Generating local power
June 16, 2003
Shocked by the high cost of electricity and erratic service, municipal officials are looking to the Legislature for help in acquiring the assets of investor-owned utilities such as NStar. A promising bill sponsored by Representative Daniel Bosley of North Adams would smooth the way for communities to run their own municipal light systems, often a cheaper and better way to deliver electricity. Forty-one municipal light departments operate in Massachusetts. But the law related to their establishment is so vague and weighted toward existing utilities that not a single new ''muni'' has formed in decades. Bosley's bill would compel utilities to sell assets, such as poles, wires, and substations, for fair value. If the parties can't agree on a price, the state Department of Telecommunications and Energy would determine the value of the assets.
The electricity battle burns brightest in Lexington. The town's Electric Utility Ad-hoc Committee has reviewed the costs of providing electricity in 15 communities of similar size and found that ''munis'' charged residential customers on average 24 percent less than NStar. Commercial customers saved an average of 10 percent. A June 13 letter to legislators from Leo McSweeney, chairman of the Lexington Board of Selectmen, also cites ''frequent power outages'' and ''lack of responsiveness to customer inquiries'' as motivating factors to break away. It is in essence a declaration of independence from NStar.
Many NStar customers are still smarting from the summer of 2001, remembered bitterly for its combination of sharp rate increases and widespread outages. The municipal systems, however, seemed to ride it out. Daniel Sack, superintendent of Concord Muncipal Light Plant, recalls the sweltering summer almost nostalgically.
''Our load went up 25 percent from May to August, and we carried it with no significant outages,'' said Sack. An NStar spokesman, Michael Monahan, says the company has not taken an official position on the bill. But he said it feels to him like a ''government takeover.''
Towns shouldn't rush to create municipal light departments out of spite. A careful analysis must be made of acquisition and operating costs as well as the effects on the tax base. But Lexington officials believe that such concerns are offset by management efficiencies and the ability to purchase equipment with 20-year tax-exempt bonds. And some municipal light companies make payments in lieu of taxes. The Belmont Municipal Light Department pays 5 percent of gross revenues to the town.
Utility restructuring in 1997 seemed to stimulate competition in the bulk purchase of electricity. But average customers aren't seeing the benefits. The Bosley bill would restore some power to the consumer.