The Municipal Light Plant: A Wellesley success story

Special to The Swellesley Report from Wellesley resident and former MLP board member Thomas E. Peisch.

As The Swellesley Report noted on Jan. 31, the Wellesley Municipal Light Plant recently welcomed David Wood as its new Director (chief executive). Dave takes over for the retiring Don Newell, who served as Director of the MLP for the past five years and caps a distinguished
career as a public utility executive in Wellesley and elsewhere.

This change in leadership presents an opportunity to reflect on some the accomplishments of this vitally-important Town agency.

First, some background, and then some history. The MLP is one of 41 municipally-owned and -operated electricity vendors in Massachusetts. The MLP is responsible for providing electricity and related services to most Wellesley residents and businesses, who in turn must buy electricity
only from the MLP.

The MLP does not generate electricity, so the word “plant” is something of a misnomer. Rather, the MLP purchases electricity on the open market and sells it at a modest mark-up that is limited by law. Although this business model is straightforward, by no means are the MLP’s operations simple.

In addition to purchasing, storing, and selling power, the MLP must maintain the electric infrastructure in Wellesley and respond to emergencies, climate change-related and otherwise.

Fortunately for the citizens and businesses of Wellesley, the MLP has had a terrific record of performance, thanks to the leadership of Newell and that of Richard Joyce, who directed the MLP from 1995 until his retirement in 2014.

By way of history, for reasons that this writer has been unable to discover, Massachusetts law permits Wellesley and 40 other communities to have their own dedicated electricity provider.

Accordingly, residents of these communities are not beholden for this crucial product to large investor-owned outfits like Eversource and its predecessor, NStar. The MLP was set up in the late 1800’s, and in 1954, its operations were folded into the Wellesley Department of Public Works so that the DPW ran Town’s electricity, water, sewer and road systems.

By the early 1990’s, considerable dissatisfaction with this arrangement had developed among some segments of the Wellesley citizenry. This unrest was rooted in a belief that the MLP was not being run efficiently, and that the Town was missing out on an important source of revenue. A study committee of prominent Wellesley citizens concluded that these concerns were well-placed. After a contentious Town Meeting session in December of 1992 and some post-session jousting, the MLP was spun out of the DPW and given its own governing board, consisting of the three elected DPW Commissioners and two others appointed by the Select Board. [This writer served as a Select Board appointee from 2004-2012.]

One of the first moves made by the new MLP Board was the hiring of Joyce, who had decades of experience in the field, as the MLP’s Director. In addition to his considerable experience, Joyce brought a vision for maximizing the quality of electric service for the ratepayers and the financial return for the MLP’s owners. Both groups of beneficiaries are the citizens of Wellesley.

For the next 24 years, Joyce presided over a transformation of the MLP’s operations and made it the envy of its peers. In 1999, Newell came aboard as one of Joyce’s top assistants and succeeded him after several years as director of another municipal light facility. The successes of the MLP described below are directly attributable to their leadership and, of course, to the hard-working and talented staff they have assembled.

The MLP’s accomplishments since 1992 include the following:

• Racking up an enviable reliability history, both in terms of the number of power interruptions and response times. This is due in no small part to the MLP’s aggressive maintenance and capital improvement programs, which have made the electric delivery system less vulnerable to storms and other mishaps.
• Maintaining electricity rates paid by the MLP’s residential and commercial customers as among the lowest in the state. Wellesley ratepayers pay roughly two-thirds of what ratepayers in some neighboring communities pay.
• Taking advantage of other income-generating opportunities in Wellesley and elsewhere. For example, for the past decade or so, the MLP has provided services to a state agency that is responsible for the conversion of the Ft. Devens complex in Ayer. In addition, the MLP generates revenue in connection with internet service to commercial customers.
• Devising a series of programs to deal with climate change, including rebates for energy efficiency and
  alternative energy programs.
• Providing the Town with an annual cash payment of $1 million. Although this number has not changed since the mid-1990’s, it remains among the highest in the state and is several times the amount paid prior to the MLP’s being spun off. For the arithmetic-challenged such as this writer, the MLP has contributed approximately $30 million dollars to the Town’s coffers since it became an independent entity.

As The Swellesley Report recently noted, new MLP Director David Wood comes to Wellesley with decades of experience in the municipal energy space, and the citizens of Wellesley are fortunate to have him. He has big shoes to fill given the accomplishments of Joyce and Newell and the team they have assembled, but he is up to the task. There are, to be sure, headwinds for Wood to face, including the ongoing challenges of climate change and related increased demand for electricity as an alternative to fossil fuels, volatility in the electricity market, and the challenge of attracting and retaining talented employees. The citizens of Wellesley welcome him and wish him well.

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