Dave Kavanagh, senior vice president of regulatory market affairs at Energy New England and executive director for EN Transmission, delivered a compelling presentation on the challenges faced by municipal light plants due to rising transmission costs. He highlighted that the RNS rates have increased from $75.25 per kilowatt in 2012 to a projected $185.28 per kilowatt in 2024. This rise is attributed to necessary upgrades to aging infrastructure, accounting for 70% of the annual transmission bill, which exceeds a billion dollars each year. Kavanagh noted the dominance of incumbent transmission developers such as Eversource, which recently secured a $49 million contract for Boston upgrades, limiting opportunities for public power entities to engage in regional transmission projects.

The meeting further delved into the open access transmission tariff and the federally approved rate of return for regional transmission projects, currently set at 11.07%. Participants discussed the financial implications of these projects, particularly concerning cash flow and expected returns on investments. A common project financing structure includes a 60-40 debt-equity ratio, where only the equity portion is eligible for the 11% return. The board recognized the potential need for bond issuance to finance project costs, necessitating approval from town meetings and further financial planning to handle cash calls from ongoing projects.

A significant part of the discussion centered around the potential formation of a consortium to fund large-scale projects, given that public power alone could not sustain such endeavors. The consortium would involve multiple entities sharing capital contributions and investment returns. A newly appointed board member requested more information about the consortium, seeking a disclosure statement or prospectus to better understand the complexities involved.

As part of the ongoing efforts to manage costs, the board explored opportunities to participate in regional transmission projects. By doing so, municipal light plants could potentially receive returns to reinvest in their revenue structures, mitigating financial pressures from rising transmission rates. However, the eligibility criteria for participating in these projects require a qualified transmission project sponsor (Q-tip), and while certain members within the entity are qualified, the entity itself cannot directly bid.

The board also reviewed the capital budget for 2026, including a cost of service study budget increase of $50,000 to evaluate operational costs and service efficiency. The budget adjustments aimed to address discrepancies in net plant figures, which were corrected, adjusting the return on investment figures downward from 10% to 8.84%. The board anticipated a 13.5% increase in health premiums.

A significant project under discussion was the Advanced Metering Infrastructure (AMI) and the Meter Data Management (MDM) system. The AMI project, which involves transitioning to a new metering technology, is important for improving billing and data management. Although 500 AM meters are ready for installation, deployment is contingent on the MDM system’s capability to bill customers accurately. The second phase of the MDM project, integrating new meter types, had just been completed, but issues with missing meter reads persisted, preventing the MDM from receiving complete data.

Efforts to address operational inefficiencies were also discussed, with a focus on integrating new solutions to alleviate manual labor and enhance system coherence. The board recognized the urgency of rolling out the new AMI meters and the necessity of a new Enterprise Resource Planning (ERP) system to reduce inefficiencies within the existing operational framework.