What is public power

What is Public Power

Public power utilities are operated by local governments to provide communities with reliable, responsive, not-for-profit electric service.

Public power utilities are directly accountable to the people they serve through local elected or appointed officials. Municipal systems have a diversified power mix, purchasing power on the wholesale market, as well as generating electricity from coal, hydro, wind, landfill gas, and other renewable, natural gas, diesel and distributed resources.

Municipal electric systems are held to public accountability standards. Public records, open meetings, competitive bidding, public budget hearings and prevailing wage laws are just a few of the public accountability standards unique to most municipal electric suppliers.

There are two other types of electric utilities: investor-owned utilities (IOUs) and rural electric cooperatives (co-ops). Most retail electric customers in the nation (68 percent) are served by IOUs, which are private stockholder-owned, for-profit companies. About 13 percent of electric customers are served by electric cooperatives.

Public Power Benefits

Local governments operate public power utilities to provide reliable, responsive electric service to residents and businesses. These utilities are directly accountable to the people they serve through local governing boards.

Municipally owned electric systems offer distinct benefits to their owner-customers, including:

  • Competitive rates
  • Equal or greater reliability
  • Efficient service – lowest cost consistent with reliability, community goals and sound business practices
  • Responsiveness to customer concerns – every citizen is an owner with a direct say in policies
  • Improved local government efficiency and collaboration through sharing of personnel, equipment and supplies
  • Emphasis on long-term community goals
  • Quick response from crews located in the community
  • Not-for-profit status – no split allegiance between customers and stockholders
  • Greater portion of revenues stay in community
  • Local employment
  • Economic development – not-for-profit electricity attracts and keeps businesses
  • Focus on sustainability/environmental stewardship
  • Access to tax-exempt financing for capital projects
  • Opportunity for efficiency through integrated utility operations (e.g., operation with electric, water, sewer, garbage, gas)
  • Local management and operations bring added community leadership for innovation and development
  • Recognized commitment to conservation, safety and the environment
  • Local control over special programs (energy conservation, etc.)
  • Local control over the electric distribution system aesthetics and design
  • Local control that allows matching resources to local needs
  • Primary mission of providing least-cost, reliable service over maximizing profit
  • A competitive standard against which the service of all utilities may be measured