Why Local Power Utilities Often Outperform Regional Ones
BY SACHA PFEIFFER
Nov 4, 2011
CONCORD, Mass. — When a freak snowstorm hit New England in late October, Chris Roy and his coworkers immediately started tackling the downed trees and electrical wires that knocked out power in 20 percent of the town of Concord.
“Starting at 7 o’clock Saturday night, everyone worked basically till Sunday night at 9:30, just non-stop,” Roy recalls. “In round numbers, that’s 24 hours of straight work. Everyone looked like they were punched in the eye because of the dark circles under their eyes.”
A sagging power line in Concord in need of repair (Sacha Pfeiffer/WBUR)
Roy doesn’t work, however, for National Grid, NSTAR or one of the two other major regional utilities that provide power to Massachusetts. He works for the town-run utility in Concord.
And unlike National Grid, for example — which nearly a week after the storm is still working to get electricity restored to all its customers — the Concord Municipal Light Plant had all of the town’s power back in about 24 hours.
At Thoreau Hills, one of the neighborhoods in Concord hit hardest by the storm, the storm’s aftermath includes splintered trees and sagging electrical wires.
“Here, you have some of the remnants of a large downed tree,” Roy points out while taking me on a ride through the neighborhood. “It takes down the wires, blocking access for a lot of these homes so people can’t leave. You’re trapped by energized lines in your own property.”
But downed wires are a concern in only half of Concord. In the other half of the town, electrical lines are now underground. It’s an ongoing project paid for by a 1.5 percent surcharge on every resident’s electric bill. That comes out to about $1.65 per month for each ratepayer — and Roy says the benefits are enormous.
“The areas that are underground right now don’t have issues, so it allows us to focus our resources on these areas that are overhead,” he explains. “This is a testament to the benefits of having an underground system.”
There are 40 other municipal utilities in Massachusetts, collectively supplying power to about 15 percent of the state’s population, according to the Massachusetts Alliance for Municipal Electrical Choice. And, in general, they have a better track record of getting power restored quickly than companies such as NSTAR and National Grid.
The director of the Concord Municipal Light Plant, David Wood, says that’s not just because the municipal utilities tend to have smaller coverage areas.
“I think it’s the understanding of the system, the preventative maintenance that the municipals put in, from tree trimming and investing back into the facilities,” he says.
Asked how a municipal light company might understand its system better than a big regional utility, Wood explains: “Well, you spend your whole day in the town, so you learn the system and you know the system. If you work for an investor-owned, you’re going from town to town and you’re not going to have the institutional knowledge of the system.”
By “investor-owned,” Wood means companies such as NSTAR, National Grid, Unitil and Western Massachusetts Electric, which are privately run and typically more conscious of their costs than municipal utilities.
“We’re not worried about the bottom line,” Wood says. “We work for the citizens of the town. They’re the ratepayers. So we’re not looking at making as much money as we can. We’re looking at providing reliability… I think for the investor-owneds it’s more about making the money.”
It’s not cheap, for example, to put an electric network underground. In Concord, residents approved the town’s underground project at a town meeting in 1968.
“They wanted to get the utility poles out of sight — you know, improve the aesthetics of the town,” Wood explains. “Along with that comes reliability: the underground system isn’t subject to an ice storm or a snowstorm.”
The disadvantages of putting power underground, he says, include the price tag for that work.
“It costs about three times the cost in comparison to putting up an overhead system, and maintaining it is a little bit more difficult, as well,” he says. “When you do have a problem, it takes a little longer to find the problem because it’s an underground system and you can’t see it.”
Through its surcharge on electric bills, Concord now collects about $350,000 a year to put wires underground. But that’s only enough money to pay for about a third of a mile of work. Concord has put 50 miles of its electrical network underground in the past four decades and still has 50 more miles left to go.
The recent damaging storms have led to increased interest in municipal power companies. But interested communities can’t start their own yet; they’re waiting for state lawmakers to decide whether to allow additional municipal power companies in Massachusetts.