In my long career in electric utility regulation, I have participated in the formation of six different public power utilities. Public ownership of electric utilities, difficult at first, pays huge benefits to consumers within a few years.
The first I worked on was the Emerald People’s Utility District in Oregon. EPUD was approved by voters in 1978 and began providing electricity service in 1983. I attended the “switchover” when the district took active control of providing power. It now serves 22,000 customers at an average retail price of less than 10 cents per kWh, and the reliability is much better than it had been under a private utility.
In 1992, as a consultant for the Hawaii Consumer Advocate, the island of Kauai was served by a private utility, Kauai Electric. Kauai had the highest rates of the major islands of Hawaii. In 2002, the Kauai Island Electric Cooperative was formed. Today, KIUC has lower rates than the private utilities on the other islands, and has achieved that in part by increased reliance on renewable energy, which makes up 60% of its energy portfolio.
Eleven years ago, around the time I was a local utility commissioner in Olympia, Washington, the Jefferson Public Utility District expanded its service from water-only to electricity in a rural county with difficult operating conditions. The early years for Jefferson PUD were difficult, but they persisted. Today they provide cleaner energy – over 85% renewable – and have more reliable service at lower prices than the private utility they replaced.
In each of these cases, the incoming public power utility offered jobs to all of the workers providing service in the communities, generally replacing only the top management. The changeover was simple, and customers did not lose power for an instant. The customers just (gradually) started getting lower bills than neighbors still served by private power companies.
Public power communities across the nation share resources. When there is an outage in Burbank, California, workers from Glendale, a neighboring community, are ready to help. When KIUC was formed in Kauai, it “borrowed” an experienced management team from mainland U.S. utilities to help get things started. They work together.
Perhaps the best comparison to Maine is Nebraska, the only 100% public power state in the U.S. Nebraska has a population of 1.9 million, versus Maine’s 1.4 million. Much of Nebraska is rural, with lots of power lines serving only a few customers. The Nebraska Public Power District provides retail service in parts of the state, and wholesale service to city and cooperative utilities across the state. The average electricity price in Nebraska is about half the average rate in Maine.
I’ve also worked extensively with municipal utilities in California. The news is full of coverage of the very high rates and service reliability problems of the three big private utilities in California. You don’t hear much about the public power utilities serving Sacramento, Burbank, Anaheim or Riverside, who quietly move along providing reliable service at prices lower than the big private utilities, with some of the highest reliability in the nation.
Why do public power utilities have lower prices? There are many reasons. First and foremost, they are nonprofit. That saves about 10%, money that stays with consumers rather than going to shareholders. Second, because they are nonprofit, they do not have profits and do not pay federal income tax. That saves about 3%. They can borrow money at lower interest rates than private power companies. But most important, their only mission is to provide quality service at reasonable cost. Their only “bosses” are the voters, the same people who pay the electricity bills.
The people of Maine should be courageous, not frightened, of taking their electricity future into their own hands. Nobody will work harder for a community than the people who live in it.
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