Happily, Unitil gives up title as state's most expensive utility
Sentinel & Enterprise
Posted: 06/13/2012
By Michael Hartwell
mhartwell@sentinelandenterprise.com @sehartwell on Twitter
FITCHBURG -- One local company is happy to lose its title as No. 1 in the state.
This month Unitil lost its place as the most expensive electricity utility company in Massachusetts, with the municipally owned utility in Princeton now taking the top spot, according to numbers supplied by both utilities.
A massive supply increase in natural gas as a result of hydraulic fracturing is credited with a drop in electricity prices. On June 1, Unitil lowered its residential electricity rates by about 10 percent because of the cheap power provided by burning natural gas.
The Massachusetts Department of Public Utilities uses 650 kilowatt-hours as a standard rate comparison across the state. Using that amount, a Unitil customer now pays $116.38 a month.
The Princeton Municipal Light Department is a public utility company operated by the town of Princeton. An assistant manager in the department who declined to be identified confirmed Princeton's rate for 650 kwh is currently $124.80. Municipally owned utilities tend to invest directly in power-generating plants and are locked in to long-term rates, while investor-owned utilities like Unitil adjust to the market price every six months.
Brian Allen, manager of the Princeton Municipal Light Department, did not return a phone call for comment. His department's website said it gets about 40 percent of its power from wind energy.
"As a company, Unitil has worked very, very hard to keep rates affordable and that has been a challenge with the transition rate in place," said Unitil spokesman Alec O'Meara, referring to a restructuring fee tacked on to his company's bills.
More than 90 percent of the fee goes to pay for the Pinetree wood-burning plant in Westminster. He said if that fee sunsets in 2014 as planned, another $13 to $14 will be taken off the average bill.
He said he expects the company to rein in more costs.
"It will take time. Thankfully the trend on the supply is downward," he said.
Cathy Clark, founder of the group Get Rid of Unitil, which promotes legislation that would enable municipalities to form munis by letting the DPU determine an unrefusable price to buy out the utility infrastructure, said she doesn't consider it official until the Massachusetts Municipal Wholesale Electric Company releases an official ranking of all the utilities in the state.
That organization's last released numbers are from March when Unitil was still the highest.
Clark said she hasn't seen the number for herself and is willing to believe that Princeton has higher rates, but said another utility company may turn out to be even higher.
Patrick Mehr of the Massachusetts Alliance for Municipal Electric Choice said Princeton is one of the smallest munis in the state and only has about 1,700 customers. He said munis need about 5,000 customers to be competitive, and the Princeton Municipal Light Department, which was formed in 1911, is not a typical example.
"We have never said that all munis are cheaper than investor-owned utilities," said Mehr. Instead, he said munis on average have cheaper rates than IOUs, and that has been true for decades.
In addition to costs, Mehr said munis still have faster recoveries from storm outages and fewer out-of-the-blue outages, things that have value but are not reflected in the price comparison.