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Municipal utilities feeling burned

Friday, November 11, 2011

Towns see none of funds from energy projects

North Attleboro and Mansfield municipal electric departments each collect about $55,000 a year from their customers for a fund that pays for energy efficiency projects, but not a penny of it comes back to the towns.

And they are not alone.

Municipal electric departments across the state are raising concerns they are not eligible to receive the money that comes out of their customers' bills.

Electricity generators collect a small fee from electric companies for every kilowatt hour of power that is used, which ultimately goes to pay for energy efficiency and conservation projects.

The charge, which is passed on from electric companies to their customers, makes up a tiny portion of each electric bill, but adds up to big money. While private utility companies receive some of that energy efficiency money, municipal utilities are not eligible, even though their customers pay the charge, just like private utility customers do.

"None of the money collected is actually coming back to municipal electric departments," said James Moynihan, general manager of North Attleboro Electric. "The municipal electric companies make up about 12 to 13 percent of the total load in the commonwealth, so 12 to 13 percent of these funds should go the municipal electric companies."

Several bills filed in the state Legislature are looking to do just that by changing the law to allow municipal electric departments to receive the energy efficiency money collected from its customers.

"We are concerned about this because the money should be coming back to our customers to pay for energy conservation. None of the 41 municipal light plants are getting that money," said Gary Babin, director of Mansfield Municipal Electric. "We're hoping the legislation will change that."

The energy efficiency funds are collected as part of the Regional Greenhouse Gas Initiative, a program that runs in 10 Northeastern and mid-Atlantic states.

The program, known in the industry as "Reggie" due to its initials, is a cap and trade program designed to reduce carbon dioxide emissions from power plants. The initiative puts a cap on the emissions of carbon dioxide and issues permits, known as allowances, for each ton of carbon dioxide that a power plant emits. To encourage conservation, power plants that cut their emissions can trade or sell their extra allowances at auctions.

In addition, electric companies pay power generators .00025 cents per kilowatt hour for electricity they receive, which amounts to around $55,000 a year in both North Attleboro and Mansfield - and millions across the 10 member states.

The Massachusetts Division of Energy Resources receives 20 percent of the "Reggie" money. The remaining 80 percent is dedicated for energy renewal and conservation projects.

While private utilities receive "Reggie" money, municipal utilities cannot under the current law.

There are several bills pending in the state Legislature that would change that by allowing municipal electric companies to receive the money collected from its customers.

The bills, all filed in January, are before the Joint Committee on Telecommunications, Utilities and Energy.

If North Attleboro Electric received the money, it would be used to enhance energy efficiency programs already in place, such as energy audits and rebate programs, Moynihan said.

Mansfield Municipal Electric would also look into expanding its programs if one of the bills is approved by the Legislature.

"We would ask the light commissioners if they would be willing to adopt conservation programs. We have a few smaller programs like energy rebates and energy audits, but we could do a widespread conservation plan if we had the money to support it," Babin said.