Norwood appeals electricity ruling to Supreme Court
Norwood is appealing to the U.S. Supreme Court a decision requiring the town to pay $78 million to its former electricity supplier.
In February, a federal appeals court upheld a ruling by the Federal Energy Regulatory Commission that Norwood was liable for a $78 million contract-termination charge assessed by New England Power Co. in 1998, when Norwood began buying its energy at a lower rate from Northeast Utilities.
Robert Jablon, a Washington, D.C., lawyer representing Norwood, said the town’s appeal centers on FERC’s approval of the charge for terminating the contract, which would have run for another 10 years. FERC, according to Jablon, did not determine whether the charge to the town, which included interest at a rate of 18 percent, was “fair and reasonable.”
“At no time was the charge reviewed to see whether it equates to New England Power’s real losses,” Jablon said.
Jablon is representing Norwood on a contingency basis, meaning he will be paid only if the appeal is successful. Norwood, meanwhile, has already begun paying the settlement, including a $15 million payment sent in March. In addition to the $78 million, the town could be responsible for as much as $38 million in interest. In its Feb. 2 ruling, the U.S. Court of Appeals for the First Circuit left it to FERC to determine if Norwood is required to pay the interest as well.
Norwood Town Meeting this month is expected to ask the Legislature for permission to borrow up to $116 million. The money would be recouped through an increase in rates charged by Norwood Light, the municipally owned utility company.
Written by MMA Associate Editor Mitch Evich
