CEO’s Report: Do you know the value of your electric utility?

Not every community is so lucky as to own and operate their electric system and be a public power community.

Over 2,000 municipalities in the country are fortunate the leaders before them had the foresight to invest in the enduring success of their communities.

Public power utilities emphasize long-term community goals and can direct utility resources accordingly, by implementing programs and timetables to achieve those goals. 

Without local utility ownership, the community is disenfranchised, with no input on these decisions.

Moreover, homes powered by public power utilities paid 9% less than homes powered by private utilities in 2022.

A municipal electric utility is a community-owned asset. It provides reliable service, low rates and supplemental revenue for other departments.

Know your value

The greatest value a public power utility provides is that it is community-owned, giving it local control.

There are no shareholders. The utility is owned by the citizens it serves and run as a division of local government.

Public power is unique in that the utility is fully accountable to their customers. Their purpose is to serve the community.

This local control affords public power communities five distinct advantages.

Accountability and transparency in governance

• Citizens participate in the governance of the utility at the ballot box and through city council meetings.
• Utility business is conducted in the open, subject to open meetings, public records laws and local scrutiny.
• Customers know how and why decisions are made – they have access to public records including cost estimates and planning documents.
• Citizens can discuss concerns with local employees or council members.

Financial support for local government

• Public power utilities provide a direct benefit to their communities in the form of payments and contributions.
• Many utilities make in-kind contributions to the city in the form of free or reduced-cost services such as street lighting and electricity usage at city facilities including pools, parks and municipal offices.
• Public power utilities paid a median of 5.1% of electric operating revenues back into the community in 2022.
• Public power’s contributions, when all taxes, tax equivalents, and other contributions are considered, was 9% higher than what private utilities paid in 2022, as a percentage of electric operating revenues.

More efficient municipal operations

• Public power utilities keep costs down through local scrutiny of operations.
• Strategic partnerships and joint action, such as with Heartland Energy, provides advantages while maintaining independence.
• Oversight of the utility is local which keeps the utility focused on reliability, price and service.

The ability to tailor utility policies, programs and practices to serve the priorities of the local community

• The community controls the utility’s priorities.
• Decisions are made at the local level and reflect the values and choices of the community. There is no one size fits all approach.
• Community members are invited to be part of the decision-making process through open meetings laws.

Value of ownership

• Public power utilities are owned by the citizens they serve.
• Ownership means local management and control over decisions involving investments, operations, maintenance, power supply and customer programs.
• Ownership provides options such as asset leverage, equity borrowing, ratemaking authority and control over future streams of income.
• Infrastructure projects are typically funded through the issuance of tax-exempt municipal bonds, a cost-effective way to keep the utility running smoothly.

Celebrate your value

As we approach Public Power Week in October, I encourage you to take a deep dive into your electric utility.

What are both the tangible and intangible benefits it provides your community?

What would your community look like without the local utility?

It is important to have this information available should questions ever arise as to the value it is providing.

As we all know, ownership provides numerous benefits. Would you rather own your home or rent? Why pay money to someone else every month, when you could be investing in your own property?

The same principle applies to your locally owned, locally controlled municipal electric system.

Be on the lookout for resources to help promote the value of public power as we celebrate Public Power Week October 5-11.