"Cape Light Compact" Sparks Regional Movement for Electric Franchise in Massachusetts

Twelve of fifteen towns in Barnstable County, Massachusetts have voted in town meetings to aggregate local residents and businesses for electric service behind their county government in a "Cape Light Compact." The Compact, whose leaders have been uniquely present as local government officials in the state's electric deregulation debate, has inspired a growing movement for "Community Electricity Franchising" rights among towns in Southeastern Massachusetts that now includes a seven-city compact in Greater New Bedford. Meanwhile, forces in the State Legislature are working to stop them as deregulation approaches.

"The Community Electricity Franchise is something every city and town in the state should consider carefully," says Cape Light Compact member Matthew C. Patrick, who is also a Falmouth selectman. "Towns can group together many small customers to make one very large customer of electricity," he says. "That is potentially the key to lower electricity rates and green power, and more reliable than the California-style temporary 10% rate discount that some (Massachusetts) legislators have proposed." The Cape Light Compact represents 180,000 potential consumers and approximately 300MW of average demand. Patrick said that the Compact is in the final stages of completing its inter-municipal agreement, and is following the progress of State legislation filed to protect threatened local governments' rights as "aggregators" in the state's electric deregulation debate.

Following the initial votes of five towns to form the Cape Light Compact last Spring, the town of Acushnet twenty miles south voted in a town meeting to pursue the formation of a similar regional compact with its neighbors. The surrounding municipalities of New Bedford, Fairhaven, Freetown, Rochester, Marion, and Westport have all since voted in town meetings to pursue formation of "Community Electricity Franchises" modeled on the Cape Light Compact.

Acushnet Power Steering Committee member Irwin Marks said that the next step is to get an agreement signed among New Bedford Compact towns. Acushnet has hired Boston firm Bernstein, Cushner and Kimmell to represent the Compact and to design a Request for Proposals for competitive bidding among power suppliers. "If these seven communities stay together, we will have over 160,000 residents buying power together as a group, with the market power to attract competitive suppliers, and the public authority to set terms." Marks said that the New Bedford Compact's RFP will include renewable energy and efficiency requirements, and potentially a "no coal, no nuclear" provision.

Ironically, the Cape region's own state Senator, Henri Rauschenbach (R-Cape & Islands) has cosponsored legislation that would hobble the Cape Light and New Bedford Compacts. The legislation would prohibit cities and towns from acting as "default providers" to the approximately 4 of 5 of consumers who are not expected to shop in the deregulated market. The bill would reserve that role for current utility companies, such as Commonwealth Electric, whose service territory includes Cape Cod and New Bedford. The bill also prohibits cities and towns from entering into critical long-term contracts with consumers, while allowing all other for-profit "aggregators" to do so. Said Patrick, "Instead of giving this community a way to organize ourselves, Senator Rauschenbach seems to think that Commonwealth Electric should continue to ‘own' 80% of Cape Cod's consumers as a deregulated company."

Electricity deregulation in Massachusetts is scheduled to begin January 1, 1998. The rights of towns to form Community Electricity Franchises will be considered by the Massachusetts Legislature this fall, including Senate Bill 1714, Community Electricity Franchising legislation co-sponsored by the Cape Light Compact and Senator Mark Montigny (D-New Bedford), who sponsored the original "Competitive Franchising" bill, Senate 447, in 1995.

Copyright 1997 by the American Local Power News