Municipal Utilities: Will Their Numbers Grow?

Municipal Utilities: Will Their Numbers Grow?

The number of municipal utilities reached a maximum of about 2500 (accounting for about 5 percent sales of U.S. power) back in the early 1920s. The number is still around 2000. Why is that?

Part of the reason for no or negative growth in munis is that it's pretty tough and expensive to form a muni once the city is being served by an independently owned utility (IOU) such as a PG&E or Xcel Energy. You have to wait until the franchise expires (or try to buy it out) and then the city would need to acquire the infrastructure through some sort of condemnation proceedings.

However, in the last decade, there's no question but that interest in public power and municipals in particular is growing for several reasons. The nationwide smart grid initiative has spawned news-worthy examples of cities adopting smart grid technologies: Austin TX is an example of successful implementation, Boulder CO not so good, several other cities in-between. Then there is the economic draw- municipal utilities have access to government generated power at wholesale rates (if they have access). And there's something comforting in knowing that your utility is managed by your local government rather than corporate offices that can be thousands of miles away.

And of course, a number of cities (speaking of Boulder) want to get greener through increased use of wind and solar and they may believe that the big utility is not doing enough to retreat from fossil fuels.

In a bigger sense, local grid management fits right in with other industry trends- microgrids, distributed resources. So maybe the time is getting right for a new resurgence in municipal utility formation.

What do you think? Which statement best expresses your thoughts. Also, your comments are extremely useful to our readers.

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