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Commentary: Towns want 'muni' options

By Paul Chernick
Thu Sep 17, 2009

Lexington - Last week, the hearing room of the Legislature’s Joint Committee on Telecommunications, Utilities and Energy was packed with residents of communities across Massachusetts, from Provincetown to the Connecticut valley, from Fitchburg on the New Hampshire border to Worcester and the suburbs of Boston. They were there to ask that cities and towns be given the option to replace an investor-owned utility (IOU) — NStar for Lexington — with a municipal electric utility (muni).

The Sept. 9 public hearing was on Bill H3087/S1527, filed by Lexington Rep. Jay Kaufman and supported by 47 legislators, including every member of the Lexington delegation.

For more than two hours, legislators, local officials, residents and business people complained about high rates and poor service from NStar and Unitil. Every town served by Unitil sent delegations, who described a series of horror stories from the devastating 2008 ice storm.
Not only did Unitil take much longer to restore power than neighboring munis, but Fitchburg’s mayor reported that Unitil did not know the addresses of the dozens of people reliant on electrically powered life support.

This legislation, under consideration for almost eight years, would update the 19th-century statute that facilitated purchase of private utility equipment by many of the 41 Massachusetts munis that were formed through 1927.
The language of that old law is now obsolete and allows IOUs to arbitrarily block the formation of any new muni, regardless of the benefits to consumers and the community.

Every witness on the subject spoke in favor of restoring the muni option, to provide lower electric rates, more reliable service, local control, and greater responsiveness to local needs. Several pointed to
IOU rates for households that were 50 percent more than muni rates in a survey this spring.

Citizen after elected official reminded the Committee that the delivery monopolies and lack of democratic accountability by the IOUs is inconsistent with the history of Massachusetts. They asked that communities once again have the real option to establish a muni by acquiring at fair value an IOU’s distribution equipment in the community. That position was supported by
a Boston Globe editorial published the morning of the hearing.

Many community representatives expressed their hope that passage of this legislation would light a fire under underperforming IOUs, leading them to reduce their rates, improve service, and become more responsive to local needs. If communities still see no progress, they would be able to move toward setting up their own utilities and control their energy future.

Several speakers emphasized the importance of munis’ much-lower electric rates for attracting business and reducing the burden on municipal budgets.

In a recent comparison,
NStar’s rates for high schools it served were twice as high as the rates nearby munis charged. The extra charges from the high-cost IOUs create enormous drag on local economies, which further strain municipal budgets as towns try to attract business.

If Lexington had a muni that could offer a new large customer like Shire lower electric bills, the town would not have needed to waive $400,000 in property tax and the state might have been able to reduce its incentives, as well.

Lexington representatives speaking at the hearing included Selectman George Burnell, Precinct 5 Town Meeting Member Ephraim Weiss, Electric Utility Committee member Patrick Mehr, and me. We directly addressed a number of questions asked by the co-chairs of the Committee.

No IOU representative spoke publicly at the hearing, although several were present in the room. Perhaps they were aware that opposing choice for frustrated and burdened communities was a losing proposition; perhaps they were confident that they would prevail behind the scenes due to
“their political juice,” as the Globe put it. In any case, citizens and their representatives will need to keep the pressure on to ensure that this important bill is passed.

For more about the legislation, you can find a
factsheet and answers to frequently asked questions at

Paul Chernick, a Somerset Road resident, chairs the Lexington Electric Utility Committee.