Energy Biz - September/October 2008 - (Page 55) Public power entities from small hamlets to large metropolitan systems are confronting an array of complex challenges that promise to redefine their business in coming years. More generation is needed. Strategies must be developed to deal with whatever carbon emissions regime the federal government may devise. There is the promise of the smart grid. And there is the threat of a dwindling workforce as many workers face retirement. To better assess the challenges to public power today, EnergyBiz recently sat down with six senior executives of public power utilities at the annual meeting of the American Public Power Association, which has 2,000 members serving 45 million customers. Most are members of APPA’s board, and the group included the current chairman of the organization, Maude Grantham-Richards, and chairman-elect, Marc Gerken. Their wide-ranging comments, edited for style and length, follow. l eadershiP roundtabl es What are the most pressing challenges facing the power sector? carTEr I am the president and CEO of Santee Cooper, the South Carolina Public Service Authority. We are an electric generating company that’s fully integrated. About half of our business is wholesale. We have pretty much every type of generation except for wind, which we hope to have soon. But we’re predominantly a coal-based utility. We see the world changing in the way that it acquires and uses energy. Coal prices doubled within a 12-month period of time. The way that consumers consume energy is changing. We hope to change that some more so that they’ll do it more efficiently. huVaL I’m from Lafayette, La., the fastest-growing large city in the state with about 120,000 people. We own our own generation. About two-thirds of our generated power comes from coal and the rest from natural gas. As the price of natural gas is going up our investment in coal has become a much greater asset to us. gErkEn I’m president and CEO of American Municipal Power of Ohio in Columbus, Ohio, which deals with 122 municipal electric systems in Ohio, Pennsylvania, West Virginia, Virginia, Michigan and Kentucky. We need to own our assets and diversify in different types of assets. We are currently involved in the Prairie State coal plant, a planned mine-mouth, 1,600-megawatt plant in Lively Grove, Ill. We currently have a permit to build our own 1,000-megawatt coal plant on the Ohio River in Ohio. And we’re constructing 190-megawatts of hydroelectric generation. We’re on the market to buy 65 percent of our baseload needs. We are hoping to bring that EnErgyBiz down to 12 percent by 2013. Our big concern is climate change. A lot of folks think that you don’t need coal and you don’t need nuclear and you can keep the lights on. I’m not so sure that you can accomplish that. gr anThaM-richarDs I’m the electric utility director for the Farmington Electric Utility System in Farmington, N.M., a vertically integrated utility that serves about 45,000 customers. We are on the market for about 20 percent of our power supply. Our peak is 220 megawatts. T wiT T y I’m the general manager of City Utilities in Springfield, Mo., serving a population of about 250,000 people. We generate most of the electricity we distribute ourselves. We have about 800 megawatts of installed capacity and we’re building a new 300-megawatt coal unit next to one of our existing units. Energy prices are rising rapidly and they’re not going to return to normal. I don’t think electricity is going to be generated and distributed for 5 cents a kilowatt-hour any longer, and that’s a real shift for our customers to understand. TiLTOn I’m chief executive officer of ElectriCities of North Carolina. We’re about 2,500 megawatts of load. We have ownership interests in five nuclear units and two coal-fired units. Public power is in a challenge-rich environment. Our biggest challenge is that we lack a long-term federal energy policy that is based on science and economics and produces an acceptable environmental result. If we had that we would be able to make reasonable, rational decisions for new generating plants that might have a life of 30 or 50 years and might take 10 years to construct. Without that, we are in an extremely difficult position when it comes to investing in generating plants. www.energycentral.com E n E rgyB i z 55 http://www.energycentral.com
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