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Notifications from WMLP Director, Richard F. Joyce
Most Recent Notification:
Wellesley Townsman, Guest Editorial - February 5, 2009
Electric Industry On The Same Path As The Financial Markets
The same factors that resulted in the 2008 collapse of the United States financial markets have become prevalent in today’s electric utility industry. These factors include a total lack of transparency, overly complicated markets, and, most important, a lack of consumer protection from the agencies empowered with oversight responsibilities. The oversight of the electric utility industry provided by ISO-NE has been a failure, the price of electricity has soared while service reliability is on the decline. Electric consumers in regions that have been deregulated, such as New England, are paying an average of 4.4 cents (60%) per kilowatt-hour more than states that remain regulated. Although residents and businesses served by the Wellesley Municipal Light Plant (“WMLP”) enjoy electric
rates well below those in surrounding communities, we are still forced to absorb higher costs as a result of ISO-NE’s misguided policies.
In the ten year period from 1998 to 2008, under ISO-New England’s policies, transmission costs went from $300,000 to $1.7 million, an increase of 566%. In June 2008 alone, ISO-NE’s transmission costs increased by 33% and are projected to increase by an additional 50% in 2009. By contrast, the WMLP’s distribution costs, the one area of the electric utility industry that is not driven by ISO-NE market rules and policies, increased by less than 1% in the same period.
Prior to the founding of ISO-NE, it cost no more than $20 million per year to operate the New England transmission and generation system, settle the markets for power transactions, and plan for future expansion. Under ISO-NE, that cost has ballooned to $120 million. A recent GAO investigation was unable to determine whether this added cost provided any benefits to consumers. The evidence is that it has not. Prior to ISO-NE’s inception, transmission congestion was a rare event. Under the ISO-NE policies, generators have been able to exploit the market rules to create or threaten to create transmission congestion and force ISO-NE to pay millions of dollars to operate uneconomic generation, the costs of which are passed on to consumers. Also, since the implementation of ISO-NE power
markets, the number of wholesale power suppliers has dwindled and the types and durations of wholesale power contracts has become severely limited. Instead of fostering competition that drives down costs for electric consumers, ISO-NE policies have had the opposite effect.
What needs to be done? ISO-New England needs to be made accountable for the costs passed on to New England’s electric consumers. To make this accountability a reality the 76-members of the Northeast Public Power Association (“NEPPA”), including the WMLP, have begun a petition drive to introduce legislation forcing the Federal Energy Regulatory Commission to make ISO-New England cost justify the impact future policy decisions have on customers. The WMLP has petitions at its office and is asking Wellesley residents and businesses to sign the petition. In addition, we would welcome any assistance that Wellesley residents and businesses would like to provide by circulating petitions or simply having one available for signatures at your place of business. Time is of the essence,
however, as NEPPA would like all petitions returned by February 13, 2009 to hand deliver to our United States Congressmen and Senators the following week.
I would be glad to answer any questions or provide additional information. I can be reached via email: djoyce@wellesleyma.gov or telephone 781-235-7600, extension 3380.
Richard F. Joyce, Director
Wellesley Municipal Light Plant
Previous Notifications:
On June 26, 2007 a letter was sent to customers whom receive service from the 1581 and 1584 transmission lines. Both lines of service were subject to several brief outages over the past twelve months. The letter is above, should you have any questions please call the WMLP at 781-235-7600 and speak to either Mr. Joyce, Superintendent Donald H. Newell or a member of the Customer Service Department.
Letters regarding the electric rate increase sent to all customers from January 13th through February 10, 2007 from WMLP Director, Richard F. Joyce.
The WMLP Power Supply Policy was approved by the Board of Commissioners in November 2006.
Should you have any questions please call the Municipal Light Plant at 781-235-7600, Mr. Joyce's extension is 3380 or Customer Service Representatives are available at extension 3364, 3365, 3369 and 3366.
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