’s pipeline proposals. But Tuohey says MMWEC has something cooking of their own.

“MMWEC happens to have a proposal ownership of public ownership of new pipeline capacity which would address the rate issue for all customers in New England and bring pipeline capacity at the lowest possible rate for consumers.”

Tuohey says they are only in preliminary stages but he hopes that this plan can save everyone across the board money, no matter who their utility company is.