Bill H3294 - Establishment of municipal lighting authorities
The 41 existing municipal electric utilities (“Munis”) in Massachusetts (incl. Concord, Wellesley, Braintree, Norwood, Peabody, Ipswich, Shrewsbury or Taunton) serve 15% of the State’s population. Compared with investor-owned utilities (“IOUs”), Munis generally offer better reliability (fewer outages) and favorable rates (lower than NStar by 24% for residential customers and by about 10% for commercial accounts over the past 12 years in the greater Boston area). Nationwide, there are about 2,000 Munis including in Los Angeles, Seattle, Cleveland, Austin, San Antonio, Sacramento, Omaha and Orlando.
- Munis save most residential consumers 24% on average on their electric bills
- Munis offer better electric service with improved reliability
- Munis respond to local priorities (e.g. clean energy, place wires underground)
MGL Chapter 164 outlines the process a city or town must follow to acquire the distribution infrastructure from the incumbent IOU and operate it as a Muni. But no new Muni has been formed in Massachusetts since 1926 because Chapter 164 as it now reads makes the process impractical.
H3294 clarifies Chapter 164 by explicitly stating that once a fair value has been established for the IOU’s infrastructure, the sale must occur. H3294 also adjusts certain time lines, creates a review process for the economics of new Munis and limits at 3 per year the number of new Munis that can be formed.
By making the formation of new Munis practically feasible, H3294 introduces a form of competition for IOUs which will lead them to reduce their rates and improve their service even if very few new Munis are formed. In the case of Lexington, a Muni would address local priorities with lower rates than NStar’s, saving Lexington residents, businesses and the Town $6-8 million annually.
H3294, filed by Representative Jay Kaufman, is co-sponsored by 40 legislators.
114 communities and organizations across Massachusetts endorsed Bill H3294 or its predecessor (Bill H1468 in the 2003-04 session) which the Boston Globe called "A promising bill [...that] would restore some power to the consumer".
Prepared by the Lexington Electric Utility Committee (9/19/05)