Public Power in Wisconsin The “municipal electric utility” business model

10/15/2014
Manitowoc Public Utilities
Public Power in Wisconsin
The “municipal electric utility” business
model
Nilaksh Kothari, P.E., General Manager
Manitowoc Public Utilities, WI
Public Power Origins
Manitowoc Public Utilities
• In the late 1890’s and early
1900’s, investor-owned
utilities (for-profit) were
busy stringing wires and
lighting cities
• Rural Wisconsin (and
America) was not going to
produce the necessary
profits for energy
companies to succeed in
these areas
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Public Power Origins
•
Local government leaders
recognized the tremendous
economic development benefits of
electricity and were not content to
“wait” until it was brought to them
•
Wisconsin’s first community-owned
electric utility was started in New
Richmond in 1890
– 20 more formed by 1900
– 28 more by 1910
– 17 more by 1920
Status of Public Power in Wisconsin
Manitowoc Public Utilities
Manitowoc Public Utilities
• There are 82 municipal electric
utilities in Wisconsin.
• Collectively:
– $717 million annual revenues.
– Distribute 11 percent of electricity
in Wisconsin.
– Serve 281,000 customers.
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Demographics of Public Power in Wisconsin
Manitowoc Public Utilities
• Average public power community
has about 5,700 residents.
• Customer base is a mix of
residential, commercial and
industrial. A small minority serve
farms. Heavier industrial load in
general.
• Several communities have
generation capability (base load,
peakers, back up, renewable).
Public Power Business Model
Manitowoc Public Utilities
• Public Power Utilities in
Wisconsin are owned by the
municipal corporation and
governed by either a
“commission” or a
“committee”.
• Retail services and rates
regulated by the Public
Service Commission of
Wisconsin.
• Wholesale transactions (i.e.,
power contracts) regulated
by the Federal Energy
Regulatory Commission.
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Municipal Joint Action Agencies
Manitowoc Public Utilities
• “Municipal Electric Companies” in WI (66.0825(4), Wis.
Stats.).
– “… a public corporation created by contract between two
or more municipalities …”
• Three in WI:
– WPPI Energy
– Great Lake Utilities (GLU)
– Western Wisconsin Municipal Power Group/Upper
Midwest Municipal Power Agency (UMPA)
• Becoming the norm nationally.
Public Power around the country
Manitowoc Public Utilities
• There are more than 2,000 public power
systems in the U.S. (American Public Power
Association).
• The largest community-owned electric systems
include communities such as Seattle, Los
Angeles, Sacramento, Austin, Orlando, Long
Island, Nashville and Memphis.
• The entire state of Nebraska is considered
“Public Power”.
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Benefits of Public Power for its Wisconsin
customers
Manitowoc Public Utilities
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Local control, local decisions
Competitive electric rates (probably lower)
More reliable system
Local employment
Faster response time to outages
“Payment-in-lieu-of-tax” to the 82 Wisconsin
public power communities totaled more than
$19.2 million in 2011.
• Not for profit
Current Challenges for Public Power
Manitowoc Public Utilities
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Slow down in sales growth
Planning forward with uncertainties
Reliability
Environmental regulations
Workforce issues (succession
planning; public employee retention)
• Tight municipal budgets
• Cyber and physical security
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Manitowoc Public Utilities
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Manitowoc Public Utilities
Formed in 1914
18,000 Electric Meters
17,500 Water Meters
$70 Million in Annual Revenues
City of Manitowoc - Electric Service Territory
Largest municipal utility in WI
Ownership in American Transmission Company
Only base-load generating municipal utility in WI
Manitowoc Public Utilities
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Key Projects
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Manitowoc Public Utilities
Pilot Advanced Metering Infrastructure
Replace SCADA
Financial System replacement
New Phone System
Replacement of IT Infrastructure
• Investment in Infrastructure
Manitowoc Public Utilities
Thank you!
Questions?
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