Politics & Government

More Information on the Proposed RMLD Rate Increase

Reading Municipal Light Department General Manager Coleen O'Brien released the following statement about the proposed rate increase that the RMLD Board of Commissioners will vote on in January. 

"RMLD is seeking an approximate 5% increase to the overall bill. This increase equates to 9% of the customer and base energy charges on the residential bill, and the customer, base energy and demand charges on the commercial/industrial bill.

"The kWhr sales projections over the last several years assumed unrealistic load growth assumptions, which were not adjusted for the FY 2014 budget. These assumptions supported increased base revenues to cover expenses, including the four town payments, and the annual Reading payment in-lieu-of tax (PILOT) which was approximately $2.3 million.   

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"Massachusetts General Law, Section 58, does not allow RMLD to have rates that are below production costs. Pursuant to Department of Public Utilities, 85-121, RMLD’s voluntary PILOT to the Town of Reading must come from net income.  A net loss adversely impacts RMLD’s ability to make its payment commitments and increases RMLD’s credit risk in qualifying for low cost contracts with power suppliers.  

"RMLD was in a transition phase during the FY 2014 budget process with an Interim General Manager performing two critical job functions and the RMLD continuing its search for a General Manager. The necessity of the rate increase is a result of a recent diligent review of the budget to actual financials. It is with fiduciary duty that this issue must be addressed proactively; delays only compound the revenue issue to ensure solid financial positioning by the end of the fiscal year.

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"RMLD has not had a rate increase or an updated Cost of Service Study in over three and a half years. RMLD is developing a long term Strategic Plan which focuses on reliability, rates, staffing and process efficiencies. An RMLD Cost of Service Study model is currently being developed and its resultant study findings and six year projections will be completed and presented this spring.

"Moving forward, the economy combined with the forecasted energy hikes due to transmission and capacity over the next couple of years, will keep electric bill topics in the press for both the municipals and investor-owned utilities alike.  RMLD is a not-for-profit municipal and will, with due diligence, remain with rates amongst the lowest in the state.

"Presentations to the RMLD Board of Commissioners and the Citizens Advisory Board are scheduled for January."


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