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Hybrid Action Suggested on RMLD Energy Credits

Still a contentious issue.

Sell them? Or retire them? Renewable energy credits (RECs), that is. The selectmen discussed options Tuesday with Tony Capobianco, the town’s representative to the Citizens Advisory Board of the  (RMLD). The decision could affect RMLD customers' rates.

The light department’s advisory board originally voted 4-1 to retire the RECs in the name of sustainability, Capobianco told the selectmen.  But, based on a “backlash” to that vote, the board voted to reconsider the vote, he said, and to meet with governing boards in the four communities that the light department serves: Reading, North Reading, Lynnfield and Wilmington.

After “agonizing” over the issue, Capobianco said he voted to retire the RECs because he supports sustainable energy.

But “everyone” wants the light department to sell the credits, Capobianco said.

Capobianco met with the selectmen to get their opinions on the issue.

Energy companies earn the credits when they buy energy from green sources.  Non-municipal energy companies must use a certain percentage of green energy, by government regulation. Companies can buy RECs to meet that requirement.

The value of the RMLD RECs, Capobianco said, is between $500,000 and $2 million this year – to customers, between $6 and $24 -- or 15 times that amount over a 15-year energy contract, Capobianco told Patch.  The credits’ value varies over time, according to Tuesday’s discussion, based on several factors, including demand.

Municipal power companies are not required to consume green power, Capobianco said.  He said he can foresee that rule changing.

RECs are created new every year, according to Town Manager Peter Hechenbleikner. “You don’t keep them like monopoly money.”

Sell at least some of the light department RECs, said several selectmen.  Make the best decision for ratepayers, said Selectman James Bonazoli and Selectman John Arena.

But from the audience, Ron D’Addario urged the exact opposite course of action. Selling RECs to large utility companies means they can still burn coal, for example, to make energy, he said.

You can’t say you’re sustainable if you sell RECs, Capobianco said.

In the end, the selectmen agreed by consensus with several suggestions from Hechenbleikner. The sell or retire decision can be a hybrid of both. Decisions to sell or retire REC’s should be reviewed every year.

A member of the RMLD Board of Commissioners, Philip Pacino, has proposed a plan for RECs.

Let the percent of customers in the RMLD’s Green Choice program determine how many of the RMLD’s RECs are retired and not sold. Pacino hopes “at least 5 percent” of customers would initially join this program, he wrote in a letter included in the selectmen’s meeting information packet.

Some RECs should be sold, Pacino wrote.  Money from the sale of those RECs should be “put aside” for renewable energy capital projects in the RMLD service district,”reducing the amount of energy consumed there.  Such a change would require some adjustment in the way rates are set, he wrote, because proceeds from the sale of RECs “must go back into the fuel charge fund and thus cannot be directly allocated to a renewable energy capital projects fund.”

Enrollment in the green program is “not high,” Capobianco told Patch Wednesday -- between 400 and 500 of what he estimated to be 100,000 ratepayers.

Karl Weld March 17, 2012 at 12:35 PM
Yes, thankful indeed. But the State is aiding in that criminal beahvior, what with forcing NStar to buy Cape Wind power at $0.18/kw instead of hydro at $0.06/kw. I wonder who gets to foot the bill for that increase in price? Oh yeah, the rate payers. I also wonder how long until the Big Boys get Beacon Hill to force municipal utilities into the same bad deals to make things "fair".
Barry Berman March 19, 2012 at 12:06 PM
Karl, not even a stretch to suggest poor customer service is tied to buying green power. Nice try though.
Karl Weld March 19, 2012 at 05:02 PM
Could you clarify this comment. I'm not sure what you're driving at. I thought you were talking about how much more expensive their electricity is compared to ours. If not, please tell what you were referring to.
Barry Berman March 20, 2012 at 12:26 PM
My initial point was we are blessed to be served by a utility company which gives excellent customer service. As you may have read, NStar didn't keep customers informed during the blackout, did not have the proper generators on hand, and they refuse to reimburse businesses for the losses they incurred. As for rates, I believe our rates are about 20% less than a comparable NStar bill. You are off base to link that higher cost to the purchase of green energy. I understood that the state requires investor owned utilities to have 7% green power in their portfolio. We have 2%. That difference does not explain the wide gap in the average bill. RMLD is run leaner, is better managed, and does not give huge bonuses to its executives - again something we should be thankful for.
Karl Weld March 20, 2012 at 01:52 PM
Paying higher costs for Green energy certainly isn't going to lower rates. And when there are cheaper Green sources, mandating that the utility buy it from a Green source that costs 3 times as much certainly won't lower rates. So government is indeed affecting electric prices. Your point about management compensation affecting rates is spot on since salaries are part of operating costs which are paid for by rates. So, with regards to RMLD running more efficiently and with lower operating costs, we are indeed very lucky. Their customer service is a greatly appreciated bonus.

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