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Saying "No" to Municipalization
On November 7, 1995, voters in Aberdeen, NJ, went to the polls to elect local and state officials. Also on the ballot were public questions (em including one asking Aberdeen residents whether the township should build or acquire electric transmission and distribution facilities. Eighty-six percent of the voters nixed the idea. What follows is a case study of how the issue got on the ballot and how the local utility defeated the effort. The story reveals what it takes to defeat a municipalization drive: support from municipal government, the public, and your union. Such a drive also requires a cohesive, grassroots message.
Aberdeen, NJ, is a bedroom community of about 17,000. Many residents commute to New York City, 25 miles away; few work in town. In fact, it was Anchor Glass Container, Aberdeen's single manufacturing business, that initiated the municipalization effort.
Only 10 to 15 percent of
Anchor's workers live in the township. Anchor uses about 40 percent of the township's electric demand and pays about a third of the $12 million the township pays in annual electric costs. Jersey Central Power & Light Co. (JCP&L), an investor-owned utility serving nearly a million customers in northern and central New Jersey, has been the town's provider for 75 years. The Aberdeen Township Council, the local governing body, consists of six at-large members plus an elected mayor. Four of these seven council seats were on the ballot in the referendum vote; three incumbents were running for reelection.
In spring of 1995, Anchor sent a letter to JCP&L defining the terms under which it would continue as a JCP&L customer. Anchor uses 7,000 kilowatt-hours of electricity to run its glass bottle manufacturing business. The key provision was a 50-percent cut in electric costs. JCP&L offered Anchor a five-year, 25-percent annual reduction (em a savings of $1 million each year. JCP&L also attached conditions to the offer, requiring Anchor to remain a customer for five years and to drop the municipalization initiative. In a second deal, JCP&L offered a $1.7-million annual rate cut that included possible service adjustments, such as those for interruptible power.
Anchor rejected both offers.
In the meantime, Anchor had developed working relationships with Council members as well as the town manager and his assistant. In July 1995, JCP&L learned of Anchor's efforts to encourage Council members to municipalize the town's electric system. At that point, the Council moved quickly to place the issue on the ballot.
The township was undoubtedly eager to appease Anchor be-cause the company is its largest taxpayer, paying more than $660,000 into the Aberdeen coffers every year. In addition, Anchor implied that its economic viability was at stake. Anchor promised that a municipalized electric system would save more the town and its residents over $4 million, including $2 million for the company. We later found this promise drastically overstated.
Prior to the referendum, Anchor agreed to pay a township-hired consultant to do an economic feasibility study. Although JCP&L proposed to jointly fund the study, the township chose Courtney & Associates, a consultancy known as a strong