Proposed law would help towns form electric utilities
Rhonda Stewart, Globe Staff, 8/21/03, Globe West
Citing the potential for lower electric rates and better service, Newton officials are endorsing legislation that would make it easier for communities to buy electric power lines and establish their own municipal light companies.
In a letter to the chairman of the state Senate's Joint Committee on Government Relations, Senator Cynthia Stone Creem wrote that the communities she represents "have been burdened with erratic service, frequent blackouts and poor response from existing utilities." She also mentioned rising electricity rates across the region and a desire for cost-effective and environmentally friendly options as reasons why communities should have a range of choices in choosing an electricity provider.
Mark Fine, Creem's chief of staff, said one factor that prompted the senator to explore the possibilities for a municipal light company is Newton's involvement in renewable energy efforts. Creem helped secure a $500,000 grant for Newton South High School, awarded last month, to pay for solar panels and energy efficient lighting. "I think communities see a big consumer benefit. We're getting a lot of local support for [the bill]," he said. "It's a massive undertaking but in the long term, I think communities believe they would have better service, attentiveness to the community's needs, and lower rates."
Newton has not committed to establishing its own municipal light company, but in a letter to Creem expressing his support for the legislation, Mayor David Cohen wrote that he "would like the flexibility to be able to exercise this option should it be advisable sometime in the future."
Newton currently gets its electricity through NStar. Joe Nolan, the company's senior vice president of customer and corporate relations, cautioned that the drawbacks to municipal light plants outweigh the benefits. The plants can offer lower rates, mainly because they are able to take advantage of tax-exempt financing that is not available to major utilities, so comparing rates can be misleading, he said. He added that locally owned plants survive not because they are independent of larger utilities, but because they can rely on those companies for equipment or other support when needed. Nolan also said large utilities have the resources to respond to a major disaster, whether it be the blizzard that dumped more than two feet of snow this past winter or the massive blackout that affected parts of Massachusetts and Connecticut when it swept through New York and other states last Thursday. "If you start to take various communities out of the footprint, it becomes difficult to take care of towns in a crisis situation," he said.
No municipal light plants have been established in the state since 1926, Fine said, because the process for buying electric lines, determining a fair price for electricity, and getting the necessary infrastructure is complex and inefficient. The bill, which will be taken up in a hearing this fall, would clarify the steps communities must take to set up their own municipal light companies. No date has yet been set for the hearing.
Established in 1892, Wellesley's municipal light plant is one of only 41 in the state. The town-owned plant provides electricity to Wellesley and parts of Needham and services some street lights in Newton. Richard F. Joyce, plant manager, said start-up costs for a municipal light plant could run into the millions, which might prove a major obstacle for some cities and towns. Wellesley's light plant offers two main advantages, he said: reliability, as plant employees and its board of directors all live in town, and lower rates than those offered by an investor-owned utility. "There's a tremendous amount of accountability and a lot less bureaucracy," he said. "I could certainly understand why a municipal light facility would be attractive to communities."
Rhonda Stewart can be reached at email@example.com