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Commercial Interests

Gutted House Bill Doesn’t Give Power To The People

How Massachusetts Democrats Pulled The Plug On A Bill Meant To Bust Monopolies

By Scott Van Voorhis, Banker & Tradesman Columnist
Monday, August 6, 2012


Beacon Hill wants to let you know it is getting tough on Massachusetts’ fat-cat power companies after last fall’s catastrophic outages.

Don’t believe it for a minute.

Even as they rolled out a feel-good bill purportedly aiming to make the state’s major utilities more responsive during big storms, the commonwealth’s all-Democratic legislative leadership was quietly killing a measure detested by the power executives who oversee our increasingly troubled electric grid.

A decade in the making, the bill gutted by State House leaders would have opened up Massachusetts’ increasingly abusive and archaic electric monopolies to a small measure of competition.

Given that, it’s hard not to conclude that Massachusetts Democrats have conveniently forgotten their party’s own history of throwing rocks, not roses, at mega monopolies. FDR’s bitter battles with bully utility giants were legendary back during the Depression.

But the party’s patron saint would surely be rolling in his grave to see what his oh-so-timid heirs are doing now in Massachusetts.

Bold Proposal, Sad Ending

Amazingly, it was the sixth time in the last 12 years the so-called municipal utility bill was squashed.

It was a sad ending, coming despite vows earlier this year from some key legislative players to finally take action on the longstanding proposal, which would allow towns and cities to break free of existing National Grid and NStar monopolies.

Given the catastrophic outages that crippled broad tracts of Massachusetts following Tropical Storm Irene and the subsequent freak October snowstorm, it was an idea whose time had finally seemed to come. Gov. Deval Patrick, our vaguely reformist governor, even made some supportive comments.


But predictably, yet another round of phony baloney excuses have been thrown out to cover up the ugly deed. Officially, the bill was killed on a technicality that it was not within “scope,” whatever that means.

At least they keep changing the excuses – last year the committee chiefs who oversee utility legislation claimed the municipal utility bill was simply too complicated to sort out. No matter that these great parliamentary minds had already been studying it for a decade.

Lame excuses aside, the idea behind the Massachusetts bill that just died was simple – to lay out a path for towns and cities interested in running their own electric grids.

A few dozen communities across the state currently do this, but no new municipal utilities have been created since the 1920s, thanks to cumbersome and outdated rules.

Publicly owned utilities in a number of communities – ranging from upscale Concord to blue-collar Taunton – have compiled an enviable record. Many had the lights back on anywhere from a few hours to a day or two after last fall’s two epic outages, and all boast significantly lower rates than the big power companies.

Not surprisingly, other towns, frustrated after what seems to be a growing pattern of lengthy outages, have been pushing to at least have the option of going it alone. But also not surprisingly, that idea is vehemently opposed by NStar and National Grid, whose top executives pull down outsized multimillion-dollar pay packages year-in and year-out, with no fear of losing customers over shoddy service.

Lost Leverage?

Given this dynamic, what better way to prod the big power companies to get their act together – and stop the slide into Third World-style outages – than to open the door to some modest competition?

Instead, State House leaders last week were trumpeting a bill that surely has the big boys and girls at NStar and National Grid quaking in their sockets.

During outages, power companies will have to provide estimates to their customers – three times a day – on when electricity will be restored. If not, they may face unspecified fines. And oh yeah, they also are required to have a call center with enough staff to handle all the calls.

Wow, now that’s getting tough! You can bet your bottom dollar that the next time the power goes out you will find yourself bombarded with robo calls saying power could be on in the next 24 to 48 hours… if only your phone worked.

So why are lawmakers unwilling to even entertain the idea of a little competition?

One obvious reason is the clout of the utility industry, which routinely spends hundreds of thousands of dollars on a small army of well-connected State House lobbyists.

Those lobbyists and power company executives have also pumped tens of thousands in contributions into the coffers of key legislative chairmen over the past several years.

But I wonder if something more is going on here.

It was interesting to note that Democrats in the Massachusetts House moved in lockstep with party leadership to shut down the municipal power legislation, while the tiny Republican minority tried in vain to keep it alive.

Apparently the Dems are not only in love with big government, but they have also acquired a profitable affection over the years for big, corporate monopolies as well.

And as I said earlier, FDR would be none too pleased. Back in the 19s, Roosevelt clearly relished his tangles with the big utilities, which, in his day, were refusing to bring power to rural communities.

When Roosevelt had the federal government step in to do it itself, the industry then fought desperately to block those New Deal electrification programs.

“They are unanimous in their hatred for me – and I welcome their hatred,” Roosevelt said of his many battles with big corporate behemoths and monopolies, utilities and otherwise.

And as far as publicly-owned utilities go, here’s what FDR, a big fan, had to say in a campaign speech back in 1932:

“I therefore lay down the following principle: That where a community – a city or county or a district – is not satisfied with the service rendered or the rates charged by the private utility, it has the undeniable basic right, as one of its functions of Government, one of its functions of home rule, to set up … its own governmentally owned and operated service.”

Too bad he wasn’t around today to deliver it to some of his purported political heirs here in Massachusetts.