Newsroom - FAQs
1. What is "public power"?
Public power utilities are not-for-profit electric systems owned and operated by the people they serve through a local or state government. Here's the breakdown: 1,843 of the 2,010 are operated by cities and towns; 109 are operated by political subdivisions, such as public utility districts; 43 are joint action agencies (a consortium of public power systems, usually located within a single state); and 15 are utilities established by states.
2. Which is the largest public power system?
In terms of the number of customers served, Los Angeles Department of Water & Power, with 1.4 million customers, is the largest municipally owned system. About 1,400 public power systems serve towns with populations of less than 10,000 people. See APPA’s public power and industry statistics.
3. When were public power systems first created? What are the newest systems?
The first public power systems were created in 1880, even before Thomas Alva Edison made possible central station generation. By 1888, there were 68 public power systems. By the year 2010, one third will have celebrated their centennials. During the last decade, 24 new public power systems were created, several in greenfield developments in California. Twelve were sold, mostly to neighboring rural electric cooperatives. Some of the newest are: Long Island Power Authority 1998; and Hermiston, Ore., 2001. Winter Park, Fla., launched its community-owned electric utility in June 2005.
4. How do you create a public power system?
Typically a community would conduct a feasibility study to determine if a new utility is economically viable and has community support. The community should also identify legal requirements, sources of wholesale power, and project capital and operating costs. Right now, dozens of communities are exploring public power. Check out APPA’s Web pages on "Forming a Public Power Utility" for more information.
5. How are policy and service decisions made in public power communities?
Public power systems are public service institutions, owned by their consumers and governed locally by elected or appointed citizen boards. The community authorizes these boards to make decisions in the sunshine, in open public meetings, with consumer input. See APPA’s Web pages on utility governance and its survey for more information.
6. How much of the nation’s electricity generation does public power own?
About 645 public power systems own and operate generating plants, and collectively account for 9.8% of the nation's electric generating capacity. About 27% of public power's generating capacity is powered by coal, 36% by gas, 19% by water, 9% by nuclear, and 8% by oil. Almost 1% comes from other resources, such as wind power. See APPA’s Web pages with more statistics on utility generation.
7. How do public power rates compare with other utilities?
Public power costs less, due to its not-for-profit nature and efficient management and operation. According to the U.S. Department of Energy’s Energy Information Administration, investor-owned utility residential rates are 14% above those of public power utilities. Investor-owned commercial rates are 9% higher. See APPA’s Web page on "Public Power Costs Less" and "Utility Rate Comparison By State" for details.
8. How does public power contribute financially to its communities?
In addition to lower rates, public power systems also provide payments and contributions to state and local governments in the form of property-like taxes, payments in lieu of taxes, and transfers to the general fund. They also provide free or reduced cost services to cities and states. APPA’s "Payments and Contributions of Public Power Distribution Utilities to State and Local Governments" shows that public power pays about 5.0% of its electric operating revenues to its cities and states - 19% higher than revenues and fees private power companies paid.
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Read APPA: Serving Public Power for 70 Years Speech by Mark Crisson at 2010 APPA National Conference