HOW MIGHT INDEPENDENCE DAY COME FOR PUEBLO?
Op-Ed by Steve Andrews and Susan Perkins
Pop quiz: name one thing that Colorado Springs, Fort Collins, Longmont, Loveland and Gunnison have in common.
Give up? Each of those communities gets all their electricity from municipally-owned utilities (known as munis). Also called “public power,” a muni is a not-for-profit operation owned by the community it serves.
From mountain towns and western slope cities like Aspen, Glenwood Springs and Delta to plains communities Fort Morgan, Julesburg, Burlington, Wray, Yuma and Springfield, over two dozen communities in Colorado are served by municipal electric utilities. Those munis serve about 17% of the state’s population, according to the Colorado Association of Municipal Utilities (CAMU).
Since Pueblo’s Electric Utility Commission is currently studying the options for leaving Black Hills Energy, it behooves Puebloans to take a close look at the world of public power.
Nationwide, the American Public Power Association reports that over 2000 munis serve 45 million people or about 15% of the nation’s electricity customers. A number of very large cities—including Seattle, Orlando, San Antonio, Los Angeles and Sacramento—get their power from munis.
On two fronts—lower energy bills and higher reliability—munis are the clearcut winners, both nationally and locally. Nationwide, energy bills for muni customers average 13% lower than investor-owned utilities (IOUs). Outage time, the best measure of reliability, is roughly an hour per year per customer for munis compared to about two hours for IOUs, according to the U.S. Energy Information Administration.
Here in Colorado, munis charge rates that average roughly 10% lower than IOUs. Most muni customers pay bills that are considerably lower than those we pay IOU Black Hills Energy.
Very few of the state’s munis own power generating plants. Instead, they either buy their power through long-term contracts with power authorities or from wholesaler suppliers on the open market.
Our grass-roots group, Pueblo’s Energy Future, stresses that the key step moving forward is for Pueblo to gain local control of its own electricity operations. Once local control is attained, the public power associations report that there are three key benefits that munis provide to their communities:
Accountability: All munis are 100% accountable to the communities they serve. There would be no demands by South-Dakota-based managers and out-of-state shareholders to be met. There would no regulatory oversight provided by the Colorado Public Utilities Commission up in Denver. With a muni, it’s your utility; the buck stops here.
While the structure of governance varies from muni to muni, typically, a set of locally elected or appointed citizens act as the board of directors for their service area. Aided by professional staff, the board makes policy and operational decisions that are in the best interests of their utilities and communities.
With a muni, the maintenance and repair crews are dedicated to a smaller service area than that of an IOU like Black Hills Energy. While there would be fewer crews serving just Pueblo vs. all of Black Hills’ service territory, they would know the system well and could focus on solving local problems, not being torn between problems in outlying areas vs. more local ones. This all contributes to the stronger reliability.
Accessibility: Every function of the utility is handled locally. There are no remote call centers. If you have a problem with your bill, go to the local office. Their job is to serve you. If you want broader changes to your utility, attend their monthly meeting and propose them. Win or lose, your voice will be heard.
Affordability. With each muni, the local utility board sets billing rates. Those rates cover costs and expenses of providing service.
Making a profit is not required. Rates that customers pay are not jacked up to cover distributions to shareholders, don’t over-pay for high-priced management or shiny new corporate headquarters in South Dakota. No money goes to the feds for corporate taxes. There is no gold-plating of everyday expenses.
Further, because each muni’s service territory is usually constrained to city limits, that means it has more customers per pole and per mile of electric wire, thereby lowering service costs compared to IOUs.
CAMU’s executive director Dan Hodges will present information about these and other features of Colorado’s municipal electric utilities at a town hall meeting on June 26 at the Rawlings Public Library (4th Floor, Ryals Room, 100 E. Abriendo St; 5:30 p.m. – 7:00 p.m.), sponsored by Pueblo’s Energy Future.
Consider attending to learn how a muni might work for Pueblo. It could well be a good fit, a practical route to Pueblo’s independence from Black Hills Energy. Steve Andrews is a retired energy consultant. Susan Perkins Susan@PerkinsEnergyLaw.com is a lawyer in the energy sector. Both are members of the network, Pueblo’s Energy Future.