Public Power Pt. 1: Why Take Over? — Episode 163 of Local Energy Rules

The truth is that while over 2,000 U.S. municipalities have a city-owned electric utility, it’s hard to transition from a private to a public utility. Numerous community-led efforts have failed. And yet, new efforts are born every few months perhaps because, even in failure, these efforts often yield positive change.

In this multi-part series, we explore the “public power” issue from several angles. In this first episode, we examine why communities want publicly owned utilities. You’ll hear directly from community and civic leaders in six places that have past or active public power campaigns, from state representatives to city council members to Sierra Club volunteers. In their own words, they describe the problems presented by the incumbent monopoly utility corporation and what the community hopes to achieve in a transition to public power.

In the rest of the series, we’ll explore what makes public power unique, what happens when communities succeed in their pursuit of public power and what happens when they fail (it’s not all bad); finally, we take a clear-eyed look at existing public utilities before turning our attention to alternative models from across the country where communities are advancing clean energy without municipalization.

I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance and this is episode one in our multi-part series, The Promise and Peril of Public-Owned Power. It’s a production of Local Energy Rules, a biweekly podcast sharing powerful stories about local, renewable energy.

As you heard in the introductory quote from Rep. Seth Berry in Maine, changing who owns our electric utilities springs from a desire to meet many intersecting local priorities. When we interviewed Representative Berry for our podcast in October last year about Our Power, an effort in Maine to change utility ownership from private to consumer ownership…, he had much more to say about why a public takeover feels like the right step to meet ambitious renewable energy goals.

In Boulder Colorado, home to a University of Colorado campus and the National Renewable Energy Laboratory, the community has a compelling mix of youthful activism and technical credibility. The citizen-led effort in Boulder is probably the most famous of public power campaigns, as it has lasted more than a decade since the first successful municipal power referendum. When we interviewed Mayor Susan Osborne in the early days of the campaign in 2013, she had this to say about why Boulder went all in on public power.

This last point was an important finding for Ken Regelson, a local Boulder activist and energy expert. He was often involved in the modeling work that showed the potential benefits of Boulder’s public power takeover. During our conversation in early 2014, he explained that the efforts in Boulder were intended to inspire others, as well.

The city of Santa Fe exports 10 million to wall street every year in profits. If that money went back into the city’s budget, it could be used for schools or parks or education or whatever the city decided.

MIDWAY PITCH

The economics [or “opportunity to save money”] has been a major motivation for Pueblo, a community of just over 100,000 in south-central Colorado. City council member Larry Atencio joined me for a Local Energy Rules episode in 2018, and he focused squarely on high electricity costs for his constituents.

It came about when Black Hills took over, they built this new power plant out, a gas fired fire plant outside of the city of Pueblo because they are the only electric provider for the city of Pueblo. So they had to, they literally had to build their own power plant to serve the city. Now, the public utility commission of course gave them permission to recoup all of the cost. And that is what led to the high electricity bills for everyone.

this investor owned utility, this investor owned model of a utility is it’s an extractive model…They are extracting very high profits, very exorbitant profits from our, our already low income community. And we’re paying higher rights rates than the state average or the national average…imagine the good that those revenues could do Pueblo. If they were redistributed amongst our community, through the utility, paying their employees and those employees then spending their money locally, et cetera, imagine the good that that could do our community. If those funds, those revenues were redistributed into our own local economy.

Even communities that pursue options besides municipal power have many of the same motivations as other public power advocates.. In California, as in eight other states (you can see the full list on ILSR’s Community Power Map), cities actually have a lighter lift alternative to municipalization, called community choice energy. Lane Sharman, co-founder and chair of the San Diego Energy District Foundation, joined me in May 2014 (for episode 23 of Local Energy Rules) to explain why he and other advocates wanted this public solution. While San Diego has this municipalization lite opportunity, the rationale for public management sounds a lot like the justification for public power campaigns in Colorado, New Mexico, and Maine.

As in San Diego, advocates in Decorah, Iowa, see public power as an antidote to failures of profit-driven energy monopolies. A town of 7500 in northeastern Iowa, Decorah hosts a small liberal arts college as well as one of the nation’s few energy districts. The focus of Winneshiek Energy District on keeping energy local since 2010 also formed the kernel of its public power campaign, Decorah Power.

Andy Johnson and Joel Zook joined me in April 2018 for a Local Energy Rules episode and Andy wasted no time in explaining why public power was a powerful counter to private monopoly electric utilities.

Overall, our tour of six public power campaigns illustrates a consistent set of interests: renewable energy, affordability, local decision making, public over private interests, nonprofit versus for-profit. Given the attractiveness of public power, why have so few communities flipped the switch from private to public?

In forthcoming episodes, we’ll dive in, exploring the high bar these efforts must clear, the broad benefits of public power, and what communities can achieve even if the end result isn’t what they expected.

On the show page, look for links to the full-length podcast episodes with leaders from each of the six communities we featured, as well as additional ILSR resources on public power and municipal utilities. On the website of the Institute for Local Self-Reliance, you can also find every existing city-owned municipal utility on our Community Power Map.

Our next episode in the public power series, in two weeks, features highlights of the benefits of public power. Ursula Schryver, Vice President of Strategic Member Engagement and Education at the American Public Power Association discusses the lower costs, better reliability, and the benefit of local accountability in city-owned utilities. We also visit with leaders from  several cities with public utilities, two of which already source their electricity from 100% renewable resources.

Local Energy Rules is produced by me and Maria McCoy, with editing and sound production by audio engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear more powerful stories of communities taking on concentrated power to transform the energy system. Until next time, keep your energy local, and thanks for listening.