Note: bold by MAMEC
Utility: Rate cuts ahead
Officials cite link to Seabrook plant
The Hudson Light & Power plant's control board, being checked by oiler Manny Chaves; the public utility gets about 20 percent of its electricity from the Seabrook nuclear power plant. (Bill Polo/Globe Staff/file 2005)
By Matt Gunderson
Globe Correspondent / April 24, 2008
Electricity generated by nuclear power was once so costly that to escape the high rates, customers in the town of Stow sought a divorce from the Hudson Light & Power Department, which has long bought electricity from the Seabrook Station plant in New Hampshire.
Now, though, stable prices are making nuclear power a prized commodity, say industry insiders, including David Tuohey, a spokesman for the Massachusetts Wholesale Electric Co. The organization, a joint agency comprising 28 municipal light departments across the state, is a major stakeholder in the Seabrook plant.
Hudson Light, a municipal electric provider that serves more than 12,000 subscribers, primarily in the towns of Hudson and Stow, has been in operation since 1898. In the early 1990s, when Stow voters voted to separate from Hudson Light, its rates for electricity were among the highest for municipal utilities, said Allan Fierce, a Stow resident who was instrumental in leading the legal charge to secede from Hudson Light.
Six years ago, Stow voters ended their extended legal wrangling, deciding to continue receiving power from Hudson Light. It's a move that may look wise in hindsight.
In 2010, debt service for construction of Seabrook will start to decline, and it is scheduled to be eliminated by 2019. The reduction will be passed on to ratepayers in the form of lower electricity bills, Tuohey said.
Next year, the Regional Greenhouse Gas Initiative, a consortium of mid-Atlantic and Northeast states that is aiming to reduce carbon-dioxide emissions, will require electric-generating plants that run on fossil fuels to purchase credits for producing carbon emissions. The change will increase the cost of electricity across New England, Tuohey said. Since Seabrook's nuclear core does not produce carbon emissions, the plant and its stakeholders will be exempt from the program, he said.
"The ownership of the Seabrook plant has gone from a burden to a significant benefit, and the future looks even brighter," said Tuohey last week. "The market price for a natural-gas unit is significantly higher than the cost for a nuclear plant."
Tuohey said the price of electricity generated by Seabrook varies among its municipal customers, based on their ownership stake in the nuclear plant. Generally speaking, the price is much lower than for electricity generated by burning fossil fuel, he said.
Hudson Light general manager Yakov Levin said his department's substantial stake in Seabrook has brought electric rates well below current private utility providers, such as NStar and National Grid. His department depends on Seabrook for about 20 percent of its power, a figure higher than many municipal electric providers.
For an average household using 800 kilowatt hours per month, Hudson and Stow customers pay $101, said Levin. Relying primarily on natural gas, National Grid's average bill is $129 for the same amount of electricity, and the figure for NStar customers would be $145, said Levin.
However, Stow resident Fierce said it was inappropriate for Hudson Light to compare its electric rates with private utility companies, which commonly have to charge higher rates to make a profit.
"It's deceiving to ratepayers of Stow and Hudson to say that public utilities and private utilities are comparable," said Fierce. "Public utilities don't pay taxes, and they don't pay dividends."
Tuohey said his organization does not disclose electric rates charged by its member utilities, but, generally speaking, Hudson Light & Power is currently in the midrange of municipal electrical providers. "Hudson is pretty average right now," said Tuohey.
Based on calls to municipal utilities in the general area, Shrewsbury's average bill for 800 kilowatt hours is $88, as is Littleton's. West Boylston's bill is approximately $100 for the same amount of use.
But Tom Josie, general manager of the town-run Shrewsbury Electric and Cable Operations, said that his department's rates are anticipated to rise in 2011, after its current below-market energy contract expires. The municipal electric utility receives about 10 percent of its power from Seabrook, he said.
Unfortunately, said Josie, the state is not building any new nuclear power plants, so access to electricity generated by nuclear energy is constrained, making it a highly valued commodity.
"There are no other options for nuclear right now," he said.
In the absence of nuclear energy and other, cheaper alternatives to natural gas, Brad White, manager of the West Boylston Municipal Light Plant, said his department is exploring renewable energy, including a wind turbine and solar panels.
The one-time start-up cost for these measures would be expensive but might be the easiest way to stabilize energy costs and electric rates, he said. "We're trying to reduce our carbon footprint and diversify our power resources," said White.