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| Background
Depending on the city or town in Massachusetts, electricity distribution is done by
> an investor-owned utility (or IOU), NStar, National Grid, Western Mass Electric or Unitil; IOUs serve 85% of the Massachusetts population.
> or a municipal electric utility (or muni), in yellow on the map; 41 munis – like Braintree, Norwood, Peabody, Danvers, Ipswich, Reading, Wellesley, Belmont, Concord, Shrewsbury, Holyoke, Westfield or Taunton – serve 15% of the Massachusetts population.
A map of Massachusetts cities and towns served by IOUs or munis is available here.
Since restructuring in 1997, Massachusetts IOUs no longer generate electricity and, just like munis, only distribute to end-users electricity purchased wholesale from power plants.
A white paper presented to Governor Deval Patrick's transition team in December 2006 explains that, compared with IOUs, munis offer:
> lower electricity rates
> improved reliability (fewer and shorter outages, for example in Shrewsbury or Groton), perhaps because munis have 47% more linemen than NStar, National Grid and Unitil; perhaps NStar does not do enough preventive maintenance because it spends millions of dollars instead on its top executives' compensation.
> responsiveness to local priorities (green energy, placing wires underground).
The Marblehead Muni placed utility wires underground
(Left: before - Right: after)
NStar breaks the State law when double poles
remain in place for more than 90 days
An analysis of electricity distribution costs shows that IOUs spend more to distribute electricity in suburban areas (where electricity consumption per mile of wires is low) than in urban areas; as a result, there is a slight subsidy today by an IOU's urban customers to the IOU's suburban customers.State law (MGL Chapter 164) describes the process a city or town must follow to create a muni by acquiring the distribution equipment from the incumbent IOU at a fair price, set by the State. But Chapter 164 needs clarification for that option to be truly feasible: its century-old language effectively gives IOUs a veto over new munis. No community in Massachusetts has formed a muni since 1926 (when Fort Devens closed in the 1990s, the Army-owned distribution system was converted into a partial muni, a special situation).
In 2002, 8 legislators filed bill H1468 to provide the necessary clarification. The Boston Globe called the bill "A promising bill [...that] would restore some power to the consumer". Like most bills in their first legislative session, H1468 was not enacted because it became part of a broader electricity bill which itself did not move forward.
In the 2005-06 legislative session, 40 legislators refiled the legislation as Bill H3294 to clarify our State law, with Representative Jay Kaufman (D-Lexington) as chief sponsor. After a public hearing on September 20, 2005 before the Legislature's Joint Committee on Telecommunications, Utilities and Energy, the Boston Globe wrote "Municipal power companies can and do outperform the big power brokers. [...] local communities should be allowed to seek the best deal for their customers -- the taxpayers". The Joint Committee killed Bill H3294 (and Bill H4204, a Lexington home rule petition similar to H3294) by sending them to "study" in March 2006.
In the 2007-08 legislative session, 53 legislators led by Representative Jay Kaufman, refiled the legislation, as Bill H3319, "an act relative to the establishment of municipal lighting authorities." The legislation was not enacted, but instead, section 107 of the Green Communities Act required DOER to study the fiscal impact, viability, barriers and long-term results of establishing new munis. A report is expected in June 2009.
In the 2008-09 legislative session, 47 legislators led by Representative Jay Kaufman in the House, and Senators Robert O'Leary and Marc Pacheco in the Senate refiled the legislation, as bills H3087 and S1527.
35 out of 160 Representatives co-sponsor House bill H3087: Jay Kaufman, Geraldo
Alicea, Cory Atkins, Jennifer Benson, William Brownsberger, Jennifer
Callahan, Steven D'Amico, Viriato deMacedo, Stephen DiNatale, Sean
Garballey, Anne Gobi, Denis Guyer, Robert Hargraves, Jonathan Hecht,
Louis Kafka, Kay Khan, Robert Koczera, Stephen Kulik, Timothy Madden,
Paul McMurtry, Charles Murphy, Matthew Patrick, Sarah Peake, Denise
Provost, Robert Rice, Jr., Richard Ross, John Scibak, Frank Smizik,
Christopher Speranzo, Thomas Stanley, Ellen Story, Timothy Toomey, Jr.,
Cleon Turner, Martha Walz and Alice Wolf.
12 out of 40 Senators co-sponsor Senate bill S1527: Robert O'Leary, Marc
Pacheco, Cynthia Creem, James Eldridge, Susan Fargo, Jennifer Flanagan,
Anthony Galluccio, Patricia Jehlen, Brian Joyce, Michael Knapik,
Anthony Petruccelli and Bruce Tarr.
Several organizations (including the Massachusetts Municipal Association, Environment Massachusetts, Mass Energy Consumers Alliance, MASSPIRG, the Mass Climate Action Network, and the Cape Light Compact) have endorsed this legislation.
The legislation is also endorsed by 145 of Massachusetts' 351 cities and towns (directly, or through the Cape Light Compact or the Franklin Regional Council of Governments) representing 63% of the population served by IOUs in Massachusetts. By individual IOU, these 143 cities and towns account for 90% of the population served by NStar, 44% of the population served by National Grid, 40% of the population served by Western Mass Electric and 100% of the population served by Unitil in Massachusetts.
Bills H3087 and S1527 give the option to form up to 3 munis per year, creating for the first time in Massachusetts a form of competition in the distribution of electricity. This will lead IOUs to improve their service, lower their rates and become more responsive to local needs all across the State, even if very few new munis are created. As a result, all Massachusetts residents and businesses will benefit from H3319.
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