Should the public buy Columbia Gas?

Right now, Eversource is proposing to buy the utility for $1.1b

THE RECENTLY PROPOSED $1.1 billion sale of Columbia Gas to Eversource provides an important opportunity to consider how we, the people of Massachusetts, want our public utilities to be governed and structured – and whether to pull them more firmly into the public domain.

Public utilities are entities entrusted to provide critical public services to the public. That trust means that they are supposed to receive heightened regulation by the government while being given the gift of a government-sanctioned monopoly (i.e. if you live in their territory, they are your exclusive provider). This arrangement is meant to serve the public good, and yet in just the past two years, our public utilities failed us in virtually every way imaginable.

We have recently experienced massive lapses in safety, long-term disruptions of service, the lock-out and denial of healthcare benefits to trained workers, and continued refusal to embrace critical values of public health and climate stability in the governance of our utilities. Indeed, these utilities have used ratepayer dollars to fund exorbitant executive packages (Eversource CEO Tom May makes close to $10 million a year to head a company whose customers broadly had the choice of either buying from his company or sitting in the cold and dark in the homes) and lobby against the public interest.

So this sale is coming at a time ripe for consideration of the idea of public ownership of our public gas and electric utilities.

While this public ownership of a long-time private enterprise might seem like a radical idea, it would not be the first time for society to recognize that there are more benefits to the public from collective ownership than private profit maximization.

Indeed, let’s look at the historic example of fire departments, still called “fire companies” in many places. The root of the term “fire company” refers back to a time when fire departments were actually private, for-profit companies. These companies would sell property owners insurance – usually in the form of a metal plaque placed on the front of the building – and would only come and rescue the homes of people who had paid for fire protection in advance, who visibly displayed their ‘insurance’ on the front of their building. Those who had not paid would see their home go up in flames.

By the late 1800s, most folks realized that fires were generally bad for everyone, and fire departments became a publicly-owned responsibility of the government in communities across the United States. Want to guess which city was the first in the nation to create a publicly owned fire department, to lead this public-ownership revolution? That’s right, Boston, Massachusetts, in 1679.

Today, firefighters are some of society’s most trusted and respected public servants, and few if any today would argue that firefighters would work harder or more efficiently if only they had a clearer profit motive. (Though notably, climate-fueled wildfires have seen a return of private firefighters for the uber-rich). The notion that profit is necessary for effective service is just false.

And happily, we do not have to go back to the 1800s or to the realm of fire management to imagine what citizen-controlled energy would look like.

Right now, a full 13 percent of Massachusetts’ energy is controlled democratically by the people through elected municipal light plants, or Municipally Owned Utilities (MOUs). These are democratically-controlled municipal utilities that manage to deliver energy to their town’s residents without cutting corners on safety, blowing up homes, or locking out workers and denying critical healthcare to their families as a negotiating tactic. Indeed, if you don’t live in a town with a municipal light plant, you probably did not even know that they exist.

But the people of Ashburnham, Belmont, Berkley, Boxborough, Boylston, Braintree, Chester, Chicopee, Concord, Danvers, Gosnold, Groton, Groveland, Hingham, Holden, Holyoke, Hudson, Hull, Ipswich, Lakeville, Littleton, Lynnfield, Mansfield, Marblehead, Merrimac, Middleborough, Middleton, North Attleborough, North Reading, Norwood, Paxton, Peabody, Princeton, Raynham, Reading, Rowley, Russell (northern part of the town), Shrewsbury, South Hadley, Sterling, Stow, Taunton, Templeton, Wakefield, Wellesley, West Boylston, Westfield, and Wilmington all are served by a citizen-controlled utility.

Given the suffering and inconvenience experienced by the people of Lawrence, Andover, and North Andover (along with other Columbia Gas customers in Springfield, Brockton, and elsewhere), shouldn’t they be given the opportunity to try things a different way that will empower their communities, and give them more wealth?

After all, Eversource is prepared to purchase Columbia Gas at the price of $1.1 billion, which means that Eversource thinks that there is more than $1.1 billion in profit to be extracted from these communities. Why let those profits flow to Eversource, when they could instead flow to these impacted communities?

There are many questions that would need to be worked out, including what the fair price would be and how to structure public ownership across multiple communities. Given that Massachusetts needs to stop using natural gas in the next one to three decades to honor our climate obligations, it might be a bad deal to absorb Columbia Gas into the public domain and have Massachusetts residents own a dying industry. But given how infrequently public utilities are put up for sale in our fine state, it would be a real shame not to give this idea its due evaluation.

Unfortunately, the head of the entity in charge of approving the sale, the Baker-appointed Department of Public Utilities (DPU), is Matthew Nelson, a former Eversource executive. Given Eversource’s explicit interest in this purchase, it is reasonable to question how much due process and fair consideration of alternatives will be considered.

Hopefully, we can take the DPU at its word, when they promised to WGBH that “the Department of Public Utilities has a statutory process in place to protect ratepayers during the sale of any public utility conducting business in the Commonwealth, and the Department will follow that process in an open and transparent manner.”

We await word of how and when that process will proceed in an open and transparent manner, and when and how opportunities for public input will be considered.

Lawrence Mayor Dan Rivera perhaps summed up the mood of the state when he recently told the Boston Globe that “it will be a great day in the Merrimack Valley and in the Commonwealth when Columbia Gas of Massachusetts no longer exists.”

To the relief of many, Columbia Gas is going away. But the real question before us is: what do we want to replace it with? Another profit-maximizing corporation that views the people of the Commonwealth as customers to wring value out of? Or a government-owned department that, like the fire department, would symbolize the best of public service and protect the safety and fair pay of workers, the health of our communities, and the stability of our climate system?

Meet the Author

Craig Altemose

Executive Director, Better Future Project
I know which one I would choose. How about you?

Craig Altemose is executive director of the Better Future Project.