Cost of Power & Settlement Agreement

The cost of power was a major issue in the early 1980s, as rising fuel prices pushed up electric bills. Repeated wholesale power cost increases from Boston Edison prompted the Light Plant to take legal action on several occasions, often in concert with other municipal wholesale customers. The legal actions, while time consuming, resulted in multi-million dollar savings for electricity consumers in Concord, as case after case was decided in the Town’s favor. The 1980 settlement between Concord Municipal Light Plant (CMLP) and Boston Edison allowed Concord to purchase the use rights to the 14 kilovolt distribution facilities located between Edison’s Lexington substation and the town line. CMLP also bought the Edison facilities within Concord that were used solely for Concord’s service.

The agreement stipulated, in part, that Edison would not make any wholesale rate increases before retail increases. This was to prevent further price squeezes. The provision became effective March 1, 1980, and ran for five years with a possible renewal in another five years unless either party canceled. Not surprisingly, Boston Edison canceled the 1980 agreement after exactly five years and began raising wholesale prices again. By the mid-80s, Edison’s actions had placed Concord in another price squeeze, resulting in another anti-trust case. This time a jury awarded CMLP $5.9 million, with treble damages, for a total of $17.7 million. Unfortunately, the award was overturned on appeal by Edison, and the U.S. Supreme Court declined to consider the matter.

New England Power Pool

In 1982, CMLP joined the New England Power Pool, an organization that monitored and controlled the region’s power supply in order to minimize outages and maximize economy. That same year, the Light Plant joined the Massachusetts Municipal Wholesale Electric Company, a nonprofit, public corporation created to provide power supply, financing and other services to the state’s municipal utilities. These moves allowed CMLP to consider other wholesale power options in addition to those offered by Boston Edison. The mid-80s brought some good news in the area of power supply, when Federal authorities ruled that residential customers of municipal utilities in Massachusetts were entitled to receive a share of low-cost hydro power from the New York Power Authority. The savings from this low-cost power appeared as a credit on customer bills.