snl power daily northeast
Energy - Government

Massachusetts municipal utility bill gains support
September 23, 2005 By Kelly Harrington

While Massachusetts law allows for communities to acquire local distribution assets at fair value, it is too vague and hinders development of municipal electric utilities, supporters of a proposal to clarify the law told members of the legislature's Joint Committee on Telecommunications, Utilities and Energy.

House bill 3294, known as the Massachusetts Municipal Choice Act of 2005, would clarify and simplify the process for determining the price the municipality would pay the utility and would ensure that the utility sells the equipment to the municipality, supporters said at a Sept. 20 hearing.

Proponents of the bill said that it is supported by 105 cities and towns, and eight consumer, business and environmental organizations, such as the Massachusetts Municipal Association, Massachusetts Public Interest Research Group, Massachusetts Energy Consumers Alliance and the Cape Light Compact. Rep. Jay Kaufman, a primary sponsor of the bill, called support for the proposal "overwhelming."

Walter McGrath, former general manager of the Braintree Electric Light Department (BELD), encouraged approval of the proposal. He noted that while at BELD, it had among the lowest rates in the state.

"Today especially, this bill is very important," McGrath said. "In this deregulated market, where the investor owned utilities are merging and taking their home offices further and further away from consumers, local cities and towns should have the right to decide if they want to have their own, locally run electric utility."

Patrick Mehr, a member of the Lexington Electric Utility Committee, said many who testified in support of the bill spoke of their dissatisfaction with NSTAR service and the cost of its service compared to Boston-area municipal utilities.

NSTAR representatives did not return calls seeking comment on the hearing by press time. However, NSTAR had previously advised caution to any community considering the creation of its own power district. There are a large number of considerations that must be looked at by any city or town that is thinking of taking over a local utility, many of which are financial, the company said.

Jeanne Krieger, chairman of the Lexington Board of Selectmen, sent a letter to the committee noting the town's support and encouraging the bill's approval.

"[B]ill 3294 provides the necessary clarification and establishes a pilot program whereby up to three new munis would be formed annually," she said in the letter.