Report analyzes utilities [Finds Municipals Cheaper]

> Feb 06 - Sentinel & Enterprise
>
> Existing municipal utilities in Massachusetts offer, on average,
> substantially lower rates and comparable reliability to private
> utilities, according to a new study released by the state Department
> of Energy Resources.
>
> A newly-formed municipal utility, however, will likely have higher
> rates than existing municipal utilities because they will be saddled
> with higher levels of debt, according to the 61-page report.
>
> Legislators on the state's Joint Committee on Telecommunication,
> Utilities and Energy have been awaiting the release of the report for
> several months as they consider legislation that would make it more
> feasible for a city or town to create a municipal utility.
>
> A municipal utility, or "muni," is owned and operated by the local
> government, rather than a private utility company.
>
> Current law allows a private utility to reject any attempt by a
> community to purchase its electrical infrastructure, according to the
> report.
>
> House Bill 3087 and Senate Bill 1527 would amend state law so a
> community can purchase its electric infrastructure at a fair price
> determined by the state Department of Public Utilities.
>
> State Rep. Jennifer Benson, D-Lunenburg, said she's looked over the
> report, but has not had a chance to comb through it thoroughly.
>
> "It's definitely not as cut and dry as I thought it would be, which
> complicates the issue a bit," said Benson, who sits on the Utility
> Committee. "Everyone was waiting on this report hoping that it would
> really support the legislation, but it's not overwhelming."
>
> Lunenburg resident Cathy Clark, who is one of the biggest local
> proponents of the legislation, said she believes the muni report
> confirms that municipal utilities are a better option.
>
> "The facts are the facts," she said. "We would be better served by a
> muni.
> The laws on the books are obsolete and need to be changed."
>
> Municipal utilities, on average, charge rates that are not only lower
> than standard rates charged by private utilities, but are also lower
> than reduced rates that private utilities charge to low-income
> residents, according to the report.
>
> "Though not many municipal utilities have low-income programs, the
> data shows that for 2008, the average municipal utility overall rate
> for residential customers was lower than the low-income rate charged
> be each of the four (private utilities)," the report states.
>
> The report provides no recommendation on whether or not the municipal
> utility legislation should become law.
>
> "It was not the intent of this study to reach definitive conclusions
> regarding whether electric municipalization is, or is not, a desirable
> outcome," the report states. "It should be evident that the
> consideration of establishing any specific municipal utility will pose
> unique issues that will require situation-specific assessments."
>
> Tom Alonzo, chairman of the Lunenburg Board of Selectmen, said he was
> not surprised by the inconclusive findings in the report.
>
> "Basically it says that when your weighing the benefits of a municipal
> utility, everything has to be done and investigated on a case-by-case
> basis," Alonzo said. "There are all kinds of different factors. The
> one clear thing the study does show is that currently investor-owned
> utilities have the absolute ability to block any attempt by a
> community to purchase the infrastructure."
>
> Alonzo said the muni legislation needs to pass because no community is
> going to go through a costly evaluation of its assets if it knows that
> at the end of the road the utility company can just say no to any
> offer.
>
> "Hopefully the committee will get this legislation passed," Alonzo
> said.
> "It's not mandating anything. It's simply offering an alternative."
>
> The report notes that municipal utilities are not required to
> implement many of the state's policies on efficiency and renewable
> energy standards, while private utilities are required to adhere to
> these policies.
>
> "Serious consideration should be given to requiring new municipal
> utilities to comply with the commonwealth's goals and initiatives
> regarding its energy future," the report states.
>
>
>