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Lexington, Mass.: another muni candidate

Boulder, Colo. has been "lawyering up" in anticipation of doing battle with Xcel Energy over the city's interest in forming a municipal utility.

Last week, Boulder announced it had selected a law firm to deal with the Federal Energy Regulatory Commission (FERC), which would referee the value of Xcel's Boulder-related assets, for which Boulderites would have to pay. Just prior to that move, Boulder had hired a different law firm to deal with "potential" condemnation proceedings, should Xcel elect not to sell its Boulder assets to the city. (Few believe that Xcel will willingly sell its assets and kiss Boulder goodbye, as that account is said to bring in $100 million annually in revenue.) 

We've covered this case pretty thoroughly over the past year. See the latest, which contains links to earlier pieces, in "Wanted: Smart Grid from Scratch" and an older column, "Boulder Rejects Xcel."

But another long-running municipalization effort has been percolating for a decade in Massachusetts, driven by locals who compared rates and reliability for the state's 41 municipal utilities and the region's large investor-owned utilities and found the latter wanting.

You may recall that we wrote about the outlines of this story last fall in "Outages Drive Smart Grid, and Muni Legislation."

Starting ten years ago, the Massachusetts Alliance for Municipal Electric Choice has promoted changes to archaic state laws over a century old that would modernize the state's statutes and allow a clearer path to municipalization, should a Massachusetts city or town decide to pursue it.

This effort got a major boost last fall when Hurricane Irene-turned-tropical-storm struck the region, followed by an early snowstorm that wreaked havoc on tree limbs that downed power lines, in a familiar scenario. Whereas the state's investor-owned utilities took up to a week to restore power in a well-publicized situation, the state's municipal utilities were back online in days, according to local reports.

Obviously, that's a general statement and the proponents and opponents of change in Massachusetts are busy arguing the issue. We know that scale in the form of hundreds and thousands of miles of power lines can bedevil a large organization. But proponents of municipalization in Massachusetts argue that they have the metrics to bolster their position, such as the fact that the number of linemen per resident is significantly higher among the state's munis and the latter's customers pay significantly lower rates than at the region's IOUs. Apples to apples comparisons of outage data is difficult to create, because munis aren't subject to reporting metrics similar to IOUs.

Thus a battle over municipalization has been joined. And it gets rejoined every two years because any bill not passed by the state's legislature must be reintroduced. The bill to streamline and modernize the municipalization process has been filed five times in 10 years. (Do the math.) The mechanisms for the bill's failure over time appear to vary. But the bill's preliminary passage by one Massachusetts joint committee last month contained mysterious language suddenly making significant demands on local munis—a provision certain to doom its passage by the very communities that have already municipalized.

I've painted this issue today in broad strokes, because there are several parties involved—local activists bent on enabling their communities to determine their own energy future, IOUs that want to protect their bread-and-butter and have their own arguments against municipalization, a lineman's union that believes further municipalization would hurt, not help, employment and others, including a raft of legislators, each with a campaign money trail and their own parochial interests. No need to call anyone out until I've plumbed the depths of this issue.

Oh, and one other thing. In a story reminiscent of the debacle that PG&E created for itself when it fought a ballot initiative for municipalization in California, the New England Center for Investigative Reporting put out a story last October, "Power Play: Utility Companies Pull Plug on Competition," that documented the massive lobbying dollars that the region's IOUs spent to defeat the municipal power bill. Give it a read. 

And then ask yourself why we've written extensively for the last two years on the miserable level of trust between ratepayers—I mean, "customers"—and publicly traded utilities.

Phil Carson
Intelligent Utility Daily




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