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by MAMEC
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Light plant working to keep rates low beyond 2009 contract
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By Maureen O'Connell/ Staff Writer
Thursday, May 25, 2006
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Those who like to complain about the cost of electricity could soon be getting more to complain about.
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The Concord Municipal Light Plant is exploring options for obtaining electricity once its current contract with Constellation Energy expires in 2009. According to Assistant Superintendent Dale Cronan, the rates will almost surely go up.
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"There will be an impact," said Cronan, referring to CMLP customer bills. "The question is how much more it's going to be."
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In the mid-1990s, the Concord Municipal Light Plant contracted to purchase power from Constellation Energy out of Maryland through 2009. The contract gave CMLP customers a locked-in rate that is much lower than those paid by customers in neighboring towns.
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Cronan said
the average residential customer in Concord pays 10.5 cents per kilowatt hour. Customers in surrounding towns pay as much as 18 or 19 cents per kilowatt hour
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"Our average customer is paying eighty dollars a month," said Cronan, "while the average NStar customer is paying something like $140 a month."
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Those rates will increase once the Constellation contract expires in 2009, Cronan said. Renewing with Constellation at the same rates is not an option, and may be more expensive than other options. Constellation uses gas to produce electricity, and the company is feeling the same pinch in its pockets that drivers are as gas prices continue to increase.
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Buying into the power-production field is the most-likely solution, Cronan said. Joining a group of other municipal light plants in eastern Massachusetts, CMLP would be able to buy its share of electricity from existing power plants with low interest rates.
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Of the available purchase opportunities, a power plant in Dighton seems to be the most economical for CMLP, offering electricity at $.075 cents per kilowatt hour, Cronan said. Right now, CMLP pays Constellation 4.6 cents per kilowatt hour.
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The Light Plant Board has given its blessing to a purchase at Dighton, Cronan said.
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To lighten the burden of the new power supply in 2009, CMLP added a half-cent "stability" fee to each customer's bill. As 2009 approaches, the stability fee will increase to 1 cent, then 1.5 cents. Cronan said this fee will allow CMLP to have 8 or 9 million to help soften the blow of a purchase in 2009.
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"All this money belongs to the taxpayers," said Cronan. "it will be used in 2009."
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If the CMLP were to enter into a purchase agreement at Dighton or one of the other available power plants in the area, it would be the first time CMLP has produced its own power since 1930, when it began purchasing power.
