Response To Mass. Taxpayers Letter
In "‘Muni' Op-Ed Painted Too Rosy Of A Picture" (4/12/10), Mr. Widmer misrepresents a Department of Energy Resources (DOER) report on municipal light plants (munis), much like investor-owned utilities (IOUs) routinely do.
The report is at www.mass.gov/Eoeea/docs/doer/publications/doer-municipal-utility-rpt.pdf and a summary is at www.massmunichoice.org/Documents/Annotated summary of DOER muni report.pdf
DOER found that existing munis charge much less than IOUs, but noted "A new municipal utility, however, will likely have higher rates than the typical existing municipal utility" and that a location-specific study will be necessary to determine the economics of each new muni. That's very different from Mr. Widmer's assertion that new munis are unlikely to charge less than IOUs.
Existing munis do not let customers shop for power (charging less than IOUs, why should they?) and do not always offer comparable green energy programs as IOUs. But the legislation to allow new munis (bills H3087 and S1527) requires new munis to match IOUs in all these areas.
Regarding low-income customers, DOER's key finding is that muni rates for all residential customers are lower than the IOUs' discounted rates. In 2008, the standard muni rate - $66.70 - was less than IOUs charged low-income customers under their low-income discounted rates - $72.77, $67.71, $83.22, $69.67 respectively for NStar, National Grid, Unitil and WMECO (exhibit 25 of the report).
Regarding service, neighboring munis restored power much faster than Unitil after the 2008 ice storm, and blue-sky outages still happen in Unitil's territory, but not where munis provide service.
The "perils for customers and taxpayers" that Mr. Widmer fears from new munis are why the legislation requires a full review of the economic feasibility of each new muni by the local community, and by the state.
There are no such reviews about the compensation of IOU executives, $7.4 million and $1.3 million for the CEOs of NStar and Unitil in 2009. Taxpayers being also electric ratepayers, can Mr. Widmer's Massachusetts Taxpayers Foundation do something about this?
Supporting new munis in Massachusetts to end the IOUs' monopoly would be an effective first step.
Patrick Mehr
Massachusetts Alliance for Municipal Electric Choice
WBJ Web Partners
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