What Public Power Is and Why It Matters

Those of you who get your bill every month from a big corporate utility owned by shareholders (an Investor-Owned Utility, or IOU) might not realize that there’s another way to do it. There’s a whole other world of utilities out there, sometimes called public power, made up of municipal utilities (“munis”) run by city governments and rural electric cooperatives (“RECs”) run by consumer members. Far from being the next socialist plot to take over America, public power is a bedrock public service that supplies power to nearly 30% of American electric customers.

According to the Energy Information Administration:

There are 210 investor-owned electric utilities, 2,009 publicly-owned electric utilities, 883 consumer-owned rural electric cooperatives, and 9 Federal electric utilities. A small amount of electricity is sold by generating facilities directly to end use customers. At least 6 States regulate cooperatives, and at least 7 States regulate municipal electric utilities; many State legislatures, however, defer this control to local municipal officials or cooperative members.

Municipal utilities can be truly miniscule operations. Plains Justice’s Clean Energy Ambassador outreach is about to launch a series of webinars to serve munis and RECs, which recently led us on a wild effort to call every single muni and REC in a 6 state area (Iowa, Nebraska, North Dakota, Montana, South Dakota and Wyoming, for anyone who’s keeping score at home).

Hundreds of calls and interesting conversations later, we know that a muni can be run by a small town mayor who’s also responsible for facilities and possibly another full-time job. One utility manager might be responsible for several tiny munis, or an REC manager might have customers spread across many counties or even more than one time zone. The designated utility supervisor may have years of experience or know little about running an electric utility. The managers are responsible to a board of directors or a city council who are concerned first, last and always with the economics and reliability of the utility. Programs that a large IOU might experiment with can appear to be too big a risk to a small muni. On the other hand, if small town residents or REC members make up their minds to try something new, they can just do it, without waiting for regulatory or shareholder approval. Public power has the potential to be far more innovative than IOUs ever could be.

The managers and the council or board are also extremely sensitive to customer complaints. Every year, members of the board or the council are up for re-election. You don’t see that kind of responsiveness at the big IOUs. On the other hand, because they lack staff capacity to experiment with new ideas and are extremely cost-sensitive, munis and RECs change the same way an ocean liner makes a turn: with great deliberation and extremely slowly. When this is done right – in response to changing market conditions, evolving social needs, and with sensitivity to customer impacts – it can be very successful.

This is the change Clean Energy Ambassadors is working to facilitate. Our webinar series, for example, brings experienced public power professionals online once a month to make presentations on topics requested by members of the network. The first topic is “Low Cost/No Cost Energy Savers” presented by experts from the City of Boulder (CO) and City of Springfield (IL) munis. Where munis and RECs need the certainty of seeing how a program has worked for a peer utility, Clean Energy Ambassadors creates a forum to share successes and lessons and ask important questions.

In many ways the public power world is a small town where personal credibility and relationships still matter. Those are the ties we’re building on. Join us for the first webinar next Tuesday, November 16, to see how it goes.

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One Response to What Public Power Is and Why It Matters

  1. Pingback: Tweets that mention What Public Power Is and Why It Matters | Plains Justice Today -- Topsy.com

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