Boston utility NStar’s plan to let customers buy wind-generated electricity is running into a gale of opposition from a rival “green power” provider, who said yesterday NStar’s program would violate state law.
Although Attorney General Martha Coakley and the Conservation Law Foundation, a Boston legal-environmental group, are backing the NStar plan, Larry Chretien, executive director of the Massachusetts Energy Consumers Alliance, said it violates the 1997 state utility restructuring law.
That law, Chretien said, limits utilities to being “distribution companies” that deliver power that customers buy through the utility from independent third-party energy producers and means NStar can’t legally become the supplier of power through contracts with wind farms in upstate New York and Maine. NStar plans to begin offering wind power by Jan. 1, pending state approval.
The energy alliance was formed in 1982 as a discount home heating oil buyers’ cooperative that now has 7,000 members. It has since branched out into other energy programs, including selling a portfolio of green power – including solar, hydroelectric, wind, and power produced from lumber and crops – to about 4,000 customers of National Grid USA, the former Massachusetts Electric Co. The alliance also sponsors a fund to promote wind energy in Massachusetts.
The alliance has pushed to get NStar and Western Massachusetts Electric Co. to let it sell green power contracts to their customers, but neither utility has agreed.
Chretien, in an interview yesterday, said he’s pleased that NStar is taking steps to promote wind power. But, he said, “The rules as we see them are pretty clear-cut: Massachusetts law does not authorize distribution companies to deliver green product offerings to consumers.”
Chretien noted that in a 2003 ruling the state utilities commission said it was approving National Grid’s GreenUp program, which markets the alliance’s green power plan, only because it “ensures that, at such time that competitive options develop for smaller customers, the competitive market, and not distribution companies, will deliver ‘green’ product offerings to customers.”
The alliance has asked the Commonwealth Utilities Commission to rule that utilities can’t sell anything other than “basic service” electric plans under which homeowners and businesses pay the utility to get them electricity from power-plant owners. Commissioners haven’t decided whether to take up the question.
NStar, Coakley, and the Conservation Law Foundation all rejected Chretien’s criticisms. “We believe that this program is consistent with the law, including the  restructuring act and will increase clean-energy choices for electric customers,” said Susan Reid, a foundation staff attorney. “The need to jump-start the voluntary renewable energy market justifies the introduction of a well-constructed program offered by local utilities.”
NStar spokeswoman Caroline Allen said, “We don’t have any question that this is legal.” The only issue the utility commission has to rule on, Allen said, is letting NStar sign 10-year contracts with the Maple Ridge and Kibby Mountain wind farms in New York and Maine, respectively. State law restricts utilities to signing one-year power supply contracts.
Coakley spokeswoman Emily LaGrassa said, “We stand by the legality of the settlement.” She declined to comment further.
As is standard, state utility commission officials had no comment because the NStar Green plan is part of a pending case commissioners will rule on. The wind-power offer is part of a three-piece legal settlement between Coakley and NStar. NStar also is agreeing to test “real-time pricing” plans under which customers would pay fluctuating wholesale prices instead of a flat rate, giving them much stronger incentives to conserve power on hot summer afternoons when wholesale prices soar.
Also, NStar and Coakley agreed to reduce payments to NStar under a pact it made with her predecessor, Thomas F. Reilly, letting NStar shareholders keep part of the savings from NStar lobbying efforts with federal regulators it can show cut customers’ bills.
By Peter J. Howe
26 July 2007
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