Research: Lexington residents pay 45% more than Concord
By Patrick Mehr, guest commentary
October 5, 2001
A typical Lexington resident paid Nstar $137 per month during the past 4 months, or 45 percent more than what the very same electric consumption would have cost in nearby Concord ($94), a difference of $43 per month. This conclusion is from an analysis of 51 actual Nstar bills from 32 Lexington residents for the period May-August 2001, which were each re-rated using the Concord Municipal Light Plant rates.
My Nstar electric bills in Lexington seem to be very high, yet my electric service has become quite unreliable. During the past six months, I have lost power five times, for a total of 48 hours and 8 minutes, not counting multiple shorter interruptions.
The visual blight created by a rapidly growing maze of utility wires and equipment on poles along Lexington streets led me to research which communities across the nation have started putting their utility wires underground. It turns out that right next door to us, Concord is actively burying its wires, with the objective of eventually having all utilities underground town-wide.
Unlike Lexington, where Nstar (formerly Boston Edison) is the electric distribution company, Concord has a municipal utility, Concord Municipal Light Plant (CMLP), which owns and operates the electric distribution network in Concord. CMLP has a staff of 30 people and purchases most of its electricity in bulk from Nstar, at about the same price that we, Lexington residents, pay directly to Nstar (the "generation charge" of about 7 cents per kWh which represents roughly half of our Nstar bill, the other half being "delivery services"). But CMLP operates more efficiently than Nstar, resulting in lower delivery services than what Nstar charges.
Is there also a rate difference between Lexington and Concord over a longer time period? Over the past year (September 2000-August 2001), a typical Lexington resident paid Nstar $1,292, or 28 percent more than what the same electric consumption would have cost in Concord ($1,013). By extrapolation to all 11,000 Lexington households, we paid Nstar $14 million over the past year, $3 million more than what we would have paid under Concord rates.
I can only offer hypotheses about why we pay more in Lexington for electricity than Concord residents do, yet with poorer service. Nstar, a public company, must maximize earnings per share and may spend only what is strictly necessary to maintain and upgrade its network. CMLP's only objective is to satisfy Concord residents with quality of service and affordable rates. CMLP is willing to invest more upfront to provide more reliable electric service: just driving around Concord, one can see that the poles look newer, the wires less disorganized, and the boxes more modern than in Lexington.
CMLP's 10 linemen know the network very well, work only in Concord and have little turnover, allowing them to fix outages faster than Nstar crews which cover several towns and are dispatched from outside Lexington. Nstar is not overly responsive to its customers: the compensation of Nstar's chairman and CEO ($2.2 million in cash and stock in 2000) suggests that he is a highly effective executive, yet a letter I sent to him on Aug. 15 to inquire about the reliability of our electric service in Lexington remains unanswered. When I ask Nstar representatives over the telephone during an outage what caused the outage, I usually receive no answer because Nstar does not make that information available in real-time to its customer service representatives.
Following the recent widespread outages in Brookline and Cambridge, the Massachusetts Department of Telecommunications and Energy (DTE) has been criticized for its insufficient oversight of Nstar. DTE does not enforce the Massachusetts state law requiring utilities to rectify "double pole" situations within 90 days (MGL Chapter 164, Section 34B). There are about 240 double poles in Lexington, each one a violation of state law by Nstar and Verizon, perhaps because of DTE's lack of enforcement. In Concord, CMLP is directly accountable to Concord's Town Meeting.
Is there a way for Lexingtonians not to pay 28-45 percent more than our Concord neighbors for our electricity and to get better service?
Yes, there is. Our Town Meeting unanimously voted in 1996 and 1997 to allow Lexington "to establish and to maintain, in accordance with the provisions of Chapter 164 of the General Laws ... a municipal lighting and gas plant ..." But we have not yet done so.
Lexington should set up a Utilities Committee to review Nstar's pricing, service reliability and other local issues, and to explore the feasibility of establishing a municipal electric utility in Lexington similar to Concord's CMLP and to 39 other municipal systems across Massachusetts.
Patrick Mehr is a Town Meeting member for Precinct 3 and a resident of Woodcliffe Road.