Department of Public Utilities Decision Validates Cape Light Compact

PRESS RELEASE

For Immediate Release: July 30, 2014

Barnstable, MA – The Massachusetts Department of Public Utilities (DPU) has denied an appeal by the state Attorney General’s Office to compel the Hampshire Council of Governments (HCOG) to provide information determined to be outside the scope of DPU review. The decision involves the approval of an aggregation plan submitted to the DPU by municipalities in western Massachusetts that are seeking to form a municipal aggregation group similar to the Cape Light Compact. The DPU hearing officer turned down the Attorney General’s effort to compel a broad investigation of the HCOG aggregation plan on June 5. The Attorney General appealed the decision to the full DPU commission on June 10. On Thursday July 24, the DPU commission issued its order upholding the hearing officer’s decision.

“The commissioner’s HCOG decision last week validates the approach that Cape Light Compact has taken in response to the Attorney General,” said Compact Administrator Margaret Downey. “The Attorney General is bringing issues into a case concerning a municipal aggregation plan that doesn’t belong there. We followed the original DPU June 5 decision and instructions from the DPU on the scope of the hearing on the aggregation plan in refusing to broaden this case.”

Downey said that the Compact has offered on multiple occasions to sit down with the Attorney General and her staff and provide all of the information the Attorney General is seeking (i.e. see attached letter of 7/11/14). “It makes no sense for us to go through the time and legal expense of doing this as part of the review concerning our aggregation plan before the DPU when the DPU had already determined that such questions were outside the scope of the proceeding.” Thus far, the Attorney General has not accepted the Compact’s offer to meet.

“The Attorney General’s response to last week’s decision was to criticize the DPU in a motion filed July 29 to force the Compact to engage in a broad investigation in the case,” Downey said. “That’s why much of the substance of the Attorney General’s motion to compel information from the Compact dealt with rebutting arguments made by the DPU in its HCOG decision, not the Compact. The bottom line is that the Attorney General and the DPU disagree on the interpretation of the law that set up municipal aggregations which gave the DPU certain oversight,” stated Downey.

The law (MGL 164, section 134) grants rights to municipalities to form aggregations and provide energy services to consumers. Those consumers who do not want to take part can “opt out” and choose an independent power supplier or return to the distribution company’s basic service. The Attorney General plays a crucial role in overseeing the Commonwealth’s investor-owned electric distribution companies, which are for-profit monopolies. The Attorney General’s actions in the Compact, HCOG, and City of Lowell (another municipal aggregation) proceedings are part of a pattern consisting of efforts to convince the DPU that the Attorney General’s office should have similarly broad authority in overseeing municipal aggregations. The DPU has consistently found that the different set of laws which govern municipal aggregations do not give the Attorney General the same authority she has over for-profit distribution companies. With more municipalities now following the successful lead of the Compact, the Attorney General is continuing to attempt to gain the same broad authority over municipal aggregations that she has over investor-owned utility companies.

Many of the arguments the Attorney General made in the HCOG case are similar to the arguments made in its efforts to compel information from the Compact. This includes arguments pertaining to whether an operational adder of one mil (one tenth of one cent) per kilowatt hour is a “tax or a fee.”

“The DPU approved our operational adder long ago. It has been part of all of the contracts and plans that we have filed with the DPU for review over the years,” Downey said.

“We will comply with whatever the law requires,” Downey said, “but we do not want to engage in extra expenses, or compromise the Compact’s work that brings tremendous benefits to electricity consumers in our community.”

A decision from the DPU is expected on the Attorney General’s effort to compel the Compact to engage in a broad investigation. “We still hope to sit down with her and her staff outside of this proceeding soon to answer any questions they have and provide whatever information they want,” said Downey.

RELEVANT SECTIONS OF THE DPU Docket 14-10 HCOG ORDER:

Excerpt Page 8

IV.ANALYSIS AND FINDINGS

  1. Introduction

The Requests can be broadly classified as seeking information related to HCOG’s revenue, expenses, and accounting practices (Ruling at 5). The Attorney General claims that this information is relevant to whether HCOG’s consultant charge is an improper tax. In his Ruling, the Hearing Officer determined that the issue of whether HCOG’s charge constitutes an improper tax is outside the scope of this proceeding and therefore denied the Attorney General’s Motion (Ruling at 5, 7). We agree with the Hearing Officer’s Ruling and therefore we find that the Hearing Officer properly denied the Motion to Compel.

Excerpt Pages 12-13

The Department’s standard of review is consistent with Section 134 as a whole and appropriately recognizes that the Department’s role is to review a municipal aggregation plan prior to implementation. See, e.g., Silva v. City of Attleboro, 454 Mass. 165 (2009); Pearson v. Board of Selectmen of Longmeadow, 49 Mass. App. Ct. 119 (2000); see also, Emerson College v. City of Boston, 391 Mass. 415 at 424 (1984) (the nature of a charge must be determined by its operation rather than its description).

4. Conclusion – In conclusion, we find that pursuant to Section 134, the Department must determine whether a municipal aggregation plan is consistent with the requirements of the laws and Department rules and regulations that relate to the procurement of electric supply and energy

It is the municipality’s responsibility to ensure that the day-to-day operations, rates, and fees of municipal aggregation programs comply with the laws of the Commonwealth. See D.P.U. 12-124, at 27-28 (finding that the fees, rates, and operations of a municipal aggregation program are ultimately overseen by municipal officials). Any alleged violation of law by a municipality should be raised in the appropriate forum and at the appropriate time. D.P.U. 14-10 through D.P.U. 14-47 services for aggregated retail customers in competitive markets. Further, we find that the Hearing Officer properly construed the Legislature’s use of the phrase “concerning aggregated services” as referring to the laws and Department rules and regulations that govern aggregations and competitive supply, and not to all laws of the Commonwealth relating to local government.

ABOUT CAPE LIGHT COMPACT

Cape Light Compact is an award-winning energy services organization operated by the 21 towns and two counties on Cape Cod and Martha’s Vineyard. The Compact’s mission is to serve its 200,000 customers through the delivery of proven energy efficiency programs, effective consumer advocacy, competitive electricity supply and green power options. For more information, visit www.capelightcompact.org.

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