Starting a utility easier said than done
BY AMY DeMELIA SUN CHRONICLE STAFF
Sunday, October 23, 2011
In North Attleboro, it all started as a dispute over street lights.
In the 1875, the Globe Gas Light Co. of Boston charged the town $1 a month for each of its 100 street lights.
Those beacons of light also proved to be beacons of controversy over the next 13 years as residents grew concerned with the climbing cost of street lighting.
In 1890, fed up residents voted to cap the cost at $60 per light per year. The company providing street lights at that time, North Attleboro Steam and Electric Co., pushed back by offering two choices: Pay $90 per light, or the street lights would be shut off.
Residents unanimously voted for darkness. The timing of the controversy was right because the state Legislature enacted a law that year allowing towns to establish their own electric plants. The town voted to start a municipal utility, and North Attleboro Electric was formed in 1894.
If only it were so easy today.
With private utilities' response to Tropical Storm Irene creating a new push for municipal electric departments, today cities and towns would have a much harder time breaking away.
Starting a new electric department now would mean buying the infrastructure from a private utility, which would be costly. In addition, private utilities aren't required to sell their transmission systems to anyone, so they have the ability to veto the process entirely.
That doesn't mean that local communities aren't willing to explore the idea, however.
Wrentham selectmen are talking with officials in Plainville and Norfolk to see if those communities are interested in starting an electric company that could serve the three King Philip towns because of National Grid's response to Irene. "That was the stimulating factor," said Wrentham Town Administrator William Ketcham. "The way the law is currently does make it a bit difficult, and I don't know if the legislation to change it will pass. I think the whole concept of municipal electric departments will be a matter of consideration for some time."
North Attleboro and Mansfield, which are among 41 communities across the state with municipal electric departments, fared better on two fronts during Irene: Fewer customers lost power and power was restored more quickly to those who did.
In North Attleboro, only 4,000 out of 13,000 customers lost power during Irene, while about half of the Mansfield Municipal Electric Department's 9,600 customers lost power.
Compare that with outages of more than 90 percent in neighboring communities served by National Grid, including Attleboro, Plainville, Rehoboth and Foxboro.
In some of those communities, it took a week for power to be restored, compared with a day or two in North Attleboro and Mansfield.
North Attleboro Electric General Manager James Moynihan attributed the community's quick response to "a good deal of planning and preventative maintenance and the great dedication of our crews.
"Since we're in a limited geographic area, our crew knows the system. They work on it every day, which really helps when you're responding to emergencies," he said.
Mansfield Municipal Electric Director Gary Babin echoed those comments when he spoke to The Sun Chronicle after Irene, saying that public utilities often collaborate with other departments, making coordination of the work easier.
In addition, municipal electric departments generally have cheaper rates than private utilities. A report issued last year by the state Division of Energy Resources compared municipal and private utility rates from 2004 to 2008, and found municipal utility costs were an average of 4 cents lower per kilowatt hour than private utilities.
However, the report notes that a newly formed municipal utility would face challenges setting rates because it would have a higher debt load than the utilities formed in the 1920s or earlier.
New power companies would also have to start negotiating power contracts from scratch, while current municipal utilities are part owners in power plants.