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Communities seek different power source

By Dan Magazu, dmagazu@sentinelandenterprise.com Jack Minch, jminch@sentinelandenterprise.com
Posted: 12/13/2009

A year after Unitil poor performance during and following last December's ice storm, officials in the communities served by the company continue to investigate possible alternatives to the utility provider.

The Board of Selectmen in Lunenburg created a Utility Task Force shortly after the storm to research the feasibility of the town purchasing its utility infrastructure and creating a municipal utility.

"We wanted to investigate the options the town may or may not have around implementing our own municipal utility company or a regional utility company in conjunction with other communities," said Tom Alonzo, chairman of the Lunenburg Board of Selectmen.

A municipal utility, or "muni," is owned and operated by the local government, rather than a private utility company, such as Unitil.

But current law makes it virtually impossible for communities to establish a muni because utility companies have the power to simply reject any offer made for the infrastructure, according to Alonzo.

House Bill 3087 and Senate Bill 1527 would amend state law so a community could purchase its electric infrastructure at a fair price determined by the state Department of Public Utilities.

The house bill was filed by state Rep. Jay Kaufman, D-Lexington, and the Senate Bill was filed by state Sen. Robert O'Leary, D-Barnstable.

O'Leary said recently that the bill has been around for several years, and it has never made it out of the committee level to be voted on by the entire Legislature.

But O'Leary said a new study on municipal utilities due out early next year could give the bill new life.

"Hopefully the report will say that this issue needs to be revisited," O'Leary said. "There aren't any alternatives right now for people who are upset with their incumbent utility. The bill tries to update an ancient law that frankly was written by the utility companies to make sure communities don't form municipal utilities."

O'Leary said he expects there to be a push in January, February and March to try to get the bill out of committee to be voted on.

"I have some hope this will move forward," he said.

Alonzo said it's too early to know if it would be feasible for the town to purchase its utility infrastructure and set up a muni.

"Right now we're just investigating whether or not there is a way to do it," Alonzo said. "If there is an avenue, then the task force can begin to look at it if it's something that makes sense and whether we can afford to do it."

Unitil is the service provider for Lunenburg, Fitchburg, Townsend and Ashby.

Fitchburg Mayor Lisa Wong said she created a committee earlier this year that is looking into a number of energy issues, including the feasibility of creating a municipal utility.

"It's something we are looking into," Wong said. "The biggest obstacle over the past 70 plus years has been that state laws are set up so that it's virtually impossible to create one. Even if we determine that forming a muni is better than sliced bread, we can't do it."

Wong said she absolutely supports the muni legislation.

"I've been discouraged to see that it hasn't left committee," Wong said. "The utility lobby is extremely strong and somewhat effective in terms of preventing this bill from moving forward. But I'm hoping through the media, grassroots efforts, and support from local officials, legislators will see that we are as deserving as utility companies in being able to chose how our utility service is delivered."

Cathy Clark, one of the most vocal opponents of Until, said the muni legislation is the region's best opportunity to rid itself of Unitil.

"It all hinges on the muni bill," said Clark, who is a real estate agent. "If and when that passes, I think the four communities served by Unitil should look at creating a regional task force to investigate forming a regional muni."

Carolynn McCarthy, a member of the Lunenburg Utility Task Force, said the group believes forming a regional municipal utility is feasible.

She said Unitil reported to the federal government in 2008 that the value of its assets in all four communities was $54.1 million.

"We've crunched the numbers and we believe that number could be financed through a municipal bond over 30 years and paid back as part of what residents would be paying as a ratepayer," McCarthy said. "We believe it's economically feasible to do it while still providing rates that are competitive with what Unitil offers today."

Alonzo said whether or not forming a muni is feasible in Lunenburg, communities across the state stand to benefit from passage of the legislation, because it will create a form of competition for utility companies.

"This is not just about Unitil," Alonzo said. "Towns need to be able to break this state-sponsored monopoly. This would at least provide an option."

Townsend officials also formed its Electrical Utility Study Committee after last year's storm, said committee member Michael Leonardo.

The committee has met with heads of other municipal utilities, such as Ashburnham Municipal Light Department Manager Stan Herriott, to discuss their operations.

The committee explored the feasibility of options such as purchasing a distribution system, approaching Groton or Ashburnham as an extension of their municipal utilities, or forming a new utility by teaming with Fitchburg, Lunenburg and Ashby, Leonardo said.

Until state laws are changed, however, there is little the town can do to change its electricity supplier unless Unitil decides to sell its distribution system, he said.

"Really, it came down to legislation," Leonardo said. "Right now if you had $100 million you couldn't purchase because the laws are written to protect the provider."

Townsend Selectman Bob Plamondon said he was highly critical of Unitil maintenance practices before the storm.

"I thought they did a piss-poor job of trimming trees," he said. "I hadn't seen any crews around and I think that exacerbated the problem because of overhanging branches that took lines down," Plamondon said.

Forming a new municipal electric company is a daunting task, however, he said.

"You need trucks, equipment, trained people," he said. "There are all sorts of problems, infrastructure problems. I don't know if its economically feasible at this point (though) philosophically I'd like to do it."

The town of Ashby's New Energy Resource Committee was formed not only because of the ice storm, but because residents are fed up with the Unitil rates and service, member Michael G. McCallum said.

"Last year we had a big storm and things didn't go well and people got heated but that's not why the committee got together," he said. "The committee got together because we pay the highest rates in the state and I don't know if we have the worst service but its right up there."

Ashby's New Energy Resource Committee briefed the Board of Selectmen about a month ago on its work but did not present any conclusions.

The committee remains enthusiastic about its work, said committee member Alan Pease.

It meets monthly and wants to be thorough about its research so its recommendation is based on all available data, he said.

"There are advantages with private utilities: you don't have to do anything, they do it all, but of course you have to pay for that; municipal utilities are a little cheaper but then you are responsible for the electricity and if anything goes wrong," Pease said.

Ashby Selectmen Chairman Peter McMurray lauded committee members' dedication to the job, but sounded pessimistic the town will replace Unitil soon.

"Everyone thinks they are going to replace Unitil; Unitil has been around years ... they have the infrastructure, we have nothing," he said.

Ashby Selectman Joe Casey said many residents were upset with Unitil immediately after the storm, and some of them still are, but there is no mandate yet.

"I don't think it's possible to make a decision at this point, I don't think there's enough information gathered in way of expense," Casey said. "And from a municipal standpoint, you need a commitment from the people of the community."