Wilmington Selectmen Voice Concern Over Looming RMLD Rate Hikes

Wilmington selectmen voiced concerns over upcoming electric rate increases at their Monday meeting, citing issues with the timing of the hikes as well as discussing possible alternatives. 

Reading Municipal Light Department General Manager Coleen O'Brien explained RMLD is seeking a 9 percent increase to the customer and base energy portion of residential bills, an approximate 5 percent increase to the overall bill.

"If it was implemented now, by the time it goes through, we're looking at a February implementation date," O'Brien said. "A 5 percent increase is about $3 per month for a residential customer."

The reason for the increase is due to stagnant sales growth and rising gas prices, which is the energy source for RMLD’s generators.

RMLD could be in the red by the end of the fiscal year if the utility company's Board of Commissioners doesn’t find a way to bridge the gap.

Town Manager Jeffrey Hull and several members of the Board of Selectmen voiced concern over the timing of the rate hikes, as they would come in the middle of the town's budget process. 

"It was a surprise to me to be looking at an increase of this magnitude with the expectation it would be happening as quickly as it's being proposed," Hull said. 

The last RMLD rate increase was made in 2010.

Hull asked O'Brien if RMLD had considered looking at an annual payment of $2.3 million the utility company pays to the town of Reading to address the budget shortfall, instead of raising rates. 

"Before looking at increases look at the $2.3 million, either a portion of it or all of it, to offset the increases," Hull said. 

Reading receives this payment on top of an annual $1.4 million in lieu of tax payment RMLD makes to the communities it serves, portioned based on the number of customers served in each community.

Wilmington accounts for approximately 60 percent of the RMLD operating revenue. 

Selectman Michael Newhouse asked O'Brien if the hikes were inevitable, or if she would consider alternatives such as looking at the $2.3 million payment made to Reading.

O'Brien said she would recommend enacting the rate hikes to the RMLD Board of Commissioners.

"The bottom line to me is pretty clear--the people we serve, the businesses we serve, are responsible for something like 65 percent of the operating revenue you have," Newhouse said. "If you end up in a shortfall, really when it comes down to brass tacks, were it not for the extra kiss Reading is getting, we're not having this conversation."

O'Brien said she had received similar feedback from selectmen in RMLD's other communities, but that delaying rate increases could result in larger increases in the future and have adverse credit implications for RMLD.

"It's not that I'm not listening to everyone's comments, I'm just saying for the sake of us all, RMLD including all of its customers, I would go forward with the recommendation so we end up with a positive net income to maintain positive financial stability for everyone's sake."

O'Brien noted NStar and other power providers are planning a rate hike of 30 percent or more in January, and even with RMLD's requested 5 percent rate increases, the cost of their service will remain far lower than that of other providers. 

The RMLD Citizens Advisory Board will meet on Jan. 23 to make a recommendation regarding the rate hikes to the Board of Commissioners, who will meet on Jan. 29 to make the final vote on the hikes.