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CAPE LIGHT COMPACT

PRESS RELEASE

JULY 7, 1999
FOR IMMEDIATE RELEASE
For Further Information Contact: Margaret Downey (508) 375-6636

CAPE LIGHT COMPACT SEEKS TO REMOVE PARTIES BLOCKING POWER CONTRACT

Barnstable, Massachusetts - The Cape Light Compact announced today that it is engaged in an attempt to remove two parties who have been blocking the Compact's contract negotiations with a power supplier. The two organizations, National Energy Choice (NEC) and the Massachusetts Municipal Association (MMA) stepped in to block the Compact's negotiations on May 19th. They claimed a prior agreement with the power supplier that gives them exclusive rights to serve all Massachusetts cities and towns.

"The problem hasn't been the Compact or the supplier, it's been the parties standing between us," said Dennis Selectman Robert Mahoney, who serves as chairman of the Compact Governing Board. The Compact was very surprised by the intervention of NEC and MMA. For the past six weeks the Compact has worked diligently to have these parties step aside. We've reached a point now where the delay they have caused has affected our negotiating position with the power supplier and may jeopardize the savings we can bring to Cape and Island consumers."

"We have tried to resolve this privately, but with public questions increasing on the cause of the delay, we also have a responsibility to the public to explain what's going on," he added.

"One of the ironies here is that Cape and Vineyard towns are members of MMA, but apparently their goals are in conflict with the Compact's," said Tom Bernardo, a Chatham Selectman and president of the Cape Selectmen and Counci8lors' Association. Other selectmen expressed the belief that MMA and NEC fear that success of the Compact program to provide competitive power supply for all consumers will undermine the NEC and MMA program which serves only school and town buildings, or chambers of commerce. On the Cape, the Town of Orleans is currently served by the MMA program and the Cape Cod Chamber of Commerce has reportedly signed a contract with NEC.

The Cape Light Compact issued a request for proposals on January 26th, and in March received four responsive proposals. The Compact then held discussions with all the prospective suppliers and focused on one particular supplier in May. The Compact and the supplier had reached agreement on most key contract terms and were prepared to sign a letter to lock-in prices. National Energy Choice and the Massachusetts Municipal Association, which had also submitted a separate bid using electricity from the same supplier the Compact was negotiating with, were informed that they would not be recommended. NEC and MMA then informed the supplier that they would not allow the letter to lock-in prices to be sent to the Compact. They also wanted to review and approve the contract terms between the Compact and the supplier.

"The day after they blocked our ability to lock-in prices with the supplier, we asked them to step aside," said Mahoney. "We suggested mediation at the outset. They turned that down. We suggested a four-way agreement with terms under which they would step aside and they initially turned that down as well, but after calls were made to the MMA Board of Directors by Cape and Vineyard selectmen, they agreed to sign an agreement with the Compact. The difficulty has now become getting language that is meaningful and enforceable. We are looking at all of our options to resolve this situation."

"Hopefully, we can get agreement on language so NEC and MMA will step aside," said Compact counsel Jeffrey Bernstein. "Some progress has been made, but critical issues remain unresolved, and good intentions only will not resolve those issues. They need to accept that they cannot influence or control the contract between the supplier and the Compact. And the agreement has to be fully enforceable."

"We don't want NEC or MMA to interfere with the Compact's contract in the future," Mahoney explained. "We don't want them to limit the kinds of programs we can develop with the supplier, and we don't want them to undermine improvements we can make on prices and speeding up the schedule under which consumers get competitive service. They can compete with us, if they want, but they have to do it on fair and open terms. We want competition to succeed in Massachusetts, and we want it to succeed on terms under which everyone benefits.

"The supplier has stated that they still want to serve us, but it is going to depend on whether the terms of the deal have changed," said Mahoney.

The Cape Light Compact is a cooperative effort of Barnstable and Dukes counties and 20 towns on the Cape and Vineyard. The Compact was formed in 1997 to protect the interests of consumers and provide consumer options in the new restructured electric industry. It is developing two primary programs: 1) "Community Choice" competitive power supply program which allows voluntary participation by consumers; 2) the Compact energy efficiency program, which will seek to recover and earmark for use in the towns a portion of the $25 million consumers are slated to pay during the 1998-2002 period. The Compact also offers professional representation for consumers at the state level and in negotiations with Commonwealth Electric.

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Copyright (c) 1999 by the American Local Power Project.