Reprinted from the New Bedford Standard Times - January 12, 1995

Bill Would OK Utility Rate Bidding
Cities, Towns Could Shop For Lower Costs, Montigny Says
by Patrick Collins
Standard-Times staff writer

Cities and towns suffering from high electric rates could shop for lower ones and cut ties to expensive power companies under a bill unveiledWednesday that would open the utility industry to competition.

The bill, filed by Sen. Mark C.W. Montigny, D-New Bedford, would allow cities and towns to solicit bids from utilities to compete with each other for customers.

Backers of the plan say it would force inefficient, expensive utilities to cut costs and charge consumers less. The existing system offers utilities no incentive to cut their costs, they contend.

"The competition is going to bring down rates and make them all more effective," said Sen. Montigny.

The bill would allow a city or town to declare itself a "consumer service district," enabling it to ask utility companies to submit their best prices for electricity.

The city would choose one company and send the contract to the state Department of Public Utilities, which would ensure consumer and environmental protections were included and low income consumers were protected.

If the current provider of electricity failed to win the contract, its investment in setting up the municipality's infrastructure would be calculated and shared between the utility and ratepayers.

The bill attempts to avoid the pitfalls of so-called retail wheeling, another form of competition in which large industrial consumers of electricity are allowed to leave one utility for another. Under that scenario, the rates of the residential customers who are left behind usually rise to make up for the departed companies, creating a spiral of rising rates.

....Locally, the proposal was welcomed by the region's business leaders who have complained bitterly about the chilling effect on bsiness of the high cost of Commonwealth Electric Co.'s service.

"The New Bedford Area Chamber of Commerce has always been an advocate of competition, which alone will bring a sustainable reduciton in energy costs and make the regional economy competitive again," James M. Mathes, president of the New Bedford Area Chamber of Commerce, said in a statement.

A press release announcing the bill contained praise from the representative of a national consumer group, who said the proposal addresses concerns about consumer and environmental protection.

"Sen. Montigny's proposal has the potential to do the best job of all the ideas now on the table for meeting these challenges," said Nancy Brockway, staff attorney at the National Consumer Law Center.