Customer/Community Focus
The primary difference between municipal utilities and private, investor-owned utilities (IOUs) is that municipal utilities use all customer payments to provide low-cost electric service or meet other community needs. Private utilities are in business to earn a profit for their stockholders, as well as to deliver electricity, which means that customer payments are used in part to pay stockholders all over the country.
Massachusetts municipal utilities vary greatly in size and other important characteristics. There are several that serve more than 20,000 customers. The smallest ones serve less than 1,000 customers. Some of them serve customers in more than one city or town. In fact, the 40 Massachusetts municipal utilities serve approximately 380,000 customers in all or parts of 48 cities and towns with a total population of about 850,000. Together, municipal utilities deliver about 13 percent of the electricity used in Massachusetts.
The communities served by municipal utilities include residential communities, commercial and industrial centers, farmlands, rural areas and resort communities. They are located throughout the state, stretching from the town of Chester in the west to the town of Merrimac in the northeast corner of Massachusetts. Municipal utilities typically are characterized by lower electric rates and superior service, with each utility structured and operated in accordance with the needs of the community it serves.

Developing Their Rights
For many years, Massachusetts municipal utilities purchased most of their electricity through retail contracts with IOUs. It was too expensive for individual municipal utilities to build power plants capable of meeting all their needs. As a result, they purchased power from the larger private utilities, and the primary job of the municipals was delivering their purchased power to the homes and businesses they served.
This long-established relationship began to change in the 1960s, when the Shrewsbury municipal utility initiated litigation that resulted in a federal court decision establishing municipal systems as utilities in their own right, entitled to purchase power directly from wholesale suppliers. Around the same time, New England’s electric utility industry was evolving, with the IOUs planning to create the New England Power Pool (NEPOOL), which would coordinate the production and delivery of electricity throughout the region. Eventually, after more litigation, the municipal utilities asserted their rights to participate in NEPOOL and develop their own power supply.
In 1969, with the workload of developing an independent public power supply expanding, the municipal utilities decided to create MMWEC, which started out as a private company managed by a public trust. In 1973, municipal utilities became full members of NEPOOL and acquired legislative authority to issue tax-exempt bonds, individually, to purchase shared in NEPOOL power plants. MMWEC coordinated the power supply planning and acquisition activities of the municipals. At the time, the law required each utility to obtain approval for and carry out individual bond issues, a process resulting in duplicated efforts and costly delays.

MMWEC Legislation
This changed through the enactment of Chapter 775 of the Acts of 1975 in December 1975. Under this law, in May 1976, MMWEC became a pubic corporation with the authority to issue tax-exempt revenue bonds to finance electric power projects on behalf of its members. Then-Gov. Michael S. Dukakis called the new law “a significant victory for public power.” Indeed, it was one of the most important events in the history of public power in Massachusetts.
MMWEC has issued more than $1 billion in bonds to finance the foundation of an independent power supply for Massachusetts municipal utilities. The MMWEC organization continues to deliver a variety of power supply, financial and other services that help municipal utilities maintain their competitive positions in the region’s electric utility industry.
For more information on public power, explore the website of the American Public Power Association.