Smallest losers win: RP3 recognizes efficiency

It's not rocket science to figure out what customers want from their electric utilities — reliable power supply, reasonable prices and good customer service. The more efficiently a utility operates, the more likely it is to keep the lights on and customers happy.

The American Public Power Association's renowned Reliable Public Power Provider (RP3) program credits participating utilities for excellence in the areas of reliability, safety, workforce development and system improvement. Utilities that make the grade demonstrate superior efficiency in their operations. The most recent analysis — of data gathered from the RP3 program and the U.S. Energy Information Administration's 2012 Form 861 — reveals that RP3 designated utilities experience about 22 percent fewer energy and distribution system losses than other utilities overall.

The median loss percent for RP3 designated utilities is about 3.83 percent, compared to 4.35 percent for all public power utilities, and 4.91 percent for utilities overall.

For the purposes of the 861 form data, energy losses are the difference between the total sources of energy (generated or purchased by a utility and fed into the system by customers who generated excess power through rooftop solar, etc.) and the total energy that reaches end-users. A utility may experience losses due to any number of system factors, including varying distribution voltage levels, length of feeders, efficiency of transformers, etc.

Losses are expensive — for the utility, and ultimately for its customers.

For example, a utility that buys 100,000 MWh of power at $40 per MWh and experiences a 4.91 percent loss incurs a cost of $196,400 per year. Under these hypothetical circumstances, APPA found that RP3-designated utilities are losing about $43,000 less energy per year than utilities overall. In general, public power utilities are losing about $22,000 less energy per year than other types of utilities.

A utility can improve operations, revenue, and service by examining and containing its losses. APPA's RP3 program not only credits utilities that are doing well but also shares strategies for improvement and best practices with applicants. Though APPA staff knows the RP3 program does not itself lower losses, we do think it helps utilities focus on making excellent long run operational decisions that result in higher performance over time.

Applications for RP3 Year 10 are due Sept. 30. For more information, visit

This post is based on research conducted by APPA intern Andrew Garrison."