For nearly 100 years, joint action has played a significant role in the success of public power. Namely, joint action agencies helped public power utilities gain the buying power and economy of scale necessary to secure an affordable power supply. Today, the role of joint action is going through widespread reflection, as these agencies grapple with the roles they can — and should — be playing in a future where electric generation has shifted.
The History
Early in the last century, as generation technologies advanced, large generation projects — primarily coal and hydroelectric — became increasingly cost-effective. By the 1930s, it was becoming clear to many public power utilities that the best way to gain access to that low-cost, reliable power was through the formation of an aggregator of their combined demand. Thus, the first joint action agencies were born, starting with the Grand River Dam Authority in Oklahoma in 1935. Through the succeeding decades, JAAs expanded, with more than 80 across the U.S. in operation today.
The original charters of virtually all JAAs looked quite similar: Procure cost-competitive, reliable wholesale power on behalf of members through generation or purchase. For decades, this straightforward mission created tremendous value for public power, playing an integral part in maintaining retail rates lower than typically found among investor-owned and cooperative utilities.
Today, JAAs continue to embrace their original value proposition — aggregating member needs to leverage economies of scale — but are doing so in new ways to address a wide range of emerging issues. The new millennium has brought tremendous change to the electric industry, as changing fuel sources, new technologies, aging infrastructure, an uncertain regulatory environment, and shifting customer needs have all intersected to create new expectations of public power systems from their customers and their communities.
Evolving Needs
For many public power utilities, particularly smaller ones, the pressures on budgets and staffing can be enormous as they try to stay current on so many developments. Among the 2,000 public power utilities, about half have fewer than 2,000 customers, while many have only a few hundred. Staffing at these smallest systems might be a single person who maintains the lines, reads the meters, and drives the snowplow in the winter. For some utilities, purchasing new technologies, such as an advanced metering infrastructure solution, managing new construction, conducting safety training, completing a cost-of-service study, or even trimming branches away from lines, may be out of reach.
During his eight years with the Kansas Municipal Energy Agency, General Manager Paul Mahlberg has seen significant changes in his members’ needs, and with them, several shifts in the role that KMEA plays in supporting those members. “We have watched many of our members coming to grips with a number of new challenges, from workforce development and retention to infrastructure maintenance and development, including severe challenges brought by supply chain issues,” said Mahlberg. KMEA, a project-based JAA, serves more than 80 mostly small agricultural communities across Kansas.
Matt Schull, who was recently appointed president and CEO of Missouri River Energy Services in South Dakota, has been able to view joint action at work from a couple of perspectives, having previously served for seven years at ElectriCities of North Carolina. MRES has 61 members across four states in the Upper Midwest. “While joint action has become more complex, I believe the need for organizations such as MRES has only grown,” said Schull.
Alice Wolfe, general manager of Blue Ridge Power Agency, has her own distinct view of joint action. Serving nine members in Virginia, including cooperatives and Virginia Tech, BRPA is a project-based JAA that manages no generation, relying wholly on negotiated wholesale power purchase agreements on behalf of its members. As such, Wolfe is one of only two employees with BRPA. With the small size of the agency, her focus necessarily remains on power supply and the impact of new regulations coming out of PJM and the North American Electric Reliability Corp. Yet she acknowledges the need to explore additional ways of adding member value.
“We’ve long conducted a two-day fall conference, and now we’re adding a spring conference as well. Our conferences are small affairs, with only 10–15 utility attendees. That’s a big commitment for speakers to travel into remote locations in Virginia, but I feel this is one of the benefits of being a small joint action agency, as the nine Blue Ridge members can chat with industry experts over lunch and dinner, and I expect that can be just as valuable as the presentations themselves,” said Wolfe.
Assessing Needs
Given the wide range of services that a JAA could be providing, knowing exactly what it should be providing can be a daunting task. For Mahlberg at KMEA, the answer came through a combination of member discussions, strategic planning, and a willingness to capitalize on opportunities that presented themselves. Mahlberg said that KMEA engaged with Hometown Connections in 2018 on its strategic planning effort, including a facilitated retreat. KMEA also conducted a member survey to understand better what members needed most. Among the top-rated needs were lineworker services, system maintenance, and project management.
KMEA was well positioned to act when the opportunity presented itself. As Mahlberg describes, “Many of our members had a long-term relationship with a Kansas engineering and construction firm, Mid-States Energy Works Inc. As it became clear that our members were increasingly relying on outside expertise, the decision to explore acquiring Mid-States seemed like a natural next step.” KMEA purchased it in 2020. Mahlberg said that the acquisition has proved very successful.
In 2023, KMEA again brought in a consultant to walk board and staff members through an update, validating whether the priorities that emerged in 2018 remained the most important to the organization. Member services continued to drive much of the conversation. As this focus grows at KMEA, who pays for what has become an important discussion point. “Our smallest members are the most at risk,” said Mahlberg, “yet they also have the least ability to pay for those services. So, it’s nice to see how supportive our large members have been, recognizing that KMEA can only be as strong as its weakest links.”
This spring, Blue Ridge went through its own strategic planning discussions, which included surveys and group discussions. “It was the first strategic plan update in some time, and I was very pleased with how it went,” said Wolfe.
The small number of members has made it relatively easy for Wolfe to remain engaged with those members. “We have had a lot of conversation about the big picture and what role Blue Ridge could play,” she said.
MRES has gone through similar exercises to better understand member needs and challenges. “We just completed a strategic planning process that explored how our services can best match up with our members. We continue to face many power supply and transmission issues, but the real complexity has been in addressing our member services,” noted Schull. “At this point, we view MRES more as consultants and facilitators to our members, helping them build the capacity in-house to succeed.”
Yet MRES has also recognized that there are times when more active intervention may be necessary. Like KMEA, MRES provides distribution maintenance for several of its members. Schull noted that through biannual member surveys and alternating-year in-person visits, MRES continues to seek ways to strengthen its partnerships with members.
Key Questions
Member services are a major theme emerging from these agencies as they plot their futures. And while smaller JAAs such as BRPA may not have the resources or staffing to quickly stand up a new service, access to those resources does not guarantee a clear path to expansion. Significant questions must first be answered.
To start are what services should be provided. Should they be those that the most members want or those that are most critical to the success of at-risk members? Next are funding issues. Should new services be funded solely by those members using them, or should there be some subsidization among all members? Then, there is the role of the JAA in providing that service. Should it seek to build capacity within its members or to create those functions within the JAA, or does it make more sense to contract out those functions? And finally, JAAs should consider how any end user-facing services get represented. Does the JAA step out from behind the curtain and build its brand with end users, or does it seek to position its members as the providers, with the JAA remaining in the background?
Answering these questions will help JAAs form a clearer picture of the role for joint action in the future. As the energy technology landscape grows and distributed energy resources continue to expand, JAAs and their public power utility members must work out how to respond as these changes bring tremendous opportunities as well as significant challenges to the way they operate.
“There is absolutely a role for joint action in the future. JAAs, such as KMEA, are going to be needed to help their members with their own success,” said Mahlberg.
As Wolfe at BRPA said, “We continue to explore new partnerships and strengthening our collaboration with members, including recently retired utility folks for help on projects.” And, concluded Schull, “The future is bright, but it continues to be important to track and respond to the evolution of the industry and public power.”
While the focus of joint action today has evolved beyond power supply, the need for greater partnerships and aggregating the issues of diverse members into effective solutions will likely remain for many years ahead.
