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Letter to the Editor: New municipal utilities benefit consumers, towns, unions alike

By Patrick Mehr

Jan 05, 2012

In "
Utility municipalization is a knee-jerk reaction" (Dec. 31, The Herald News), everything Daniel Hurley asserts about municipal utilities is incorrect, just like everything for-profit utilities NStar and National Grid have been saying for years about municipalization - to prevent passage of the Muni Choice Bill H869 and maintain their monopoly - is also wrong.
First, while for-profit utilities pay property taxes, municipal utilities make payments in lieu of taxes in the same dollar amount, as a January 2010 State DOER report found: “Municipal utilities are exempt from [...] municipal property taxes. Most municipal utilities do provide payments in lieu of taxes (“PILOTs”) to the town or towns they serve. [...] the PILOTs are similar to what [for-profit utilities] paid in municipal taxes in 2008.” (
mass.gov/eea/docs/doer/publications/doer-municipal-utility-rpt.pdf, page 5). Contrary to what Mr. Hurley asserts, a municipality forming its own utility would therefore not forego any revenues at all.
Secondly, while for-profit utilities provide special rates for low-income customers, the DOER report found that most municipal utilities charge less to all their customers than for-profit utilities charge under their "low-income" rates (
massmunichoice.org/Documents/Annotated summary of DOER muni report.pdf, item 4). Therefore, low-income customers fare better with a municipal than with a for-profit utility, contrary to what Mr. Hurley wrote.
Finally, Mr. Hurley should read the text of the Muni Choice Bill H869 (
malegislature.gov/Bills/187/House/H00869): contrary to what he asserts, new municipal utilities will be required to fully comply with the Green Communities Act, like for-profit utilities, and to implement energy efficiency programs consistent with the State's energy policy.
Most workers in municipal utilities are unionized, but not always by UWUA Local 369, which Mr. Hurley leads. In Lexington, where I live, we welcome unions, so a future municipal utility would very likely have a union. Perhaps Mr. Hurley perpetuates false "facts" in an effort to protect UWUA's position at NStar - just like
NStar spends millions of dollars to protect its own monopoly. Why not instead allow new municipal utilities, a form of competition that would compel for-profit utilities to hire additional linemen? Municipal utilities employ about 50 percent more personnel than for-profit utilities for similar service areas.
In short, the possibility to form new municipal utilities will benefit consumers, municipalities, unions as a whole and public policy. The possibility of losing parts of their territories may even motivate for-profit utilities to improve their service, something that's long overdue as we learned in 2011 after Irene and Snowtober
when municipal utilities restored power much faster than for-profit utilities.
Patrick Mehr
Massachusetts Alliance for Municipal Electric Choice
GUEST OPINION: Utility municipalization is a knee-jerk reaction

By Dan Hurley
UWUA Local 369
Dec 31, 2011
In the aftermath of Hurricane Irene and the Nor’easter which followed, there has been an effort underway to municipalize the electric industry. In fact, such a proposal has been under consideration on Beacon Hill. Should this legislative act eventually become law, cities and towns would be allowed to municipalize their electric grid.

This attempt to municipalize is little more than a knee-jerk reaction to a problem that can be solved by better preparation, deployment of the work force of the utilities, and input from the first responders, the utility workers.

While being without power is an extreme inconvenience and is frustrating for customers, the way to improve the situation is not through a knee-jerk reaction such as municipalization.

There are very serious ramifications to this proposal.

First, the utilities that currently serve the majority of cities and towns in Massachusetts pay enormous amounts of money in the form of taxes to these same areas. In fact, last year alone, NSTAR and National Grid paid millions of dollars in taxes to the communities they serve. This money was used to employ fire fighters, police officers, school teachers, and to help pay for other community services. Communities with municipalized electric grids do not pay taxes. Where will this money come from? What we do not need in this bad economy is a loss of revenue.

Secondly, the utilities in the eastern part of the state service some very affluent communities, as well as communities that are not as well-off.  Utilities provide valuable programs to their low-income customers including a discount rate, protection from shut-offs and energy efficiency offers which specifically target their needs. Municipalization will result in an increased burden on the less fortunate communities unable to start their own municipal utilities, which can further the already great divide of the rich and poor.

Another issue that remains unaddressed is that of the energy efficiency programs. The “muni” energy efficiency programs, where they exist, are substandard to the ones run by utilities. The utility companies are required to abide by the state’s energy policies.  These policies include renewable portfolio standards, reliability targets and a variety of other initiatives under the Green Communities Act. Although some municipalized utilities have voluntarily adopted various aspects of this act, they are not bound to do so.

For these reasons and more, the push to municipalize the electric grid should be opposed. The economic, societal and reliability effects are not a trade that should be made. Rather, a comprehensive plan by the utilities and the first responders, the Utility Workers, should be developed to safely and expeditiously restore power to all customers.

Daniel Hurley is president of the Utility Workers Union of America Local 369 in Braintree. The union represents 3300 members throughout the region, including the Fall River area.