Our Winter of Discontent

This year's heating bills are going to be brutal. Keyspan expects natural gas prices to go up by 50%. And in case you haven’t already heard, our electric bills will be going up too. NSTAR got a 27% rate increase approved. And that’s not even the bad news.

The Cape Light Compact may go out of business next year.

The Compact originally set up as a municipal buying cooperative, decided to go into the aggregation business by offering consumers and business the ability to opt in to the power supply buying pool. Over the past couple of years, they have had success negotiating lower electricity rates for the larger pool of customers.

Until now, those who were in the Cape Light Compact pool have enjoyed competitive electric rates. But this year will be different. The Compact hasn’t arranged for a contract when this one expires. With ConEdison or any other supplier. Chances are that all the suppliers will not only be getting higher prices, higher than Nstar’s, but they may not even be in a position to contract with the Compact.

The result will be that the Compact customers will be paying more, more than the Nstar customers, maybe lot more. That’s if they stay in the Compact. For the first time in recent years, Nstar may have the better rates, as lousy as they will be.

Therefore, customers will be opting out of the Compact over to Nstar. Except of course for the municipalities that are bound to stay in the Compact. The Compact may avoid going out of business altogether because of those municipal customers, but they too will be very unhappy that they are stuck in the high cost pool. No matter though, it’s the tax-payers that will be footing that bill. But if the Compact can’t find a lower cost source of energy, they may eventually have to vote to disband.

Governance does matter. You may rightly be asking, who’s been running the Compact? A fair answer would be a competent staff, covering for a not so competent Governing Board. Appointed by their respective Boards of Selectmen, the Representatives are not elected by the rate payers. And therein lies the pitfall.

The Towns appoint the Representatives to the Compact. A system designed when the only customers were the municipalities. But if the Compact now includes residential and commercial customers as well, who represents them? Their interests are not necessarily the same as the municipalities. Especially when one group can opt out while the other has to stay in. The Compact Representatives will never vote to favor the whole over the part that appoints them.

See the problem, enter the solution. Representative Matt Patrick (D-Falmouth), who has alot of experience in these issues thinks that the Cape Light Compact should have elected representatives. This would balance the financial interests of both constituencies. He is filing legislation authorizing it.

The Towns oppose this, of course. They would lose control. The Compact Representatives oppose it too. Most of them would lose their sinecure. The County opposes this because, well, it goes against its go along to get along culture. The Cape Cod Times is opposed to the proposal because they are deaf to anything Rep. Patrick has to say, (he’s beaten them twice at the polls).

If you want to get the best possible deal on electric rates, the combined buying power of the Compact is a good thing. Until it becomes too much of a good thing.

Blind to the obvious. The Compact needs to find a low cost energy solution to stay in business, and to, incidently, provide the maximum benefit to its customers. There is on our doorstep the potential for the mother of all lost cost energy supplies. But the Compact will not even contemplate buying electricity from Cape Wind, despite the obvious cost advantages stretching out for decades, and the other health, environmental and economic benefits to the Cape's residents. This would be a violation of the political code that exists on the subject.

We couldn't possibly expect the Representatives to consider such a thing in light of the fact that the very same Selectmen who appointed them also voted to oppose the wind farm. All the players understand the political ramifications of having the Compact negotiate to buy the electricity generated by Cape Wind. It would be political suicide for all concerned. The whole finely tuned political order would collapse.

Maybe, it will require an elected governing body to tackle the difficult decisions. Otherwise, it will be interesting to see if the Compact can swallow the hard political reality and re-consider buying Cape Wind's energy to save their own skin. Unfortunately, it will take a crisis to finally get the Compact to do the right thing.