Council Blasts CELCO Rate Structure
Calls Charges Too Generous to Large Companies, Institutions
The City Council passed several resolutions last night protesting the Cambridge Electric Light Company (CELCO)'s plan to restructure billing rates in favor of large institutions and businesses.
The new pricing system, designed by the Massachussetts Department of Public Utilities (DPU), is scheduled to take effect on June 1, 1988, and witnesses at last night's Council hearing said little could be done to change it before then.
In a non-binding resolution, the Council asked CELCO to file a fresh proposal with the DPU that would not place the burden of the city's electricity costs on smaller consumers.
The City Council also voted to battle the pricing system. According to State Sen. Michael J. Barrett '70 (D-Cambridge), who testified at the hearing, it would result in staggering rate increases for private homes and smaller businesses, and decreases for larger businesses and institutions.
In a third resolution, the Council asked Barrett to legislate against the new rate system. But the senator warned that it was unlikely that much could be changed in the next two to three months.
"City councils in general have felt helpless to act," said Barrett, adding that the issue has received little attention so far.
The DPU has encouraged but not required the local company to use the new system.
Universities Would Pay Little More
While large insititutions such as Harvard and MIT will receive a rate reduction of three to four percent per month on electric bills under the new plan, State Sen. Michael J. Barrett '70 (D-Cambridge) testified that residents and smaller businesses will face increases of 37 percent or more per month.
Barrett testified at the public hearing that 20 percent of Cambridge will see an average increase of 29 percent or more in their monthly bill. Ten percent of Cambridge residents, he added, will see an average increase of 37 percent or more. Those who receive Social Security Income benefits, however, will receive a discount in their bill, and comprise the one group entitled to an exemption in the restructuring.
The state attorney general's office was represented at the hearing and has presented a brief to the DPU taking issue with the new rates. Barrett said regulatory agencies such as the DPU tend to resist political pressure and that the agency is very autonomous with a powerful chairman.
Barrett described DPU's response to criticism as "fiercely protective of current policy" and added that although it acknowledges the effect on small users, the agency "sees some value in a pure, economic approach to pricing."
The senator criticized the rates as the result of "egg-headed economic theory" designed to put the burden upon the small consumer.
"I find myself very, very troubled by the position of the State Department of Utilities," said Councillor Francis H. Duehay '55. Councillor Alice K. Wolf said that the new system granting discounts to larger users was contrary to conservational efforts.
Barrett encouraged CELCO to embrace the "principle of continuity," and continue pressuring the Massachussetts DPU to reconsider the burden it would place on the "small person." The Council voted to encourage the company to examine the Attorney General's testimony before the DPU in favor of "shrinking base rates" to relieve smaller consumers.
In the 1970s, said Barrett, "the DPU revieweved itself as pro-consumer" and attentive to the prevention of "sudden rate shock" like that facing Cambridge residents now. Yet in recent years the department has used "abstract economic decision-making" which has resulted in a system of charging lower rates for those who consume the most, he said.
Lowest Rates in Mass.
CELCO representatives at the hearing noted that the people of Cambridge now pay the lowest electricity rates in Massachussetts.
Councillor William H. Walsh noted the lack of incentive for the utility company to follow the Council's exhortations, but the Council called upon the "good will" of the company towards the community.
But Councillor Alice K. Wolf cited the need for reciprocity between the city and the electric company. "They need to use our roadways," said the Councillor, "so they need a good relation with the city as well."
Arguing that "it's no skin off their backs" how the rates are structured, Wolf said she saw no reason for the utility company not to comply with the Council's request.