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Groton, Littleton utilities seek savings with plant deals
By Jack Minch, December 28, 2008

Groton Electric Light customers pay a fraction of what National Grid and Unitil customers pay for electricity.

That is because small municipal electric companies like Groton Electric and Littleton Electric Light Department often have the flexibility to invest in hydroelectric, nuclear, wind and natural-gas-powered generating plants so they average out costs and thereby lower rates.

For every 500 kilowatts per hour of electricity, Groton Electric customers pay $56.65, compared to $83.98 for National Grid and $102.62 for Unitil customers.

That's good for its customers, but Groton Electric isn't about to rest, and is joining with other nonprofit utilities around the state to build a 280-megawatt power plant in Ludlow that is expected to open in 2013.

Groton Electric, like Littleton Electric, is part of the Massachusetts Municipal Wholesale Electric Co., which recently won approval from the state Energy Facilities Siting Board to build the $300 million plant.

The board ruled the new plant will provide reliable energy with minimum impact on the environment.

"This decision is an important step forward for the project, which is needed to help meet the future power requirements of Massachusetts municipal utilities and other project participants," Ronald DeCurzio, chief executive officer of Massachusetts Municipal Wholesale Electric Co., said in a statement.

The new plant will be powered by natural gas and be built at the Stony Brook site that already has two power plants that can generate 522 megawatts of electricity.

The consortium of utilities is made up of 24 Massachusetts municipalities plus the Pascoag, R.I. Utility District and a cooperative of Connecticut municipal utilities.

Littleton Electric has been part of the first phase of development for design work, but is opting out now that the price tag is firming up, said General Manager Savas Danos.

Littleton officials have concerns about the project, including the cost of natural gas and hence the cost of operating the plant, he said.

Municipalities pick and choose which projects to get involved in. Groton Electric and Littleton Electric have ownership stakes in hydro, wind and nuclear-power producers.

Among those power plants Littleton has ownership stake in are the Seabrook Nuclear Power Station in New Hampshire and Centennial Island Hydro in Lowell.

Groton has ownership stake in Seabrook and Millstone Power Station in Connecticut as well as a windpower project under construction on Brody Mountain in Hancock.

"That's why municipalities can sometimes offer lower contracts because we can get involved with good, safe opportunities for electricity at very affordable prices," Danos said.
Littleton Electric even buys gas futures off the Chicago Mercantile Exchange, he said.

"We buy the gas which transforms into electricity ... which allows us even more affordable electricity because we buy more up the food chain," Danos said.

Now that the Siting Board has approved the project the members of MMWEC must decide the best way to pay off the debt using bonds. Some members prefer a quick payoff while others figure if they get a good interest rate they should take their time paying it off.

"My personal view is to retire debt as quickly as you can," said Groton Electric Manager Kevin Kelly.