Letter: End utility monopolies
Thursday, November 10, 2005
NStar, our current electric company, has filed to raise its rates for residential customers by 25 to 34 percent on Jan. 1. In Lexington, a household using 500 kilowatt-hours per month could see its monthly NStar bill increase by a whopping 34 percent, from $77.02 to $102.83.
NStar blames its power suppliers for these increases. While we are all aware of recent increases in energy costs, what NStar fails to mention or explain in its filing is why it has consistently charged more than other utilities who also purchase power from outside suppliers.
For example, in 2004, NStar charged a Lexington family $65.63 for 500 kilowatt-hours, but the cost of that same electricity was only $53.52 in Belmont, $51.88 in Concord, $47.91 in Braintree and $44.55 in Merrimac. Belmont, Concord, Braintree and Merrimac residents pay less because they are served by a municipal electric utility ("muni"), not by NStar. Simply put, before hurricane Katrina, our current sky-high natural gas prices or NStar blaming its power suppliers, NStar already charged 33 percent more than these four munis.
Munis are locally controlled utilities which - like NStar - supply residents and businesses with electricity purchased from power plants operated by outside suppliers but - unlike NStar - provide reliable service at a reasonable cost.
Unfortunately under current laws it is nearly impossible for towns to "municipalize" their electric service. Indeed, there have been no new munis in Massachusetts since 1925. However, Beacon Hill can foster competition to limit electricity rate increases if it enacts Bill H3294 which would allow the creation of new munis in Massachusetts. State organizations and 142 communities across Massachusetts (see www.massmunichoice.org) support this legislation sponsored by 40 legislators (including Lexington's Reps. Jay Kaufman and Tom Stanley and Sens. Bob Havern and Susan Fargo).
Based on the track record of munis in towns near Lexington, there appears to be a strong case for Lexington to create its own muni. But while we properly explore and debate that issue, ending the monopoly large utilities enjoy now should cause NStar to treat Lexington (and other towns) like customers instead of captives and hopefully lead to lower costs and improved service.