Town to vote on running utility

By Connie Paige, Globe
Correspondent  |  October 4, 2007

Lexington Town Meeting will be asked next week to endorse a state bill allowing communities to set up municipal electric companies that advocates say could lower electric bills dramatically.

If the article passes at the Special Town Meeting Wednesday, the vote could send a message to Beacon Hill about the support for municipal electric companies.

"The reality is, with the cities and towns that have municipal electric companies, the lights are on more often and for less money and with better service than in investor-owned utility territory," said Patrick Mehr, a longtime advocate for municipal electric companies and sponsor of the article.

NStar, the investor-owned utility that serves Lexington, said its delivery prices are "stable," the "service reliability is consistently improving year to year," and the company "builds and maintains partnerships" with its communities.

Spokesman Mike Durand gave as an example a parking lot recently donated in downtown Lexington.

"We've heard directly from customers throughout our service areas that they're comfortable staying with us," he said.

Officials from National Grid, the other investor-owned utility serving the area, did not return calls for comment early this week.

The Lexington vote would endorse passage of House Bill 3319, permitting formation of municipal electric companies, often called "munis." Lexington state Representative Jay Kaufman, the bill's lead sponsor, said he believes munis save ratepayers money, but he wants the Legislature to include $300,000 in next year's budget to study their benefits and drawbacks.

Officials from area munis contend their rates are lower than those of investor-owned utilities.

Priscilla Gottwald, community relations manager of Reading Municipal Light Department, started in 1894, said Reading residential customers pay an average of $81.70 per month, compared with what would be average monthly bills in that town from NStar of $139.53 and from National Grid of $116.17. The rate is based on the average customer's monthly use of 750 kilowatt hours, she said.

Durand disputed the figure for his company, saying it would be $134.51.

Other area communities with munis are Belmont, Concord, Groton, and Littleton.

Kaufman said that while state law allowed communities like these to set up their own municipal electric companies more than a century ago, many local officials now believe investor-owned utilities could bar the practice. The Democrat said the state Department of Telecommunications and Energy has taken that position, which "has not been tested in court."

Without a legislative go-ahead, communities are unwilling to pay what it would cost to prepare an infrastructure for establishing a muni, only to have it shot down, he said.

Kaufman said the bill has had slight technical changes since its first incarnation five years ago; the only substantial difference this year is that an increasing number of his colleagues have signed on.

The tally is now 53, including representatives Cory Atkins of Concord, William Brownsberger of Belmont, James Eldridge of Acton, James Marzilli of Arlington, Charles Murphy of Burlington, Carl Sciortino of Somerville, and Thomas Stanley of Waltham; and senators Susan Fargo of Lincoln, Patricia Jehlen of Somerville, Pamela Resor of Acton, Steven Tolman of Watertown, and Susan Tucker of Andover.

Supporters are hoping the bill will not end up like it did last year, when the Senate and House chairmen of the Joint Committee on Telecommunications, Utilities, and Energy placed it in what is called a study committee - "a technical term for a black hole," Kaufman said.

Mehr said he believes the bill has not advanced because of lobbying by industry representatives, who have also donated to the campaign coffers of some legislators.

Kaufman vehemently disagreed.

"It's a cheap and unfair shot to impugn the integrity of someone who doesn't see things the way you do," he said. "It actually bothers me a lot that their opposition would be characterized as 'for sale.' "

Kaufman said theirs is a "legitimate concern" that establishment of munis could have a detrimental economic impact on the investor-owned utilities and their ratepayers.

Opponents also worry about whether communities have the expertise to handle municipal electric companies, and what would happen if they fail.

"I think a Town Meeting resolution could restate the community's obvious interest in this bill, but I'm not sure how far it could go to address any of the concerns - many of them legitimate - that my colleagues have," he said.

To combat the skepticism, Kaufman said, he is filing a separate measure as part of next year's budget that would appropriate $50,000 to the Department of Telecommunications and Energy to perform an economic analysis of the bill's impact on investor-owned utilities.

Another $50,000 apiece would be granted to Lexington and four other communities that have expressed interest in establishing a municipal electric company for separate cost-benefit analyses. The others are Cambridge, Newton, Plymouth, and Worcester.

Mehr said he believes passage of the legislation could also affect another measure set for Special Town Meeting.

As a separate warrant article, voters will also consider a tax increment financing agreement, called a TIF, which would encourage development of a local facility by Shire Human Genetic Therapies Inc.

If the town were to have its own muni, Mehr figures, Shire could save a substantial amount in electricity costs.

Connie Paige can be reached at cpaige@globe.com.

© Copyright 2007 Globe Newspaper Company.

For the record
October 10, 2007

Correction: Because of an editing error, a story in Thursday's NorthWest section about a Lexington Town Meeting vote that will be held tonight had an incorrect headline. The Special Town Meeting will vote on whether to endorse passage of a legislative bill allowing communities to set up municipal electric companies. Also, because of incorrect information provided by NStar, the story mischaracterized the arrangement between Lexington and NStar for a parking lot in the town. NStar leases land it owns to the town, and Lexington says the town has spent its own money to turn the land into a lot. 

Boston.com Link

LETTER
NStar leased - not donated - parcel to Lexington  

October 11, 2007 

I wish to correct an inaccuracy in your otherwise very informative article ("Town to vote on running utility," Globe NorthWest, Oct. 4). 

NStar "gave as an example [of NStar's partnership with communities] a parking lot recently donated in downtown Lexington." There was no such donation. Instead, NStar leased an unused portion of land it owns to the town following negotiations I was involved in. The town will pay NStar $9,600 per year, and the town has spent its own money to turn the area into a parking lot.

Richard Pagett
Member, Lexington Center Committee;
former selectman

Boston.com Link