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Wednesday, January 14, 2009

Board told a ‘muni’ would be a better deal


LUNENBURG — Town officials will weigh in the coming days on whether to lend their support to proposed legislation that would make it easier for communities to start their own municipal power agencies.

Selectmen, still riled by Unitil’s response to the Dec. 11-12 ice storm, heard a presentation last night from Patrick Mehr of Lexington, a member of that town’s municipal utility study committee.

Mr. Mehr said municipal utilities have lower rates and higher customer satisfaction than the investor-owned utilities that have a virtual monopoly in the state.

Existing law gives utilities exclusive franchise rights on territories, such as Unitil’s in Lunenburg, that Mr. Mehr said grant the companies virtual veto power over any attempt to start a municipal utility, or “muni.”

“Today these IOUs are fat and happy because they are monopolies,” Mr. Mehr said, using an acronym to describe investor-owned utilities.

Legislation scheduled to be reintroduced today by state Rep. Jay R. Kaufman, D-Lexington, would require investor-owned utilities to sell their infrastructure to municipalities if they could come to a fair price. The state Department of Public Utilities would be the arbiter of that price, Mr. Mehr said.

Even if the municipality didn’t seek to start its own power company, he said, the mere possibility would force a change in the practices of investor-owned utilities.

“Instead of a monopoly, you’d have a form of competition,” he said, adding that companies such as NStar or National Grid “have become very lazy.”

Mr. Mehr also noted the multimillion-dollar pay packages for executives at investor-owned utilities and said they have a lot of money to influence legislators with.

Selectman Thomas A. Alonzo, the board’s chairman, told Mr. Mehr he appreciated the information and said the board would get back to him soon about the legislation.

Mr. Mehr said a rate analysis performed by his group found that, in January, Unitil charged $115.36 for 500 kilowatt hours of electricity, compared with $112.86 for the same amount of power provided by NStar, $87 by National Grid and $69 for the average municipal utility.

“I feel for you guys,” he told the crowd gathered at Town Hall.

Mr. Mehr said he has heard from other dissatisfied Unitil customers since the storm. He was asked about the feasibility of taking the utility’s property by eminent domain. The problem there, he said, is that the law governing seizure of private property does not cover poles, wires and electric substations.

“It’s a total waste of time to chase that eminent domain route,” Mr. Mehr said.

But, he added, if the proposed legislation is adopted, perhaps a community seeking a new provider — such as National Grid, which serves neighboring towns — could enlist that other utility’s financial resources in buying out the existing infrastructure.