State should remove obstacles for towns to provide electricity
March 9, 2010
IT’S THE season of power outages when a town official’s attention turns to electricity distribution, especially the cheap and reliable kind. That’s why 100 cities and towns are supporting a bill that would make it possible for consumers to acquire the assets of investor-owned utilities in order to create municipal light companies.
These so-called “munis’’ - town-run, nonprofit electric light authorities - enjoy a solid reputation for fewer and shorter outages, modernized equipment, and solid service at bargain prices. That argues strongly for the creation of more municipal light companies. But in Massachusetts, there are only 41 “munis’’ in operation, and not a single new one has come on line since the 1920s. Cities and towns ostensibly have the right to buy poles, wires, and substations of major utilities at fair value. But a loophole in the law allows investor-owned utilities such as NSTAR and National Grid to refuse to sell at the price determined by the state Department of Public Utilities. Essentially, the state’s four investor-owned utilities exercise veto power over such sales.
A sensible bill in the Joint Committee on Telecommunications, Utilities and Energy would require a utility to sell its equipment at the fair market value set by the state. It’s a big undertaking for a town, but it is one that several communities, including Lexington, seem prepared to tackle. Electricity deregulation in Massachusetts never created the hoped-for competition to provide power at lower costs for residential users. The creation of new munis, however, offers hope for dispirited communities, especially in central Massachusetts where investor-owned Unitil left customers in the dark for as long as 13 days after the December, 2008 ice storm.
A 2006 Department of Energy Resources report found that electricity rates for muni customers were 30 percent lower than those for investor-owned utilities. There’s no guarantee that towns can replicate those savings in the future. But the recent rain and wind storm that wreaked havoc in the North Shore is instructive. The Peabody Municipal Light Plant restored power for its customers by Saturday. Investor-owned National Grid needed until Sunday to get the situation fully under control in nearby communities. And in Peabody, a resident who uses 500 kilowatt hours of electricity can expect to pay about $50 per month, easily besting investor-owned utilities.
National Grid argues convincingly that investor-owned utilities carry the weight of the state’s new clean technology initiatives, including alternative energy portfolios and net metering, which allows customers using renewable energy generators, such as wind turbines, to bank electricity. It is reasonable to expect that any legislation that expands the number of local light companies will also expand their responsibilities to support renewable energy. But it is unreasonable to maintain a decades-long policy of forced outages every time a muni tries to spark to life.