MassPIRG statement on Mass Restructuring

[Lisa Marina Brooks <lbrooks@essential.org>]

  CONSUMERS FOR AFFORDABLE, CLEAN ELECTRICITY
  
  
  Recently there has been much discussion about the deregulation of
  the electric utilities.  The stakes are high for citizens who
  care about rates, reliable power, and environmental improvements. 
  Earlier this month, Massachusetts Electric and the Attorney
  General unveiled a proposal that they believe should serve as a
  model.  As with all proposals, the devil is in the details.
  
  CONSUMER PROVISIONS OF THE MASSACHUSETTS ELECTRIC DEAL:
  WHAT'S INSIDE THE RATE REDUCTIONS?
  
  
  RATE REDUCTIONS FOR CONSUMERS?
  
  * The reductions should be greater.  A short-term rate reduction
  of 10% is being offered in return for ratepayers picking up the
  tab for bad decisions in the past.  If the same formula were
  applied to all Mass. utilities, Massachusetts consumers would be
  bailing our utilities to the tune of $1.3 billion/year for
  anywhere from 2 - 12 years.
  
  * The rate reductions are not guaranteed.  The following are
  instances in which consumers rates would go up:
    * Fuel price increases would be reflected in consumer rates.
    * Increased taxes on the utility that would be passed onto
  consumers.
    * Mass Electric is guaranteed a 6% rate of return or they will
  pass the costs onto ratepayers to achieve such a percentage.
  
  * The 10% "savings" also comes from shifting costs onto consumers
  elsewhere.  Mass Electric intends to raise the rates it charges
  for others to use its wires by 200% or more.  This merely passes
  costs onto other utilities' captive customers.
  
  UNFAIR MARKET ADVANTAGE
  
  * This agreement allows Mass Electric to establish a marketing
  affiliate and explicitly forbids it to share customer or
  potential customer information with it's marketing affiliate. 
  However, it appears that Mass Electric could easily have an
  unfair market advantage because there is no way to enforce this
  "code of conduct".  Consumers are expected to trust the utilities
  to "do the right thing" with their money.
  
  LACK OF REAL COMPETITION
  
  * The plan allows for Mass Electric to "re-enter the generation
  business" after divestiture, which could lead us to an
  "unregulated monopoly" structure instead of the "free market"
  structure of tomorrow that this entire plan was created for.
  ENVIRONMENTAL PROVISIONS OF THE MASS. ELECTRIC DEAL: WILL THEY
  REALLY PROTECT OUR HEALTH AND OUR ENVIRONMENT?
  
  
  AIR POLLUTION
  
  * The state's dirtiest power plants would not have to clean up
  their act until 2010 under this plan, and it is even possible
  that the state's dirtiest plant would be allowed to continue to
  operate without meeting the same standards as new plants, even
  after 2010.
  
  * There are also provisions that do not require Massachusetts
  power plants to clean up their air pollution until plants in
  upwind states, such as in Pennsylvania and Ohio, do.
  
  * Under this plan, the new air pollution standards that plants
  would have to meet might not be strong enough to meet health
  standards for smog or air toxics, like mercury and small particle
  pollution, which is responsible for over 1,000 premature deaths
  in MA every year.
  
  NUCLEAR SAFETY
  
  * Deregulation's impact on the nuclear power industry will have
  serious effects on public health and safety.  By keeping nuclear
  plants operating in a free market, we could have a "ValuNuke"
  on our hands -- a plant which will cut costs and safety
  precautions to be more competitive.  
  
  * Under this plan, ratepayers would pay to subsidize the ongoing
  operation of nuclear power plants because they can not
  economically compete in a free market.
  
  * Rather than throwing an economic lifeline to these hobbled
  plants, we should be closing them and putting resources into
  safer, more economical ways of generating electricity.
  
  REDUCED ENERGY EFFICIENCY
  
  * Under this plan, financial support for energy efficiency
  programs starts below existing levels and gets reduced by one
  third over four years with no guarantee of any economic support
  after the fourth year.
  
  INADEQUATE REQUIREMENTS FOR CLEAN, RENEWABLE ENERGY
  
  * There is no requirement that electricity suppliers have a
  minimum amount of clean renewables as part of their energy mix.
  
  * Unfortunately, while support for renewables is increased, like
  energy efficiency, there is no guarantee that renewables will
  have any support after the fourth year.
  
  For more information, contact: Cindy Luppi of Clean Water Action
  (617) 423-4661, Patti Lynn of MA Citizens for Safe Energy (617)
  292-4821, Laura Scott of MASSPIRG (617) 292-4800, or Ed Kelly of
  Citizen Action (617) 491-8859.
  
  
  _____________________________________________________________________________
  
  To receive regular alerts on energy policy through the Internet, sign up for 
  the Critical Mass listserver by sending the following message to: 
  listproc@essential.org
  
  SUBSCRIBE CMEP-LIST Your Name - Organization (no acronyms) - Home state
  
  The Critical Mass Energy Project world wide web site is located at: 
  http://www.essential.org/CMEP
  
  The Critical Mass email address is cmep@essential.org