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OUR OPINION: State should make it easier to form municipal utility

GateHouse News Service
Nov 18, 2011

EDITORIAL — Fighting back when utilities don’t provide an acceptable level of service has been frustratingly ineffective.

There is little to suggest that state fines assessed for sub-par service have helped improve storm response time. Meanwhile, communities feel hog tied by a state law that bans them from forming their own utility companies.

Even if the laws were amended to make switching easier, there would still be significant financial hurdles in the planning and implementation of such change.

Yet what if there was a stronger connection between the state’s efforts and community desires? What if the millions of dollars collected in utility fines were put into a special fund to assist communities interested in providing their own power?

It would certainly help in Pembroke, where selectmen on Monday voted to support a proposal by Selectman Arthur Boyle Jr. to see if any local towns would be interested in forming a regional electric company. Boyle said the prolonged power failures caused by Tropical Storm Irene sparked his idea.

He noted – as many others have – that Braintree, Hingham, Hull, Middleboro and Taunton all have their own electricity and all regained power after the storm much more quickly than communities served by National Grid or NStar.

Boyle mentioned Hanover, Duxbury, Marshfield as communities he will approach with his idea but said he is open to broadening the circle if there is interest.

One of the biggest hurdles communities face with such a plan is a century-old law that prohibits them from severing ties with an existing utility that provides service.

Rep. Jay Kaufman, D-Lexington, has introduced a bill several times to clear that hurdle but it unfortunately has yet to see the light of day.

Another, possibly bigger, hurdle is the cost involved. Business editor Jon Chesto pointed out in a recent Mass. Market blog posting that an effort to convert Boulder, Colo., to a municipal utility could require millions of dollars to pay the existing utility for its poles, wires and other related equipment. The provider, Xcel, says it should be paid close to $1.2 billion.

A fund established using utility fines could help communities fund feasibility studies and help overcome other financial barriers.

Last year, NStar charged a household using 500 kilowatt-hours per month $86, according to one estimate. The average municipal utility (or “muni”) in Massachusetts charged only $70.

“The best way to get NStar and other investor-owned utilities to improve their service and reduce their sky-high rates is to end the permanent monopoly they now enjoy,” Patrick Mehr of the Massachusetts Alliance for Municipal Electric Choice wrote on this page in September.

At the very least, a conversion fund would mean that utilities hoping to stave off competition would have an added incentive to do a better job: Avoiding fines would mean less money going into the pockets of those seeking their ouster.

It’s an idea worth investigating.