POWER July 2015 - 6

SPEAKING OF POWER
Public Power and IOUs:
The Same Yet Different
W
hat separates investor-owned
utilities (IOUs) and public power
companies these days? Less than
you might imagine.
In early June, while the Edison Electric
Institute (EEI), the trade association for
IOUs, was holding its annual meeting in
New Orleans, I was in Minneapolis at the
annual conference of the American Public
Power Association (APPA), which represents
public power-municipal and stateowned
utilities. I attended the EEI event
last year, and this year I wanted to hear
how municipal utilities (munis) and their
brethren are seeing the world as the APPA
celebrates its 75th anniversary.
The Numbers
You probably know that the primary difference
between IOUs and munis (and cooperatives,
which have their own industry
group, the National Rural Electric Cooperative
Association) is ownership structure:
Public power and co-op utilities are community-
or member-owned not-for-profit
entities. (There are also regulatory, governance,
and legal differences that are too
detailed to go into here.)
To understand public power-essentially,
locally controlled utilities-it helps to understand
the numbers. Public entities supply
power to roughly 14% of U.S. customers.
New Generating
Company Advisory Team
Members
POWER's Generating Company Advisory
Team members serve two years, and our
first three members (whose affiliations
you can find on p. 4) are leaving the roster
after this issue, having shared valuable
insights with us: Melanie Green,
Randy Livingston, and Sharon Pfeuffer.
With this issue we welcome three new
members, including one from a public
power company: Pat McCarty, Generation
Manager, Tacoma Power; Mark C.
McCullough, Executive Vice President,
Generation, American Electric Power;
and Sarah P. Orban Salati, Managing Director,
New Energy Solutions, AES.
6
Though the percentage of customers is small,
there are far more publicly owned utilities in
the 50 states (2,009) than IOUs (192) and
co-ops (871). Yet, when it comes to generation,
publicly owned utilities generate only
9.8% of all power, against 37.7% by IOUs
and 40.6% by independent power producers,
with federal power agencies (6.9%) and coops
(5.0%) supplying the rest.
Common Causes
There's been a historical tension (some
would use stronger language) between IOUs
and public power utilities over issues concerning
policy and financing in particular,
but these days it appears that the IOUs,
munis, and co-ops have more in common
with each other than not. Whether it's skepticism
about the administration's proposed
Clean Power Plan (especially its timing), or
the need for industry and government information
sharing on cybersecurity, or concern
about reliable and affordable coal deliveries
by rail, the power industry's various lobbying
groups are either working collaboratively or
at least using the same playbook.
One reason: Two-thirds of public power
systems buy their power on the wholesale
market. Whether they self-generate or
purchase power, they are as concerned as
their for-profit counterparts about regulatory
changes and their potential effect on
reliable, affordable power.
Deining Differences
Differences between the for-profit and
nonprofit providers remain, though, as do
unique challenges.
Local control is currently a plus for public
power in terms of consumer preferences
(as can be seen from attempts in Minneapolis
and Boulder, Colo., to municipalize
distribution systems), but having a utility
staff that is subject to municipal pay scales
can, as more than one person at the APPA
event noted, constrain hiring options. That
competitive disadvantage further complicates
the workforce challenges being faced
by the entire sector. To help address this
challenge, said APPA President and CEO Sue
Kelly, new hires " will have to reflect the
diversity of our communities, " not only because
" it's the right thing to do " but also
because " it's a matter of survival. "
www.powermag.com
Every utility says it operates in the
public interest, but there is a difference
between being owned by a community
and being owned by shareholders. Janet
McTague, project engineering supervisor
for the City of Fort Collins Utilities (one of
three winners of an APPA Personal Service
Award), told me that munis really do have
closer relationships with their customers.
That's good for munis, because they are
more likely to have earned the loyalty of
customers when third-party service providers
roll into town offering anything
from a smart thermostat to the promise
of going " off the grid " with rooftop solar
panels. But, she noted, customers also
expect more because of that local connection,
as opposed to a shareholder-owned
utility that may have its headquarters in
another state.
That customer relationship is nothing
to take for granted, as Kelly noted in her
opening remarks. " We need to find more
ways to engage with our customers, " she
said, because you can't assume that the
customers will always be there.
Common Solutions
Concern about customer retention is one
more thing all utilities have in common
these days. Another is grappling with the
unceasing deluge of new technologies. Kelly
noted that today's public power company
employees need new sorts of skills, from
social media to cybersecurity savvy. One
of the conference headline speakers suggested
one way to address that need.
Futurist Jack Uldrich recommended using
a " reverse mentor " -someone younger who
can help you " see the world differently. "
Newer hires who have technical skills that
might be unfamiliar to older employees but
essential to today's operations-from social
media to virtual reality technology for training-could
be valuable to any utility. That
sort of reverse mentoring is likely happening
in ad hoc ways, but formalizing cross-generational
knowledge transfer (not just from the
" old hands " who have a lifetime of experience
that needs to be shared) could be one
way to acknowledge the value that new hires
bring to the table. ■
-Gail Reitenbach, PhD is POWER's editor.
POWER | July 2015
http://www.powermag.com
POWER July 2015

Table of Contents for the Digital Edition of POWER July 2015
