The 41 Munis that already exist in Massachusetts (incl. Concord, Shrewsbury,
Wellesley, Braintree, Norwood, Peabody, Ipswich or Taunton) serve 15% of our
population. Compared with investor-owned utilities ("IOUs"), Munis generally
offer better reliability (fewer outages) and favorable rates (lower than NStar by
24% for residential customers and by about 10% for commercial accounts in
1992-2003 in the greater Boston area). In 2006 for 500 kWh per month, Munis
charged a family $62, National Grid charged $80 and NStar charged $103 (resp.
29% and 67% more than Munis). Nationwide, there are about 2,000 Munis
including in Los Angeles, Seattle, Cleveland, Austin, Sacramento and Orlando.
MGL Chapter 164 outlines the process a city or town must follow to acquire the
distribution infrastructure from the incumbent IOU and operate it as a Muni. But
no new Muni has been formed in Massachusetts since 1926 because Chapter
164, written a century ago, makes the process impractical.
H3319 clarifies Chapter 164 by explicitly stating that once a fair value has been
established for the IOU's infrastructure, the sale must occur. H3319 also adjusts
certain time lines, creates a review process for the economics of new Munis and
limits at 3 per year the number of new Munis that can be formed.
By making the formation of new Munis practically feasible, H3319 introduces a
form of competition, which will lead IOUs to reduce their rates and improve
their service even if only a handful of new Munis are formed. In the case of
Lexington, a Muni would address local priorities while charging less than NStar,
saving Lexington residents, businesses and the Town $6-8 million annually.
H3319, filed by Representative Jay Kaufman, is co-sponsored by 53 legislators.
115 cities, towns and organizations (including the MMA, MASSPIRG, Mass
Energy Consumers Alliance, the Mass Climate Action Network, and the Cape
Light Compact) have endorsed Bill H3319 or its predecessors (H3294 in 2005-
06; H1468 in 2003-04). The Boston Globe called this legislation "A promising
bill […that] would restore some power to the consumer".
Prepared by the Lexington Electric Utility Committee (2/20/07)