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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, formerly Boston Edison, Cambridge Electric and Commonwealth Electric, Mass Electric, Western Mass Electric or Unitil ); IOUs serve most of Massachusetts.

  • or a municipal electric utility, or "Muni", in yellow on the map ; there are currently 41 Munis in Massachusetts, including in Braintree, Norwood, Ipswich, Peabody, Danvers, Reading, Concord, Belmont, Wellesley, Shrewsbury, Holyoke, Westfield and Taunton; Munis serve 15% of the Massachusetts population.

    Since restructuring in 1997, Massachusetts IOUs no longer generate electricity. IOUs only distribute electricity to end-users and, just like many Munis, IOUs purchase their electricity wholesale from power plants (or middlemen).

    Compared with IOUs, Munis generally offer:

    State law (MGL Chapter 164) allows a city or town to create a Muni by acquiring the distribution equipment from the incumbent IOU at a fair price. But Chapter 164 needs clarification for that option to become truly feasible. No Massachusetts community 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 during the 2003-04 session after it became part of a broader electricity bill which itself did not move forward.

    For the current 2005-06 legislative session, 40 legislators refiled a bill to clarify our State law. Representative Jay Kaufman is the chief sponsor of this bill, known as "H3294, an act relative to the establishment of municipal lighting authorities", also sponsored by Representatives Cory Atkins, Ruth Balser, Deborah Blumer, Jennifer Callahan, Mark Carron, Robert Coughlin, James Eldridge, Michael Festa, William Galvin, Shirley Gomes, Lida Harkins, Patricia Jehlen, Louis Kafka, Rachel Kaprielian, Robert Koczera, James Leary, David Paul Linsky, James Marzilli, Charles Murphy, Marie Parente, Matthew Patrick, Anne Paulsen, Susan Pope, Michael Rodrigues, Carl Sciortino, Frank Smizik, Thomas Stanley, Ellen Story, Timothy Toomey, Alice Wolf, and Senators Robert Antonioni, Susan Fargo, Robert Havern, Brian Joyce, Michael Knapik, Richard Moore, Therese Murray, Richard Tisei, Steven Tolman.

    Several prominent organizations (including Massachusetts Municipal Association, Mass Energy Consumers Alliance, MASSPIRG, the Mass Climate Action Network, and the Cape Light Compact ) endorsed bill H3294.

    Of Massachusetts's 351 cities and towns, 143 endorsed the legislation (directly, or through the Cape Light Compact or the Franklin Regional Council of Governments) and account for 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 Mass Electric, 40% of the population served by Western Mass Electric and 85% of the population served by Unitil in Massachusetts.

    H3294 is before the Joint Telecommunications, Utilities and Energy Committee which held a public hearing on September 20, 2005. The Boston Globe wrote in an editorial "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."

    Bill H3294 gives 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 everywhere in the State, even if very few new Munis are created. As a result, all Massachusetts residents and businesses will benefit from H3294.

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