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by MAMEC
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Light isn't dimming at Concord's plant
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By Kerri Roche/Staff Writer
GateHouse Media
Thu Apr 12, 2007
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Concord - One of the only times a Concord resident may think about his electrical source is when he receives his monthly bill. Other than that, when a switch is flipped or an electrical outlet is plugged into a socket, the electronic device works and the electricity is provided at a relatively reasonable cost.
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Thanks to a Town Meeting vote in 1898, the Concord Municipal Light Plant currently delivers Concordians a local power supply at almost half the cost NStar charges surrounding communities.
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In 2006, the savings passed on to town residents totaled $15.6 million under CMLP rates compared with those of NStar in nearby towns
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Unlike large, corporate chains that can purchase products in large quantities and pass the savings onto consumers, the energy industry is much different, said CMLP Superintendent Dan Sack.
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Starting within the company, CMLP saves its users money because it operates without stockholders. According to Sack, energy companies such as Boston Edison have to maintain financial relationships with their stockholders, usually at the expense of their consumers.
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Like the other 39 municipally owned energy companies, said Sack, CMLP views the consumer as the stockholder.
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"They're the ones who own this and they get their dividends" in the form of savings, said Sack.
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Additionally, said Sack, as a smaller entity, CMLP manages to operate more efficiently without the rigid job descriptions often associated with larger companies.
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"Everybody's a generalist and everybody's a specialist at the same time," said Sack. For example, all of the line workers can do anything that needs to be done in the field, he said.
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Also, as a municipal entity, CMLP does not pay income taxes, said Sack. However, the light plant does pay the town the equivalent of property taxes that would be paid if NStar was operating in a similar facility in town.
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All of the savings that begin with the in-house operations of the CMLP are translated into significant and drastic savings for the citizens of Concord.
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Consumer-driven savings
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Additional savings structured around conservation are also offered through the CMLP, said Energy Services and Communications Administrator John Odell.
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With the localized control to manage the ins and outs of the light plant, said Odell, consumers also set the standards for the educational outreach offered by the plant.
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Every three years, a town-wide survey is mailed to every household. On a more regular basis, suggestions can continually be made year-round at the Light Board meetings. These ideas are evaluated and taken into consideration.
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Traditionally, said Odell, Concord is a "very proactive town in terms of conservation."
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Some of the opportunities Concordians frequently take advantage of, said Odell, are the appliance and light bulb rebate program.
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By offering a $5 rebate on each compact fluorescent light bulb, consumers can essentially get the bulbs for free and save up to 70 percent on their lighting costs, said Odell.
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Also, in an effort to bridge the gap between the cost of regular appliances and that of energy-efficient models, the CMLP offers up to a $100 rebate on Energy Star appliances.
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In 2006, the CMLP issued almost $35,000 worth of appliance and light bulb rebates to residents.
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If a resident would like to identify the biggest energy-wasters in their household, a free walk-through energy audit can be scheduled to identify easy solutions for high-cost energy bills, said Odell.
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The first step in the next frontier for eco-friendly heating costs will begin this summer. The CMLP is looking for a volunteer to share the cost, up to $10,000, of the installation of a solar heating system in return for a first-hand account and experience to pass along to Concord residents.
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The customer must agree to sponsor four open houses to allow interested parties to view and witness the solar heating abilities. After observing the installation and usage of the solar heating system, the CMLP will prepare a report of the advantages and issues surrounding.
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The future of savings
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Right now, the CMLP is under a contract with Constellation Power Source, which according to Sack is the marketing arm of Baltimore Gas and Electric Company. Before entering into the latest contract, CMLP was under agreement with Boston Edison.
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Under the current contract, Constellation Power Source has agreed to provide Concord with its total electrical needs at all times, including peak usage, for a specific price, said Sack. In other words, it is an "all requirements contract."
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The residential rate comes in at approximately 11 cents per kilowatt-hour. In comparison, NStar users are charged somewhere near 20 cents per kilowatt-hour
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Typically, the town averages about 35 megawatts of electrical usage per month. During the peak summer usage, the number increases to 45 megawatts.
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However, this contract with the Maryland-based energy producer will end in September 2009.
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In anticipation of the end of the contractual agreement, CMLP has already begun purchasing long and short-term contracts with a variety of other entities.
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To bring electricity into homes, all energy-producing plants contribute to a large "pool" or grid of wattage, said Sack. It is from this reservoir of energy that the town's and energy companies extract their electrical needs.
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Although CMLP purchases megawatts from a specific company, CMLP uses a mixture of various plants' energy that has been contributed to the "pool," much like a reservoir. All the electricity is the same in the "pool," said Sack, and the need for contracts is only for financial transactions.
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So far, CMLP has committed to take 10 megawatts from the Braintree Electrical Department. The same commitment is in the negotiation process with an energy unit still in the building process based in Taunton.
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In addition to the 20 megawatts secured through production units, said Sack, an additional five megawatts may be available from a wood-burning factory in Russell.
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The remaining power supply needs would be fulfilled from the power pool during peak usage time, said Sack. As the last option on the list, the power pool remains the most expensive choice for CMLP.
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By agreeing to a variety of contracts and commitments, said Sack, "it's going to be a whole new ball game for us." However, with the ongoing changes in the energy industry, CMLP is doing "nothing different from what other municipalities are doing," said Sack.
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Since the deregulation of the energy industry in 1988, there has not been an increase of competition among power suppliers. According to Sack, even though dozen of energy labels exist, only a handful of large companies own all the generation plants.
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Like the gas companies, said Sack, "If there's not a lot of players - not a lot of competition." With the deregulation of the industry, the government was hoping energy prices would fall. "Instead, they've gone up," said Sack.
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Sack said consumers should expect to see that impact on their electric bills in 2009.
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Kerri Roche can be reached at kroche@cnc.com or 978-371-5796.
