WESTFIELD – The Municipal Light Board reorganized last night following the election of Ray Rivera as the Ward 2 representative and the departure of Bob Paul, who will now serve as the Ward 5 representative on the City Council.
Paul had been the Ward 2 MLB representative, but lost that seat, which he had held for six years, not to an election opponent, but to the fact that the City Council changed the ward line following the federal 2010 census. That redistricting moved Paul out of Ward 2 into Ward 5.
The current Ward 5 MLB representative, Tom Flaherty, was elected to serve as the board president for 2014 by a 5-0 vote. Jane C. Wensley and Kevin Kelleher were absent, Wensley due to the death of her husband earlier this week.
Flaherty requested the board to select a Vice Chairman for the 2014 year and when none of the members present volunteered nominated Kelleher for that post, a nomination which was supported by a 5-0 vote.
The members then discussed subcommittee assignments, making changes to reflect the election of Rivera and the departure of Paul. The MLB maintains four standing subcommittees: Finance, Rates, Human Resources and Technology.
Flaherty said this morning that members have diverse backgrounds which accommodate their appointment to various subcommittees.
“Each member is working hard to know what is going on in the energy markets,” Flaherty said. “We are all also ratepayers. We set policy with the goal to be as competitive as possible
Ed Roman, Flaherty and Robert Sacco will serve on the Finance Subcommittee; Francis Liptak, Wensley, Flaherty and Rivera on the Rates Subcommittee; Kelleher, Flaherty and Wensley on the Human Resources Committee: Sacco, Liptak and Flaherty on the Technology Subcommittee.
Typically all MLB members attend subcommittee meetings, usually held prior to the board meeting, but only the subcommittee members vote on recommendations made from the subcommittee to the full MLB for further action.
Issues often cross over between subcommittees. Last night the board discussed revenue projection for 2013 which, for the first time in 15 years, are projected to below target for the year due to the volatility of the energy markets, an issue for both the Finance and Rate subcommittees. The department operates on a calendar year and has yet to close the books on 2013.
The board does not set rates, but its policy decisions do impact both gas and electric rates set by management, such as the decision to establish stabilization account for both the electric and gas divisions to buffer rates to local residents and businesses when those markets have volatility.
“We used both the gas and electric stabilization accounts during the early part of 2013 to avoid rate impact to local residents and businesses,” Flaherty said.
Much of that price volatility is due to the pipeline bottleneck into the New England region, Flaherty said, and due to the fact that 53 percent of electric power in the region is now generated by gas-powered plants. The dependency on gas-fueled generators directly links electric rates to the cost of natural gas.
“Just 12 years ago gas generators produced eight to 10 percent of electricity in the region – that is now at 53 percent,” Flaherty said.
The pipeline constraints also are a major driver in the cost of both electric and gas energy regionally.
“On Jan. 7 the cash market was $3.46 per therm of natural gas in the Westfield area, but just down the turnpike in Albany it was 47 cents per therm,” Flaherty said. “The gas market price is seven to 10 times higher in Massachusetts than in New York state.”
The department contracts every year for natural gas, put during peak demand periods, which are weather-related, has to augment its contracted supply at the much higher market price.
“You can’t plan for the weather when the cost goes up three to five dollars per therm,” Flaherty said.
