In a recent interview with APPA, Dwayne Fulk, President and CEO at City Utilities of Springfield, Mo., discussed the ways in which the public power utility has been able to maintain low rates for its customers.
In August 2024, the public power utility announced the selection of Fulk as its new president and CEO.
CU’s electric customers have paid 28% less than the national average and 11% below the state average and on the natural gas side, customers have saved even more with rates 35% below the national average and 52% below the state average.
“I am blessed to be able to stand on the shoulders of those that came before me who have a long history of those low rates and of great management of our utility,” Fulk said.
“I would say what it comes down to is simply prudent investment and we invest in our personnel, we invest in our operations -- also in our infrastructure -- and prudent investment, of course, is two words. It means two things -- prudent, we're careful with how we invest. We want to make sure to only invest what we need and at the right times.”
Investment means “we actually do make those expenditures when we need to do preventative maintenance and to think ahead and to have a five-year operating plan and to make sure we're taking care of our system so we don't have unanticipated or large expenditures down the road,” Fulk said.
“One thing we do strategy wise is we have very conservative financial targets that we make sure to hit, so we get good ratings from our rating agencies and we're able to borrow at low interest rates when we do borrow, which is only as necessary,” he noted.
“Of course, we have the same benefits that other municipal utilities have in that we're a non-profit, so we prioritize our affordability over profit or shareholder returns or returns on capital. So that's helpful to not have that extra layer.”
And as a nonprofit, “we're also tax exempt. So we have no income tax, no sales tax, we're able to get tax exempt rates on bonds, which are usually lower interest rates and we now are able to use direct pay for tax incentives which we weren't able to do before,” Fulk noted.
“And finally, we have local control, so we can tailor our operations and our requirements and our decisions and our governing body, our City Council can as well, to what our specific community needs and not have to worry about a larger footprint.”
Fulk made his comments in a recent episode of APPA’s Public Power Now podcast.
A number of factors have led to increases in the amount of the utility’s required power generation capacity, known as a Planning Reserve Margin. By 2026, CU will be required to maintain a Planning Reserve Margin of 36% during winter months, a significant increase from the current 15%.
In the interview, Fulk was asked to detail the factors that have resulted in increases in the amount of the utility’s required power generation capacity and how the utility is proactively working to add power generation.
“Of course, the requirement comes down to one thing, and that was the Southwest Power Pool increased those planning reserve margin requirements across the board for all of its members, basically due to their FERC approved reliability requirement of one day of outage in 10 years,” Fulk noted.
“Everyone across the country, but especially in SPP, has seen increases in thermal generation retirements because of age and additional regulations and the unknown factor of what those regulations may do in the future and also because of additional knowledge that we've gained about renewables volatility and so a lower accreditation because of that,” he said.
“And when you couple that with extreme weather we've seen in Winter Storm Uri and other events since then, we need new transmission to address transmission costs and congestion fees and then we need new generation due to increasing demand. We've seen electrification across the board.”
Many requests from data centers “that keep escalating higher and higher -- crypto miners that still would like to get in. Oil and gas production. We're not sure about electric vehicles, when those will ramp up again, but we've certainly seen an increase in our industrial and commercial development requests. So all of those I think add up to the need for additional capacity.”
Fulk also details his long-term goals for the utility in the interview.
