Change of ownership of an electric utility is rare but does happen. In the last 25 years, more than 30 public power utilities have been sold, and even more communities have faced the question of whether to sell the utility. While the utilities that have been sold have served communities of all sizes, most of the utilities were smaller — with some only serving a few hundred customers.
While the American Public Power Association doesn’t have an official count of how many utilities have faced a threat to their community ownership, staff regularly hear from members facing emerging or potential threats — whether in the form of an actual sale proposal or grumbling from a community group or elected official.
In recent cases where the community rallied to maintain ownership, each community was able to show that the cost of losing a public power utility would be far greater than the potential “fast cash” gained from a sale. Years after the threat experience, these utilities shared how they continue to showcase the value of public power and stay connected to the community.
Spreading the Message
Princeton, Minnesota, is a town of more than 5,000 people about 50 miles northwest of Minneapolis, has operated its utilities commission since 1911. But in 2018, a mayor was elected on a platform that included dismantling the commission. While Keith Butcher, general manager for Princeton Public Utilities Commission, doesn’t believe there was ever a firm offer to buy the utility, he thought a sellout was the ultimate aim of the mayor, so that the city would then have funds to pay for other projects.
Butcher was hired in 2019, in the middle of the tense political situation for the utility. He saw there had been very little employee turnover at the utility, which meant he had a team that was comfortable with the existing systems and that had deep historical knowledge of the utility. However, he also saw how that stasis translated to very little updating in the technology or processes used and limited communication with customers.
“The mayor took advantage of a vacuum where the utility hadn’t been communicating effectively,” he said. “It proved to me the old adage that if you don’t tell your story, someone else will, and you might not like how it ends.”
Despite the near-term threat, Butcher took a long-term view in strategizing how to improve community outreach. He heard from the various “critics” of the utility, found the local champions for community ownership, and learned who didn’t seem to know much about the utility one way or another. Butcher said the utility made efforts to promote transparency, including creating a YouTube channel for commission meeting recordings, posting more often on Facebook, and becoming more involved with other community groups. Princeton Public Utilities continued to expand its public education efforts by publishing of a series of virtual tours during the COVID-19 pandemic when personal tours were not practical. The video series included interviews with current and former staff members and commissioners. The flow of information helped assuage the critics and to raised the awareness of the local, accountable facets of public power.
Butcher noticed older residents were supportive of the public power utility, but that younger residents were not aware the utility was nonprofit and locally run. He saw the utility’s messages getting shared on community boards and via word of mouth but found it difficult to find a way to reach the younger generation.
“It’s easy for all of us to get in our bubbles and think that everyone is going to our website or knows what we’re doing because [we have] public meetings,” explained Butcher. He stressed that utility leaders should be thinking about how to reach out to all demographics in the community, from the young adults who are paying their first utility bill to the older adults on Social Security income. “It’s a struggle. … I know how I consume news, but sometimes I ask my wife or my sons… ‘If I wanted to get something out to you and your friends, how would I do that?’”
The question of dissolving the commission was put up as a ballot measure in 2020.
Butcher credited a citizen, Lee Steinbrecher, with taking the lead in supporting a robust grassroots effort to keep the commission. For his commitment to local, public power and lifetime of service to the Princeton community, Lee won the Minnesota Municipal Utilities Association's 2024 Community Service Award, which was bestowed soon before he passed away in August.
In that election, residents voted overwhelmingly in favor of keeping the commission — and elected a new mayor. Butcher said there hasn’t been talk of a sale since, and the relationship between the utilities commission and the city council has mended.
“What we went through was purely political,” said Butcher. “The concerns raised were based on personal perceptions and feelings, so we shared facts — about what we offer and what it would mean to be under a different structure. If it had started with a data-driven purpose, it wouldn’t have gotten as far.”
Still, the reason Princeton has a separate commission in the first place is a credit to its founders, who, Butcher said, recognized the need for the utility to make decisions about what is good for the community over the long term, not just through the next election.
Looking ahead, he credits field and office staff with helping share utility messages and answer customer questions while out in public. “All of those little interactions matter. We tend to focus on price and reliability, but we must remember that customers are comparing our services with others.”
He advised utilities to keep an eye on what kind of programs their neighboring utilities offer, whether that’s the ability to pay online, choose between rate structures, see their real-time data, or sign up for outage text notifications with estimated recovery times.
Above all, Butcher said utility leaders should strive to network with other public power entities. “It’s really easy when you are at a small utility to think you are alone. It’s important people understand that we all have a shared experience,” he said. He encouraged utility leaders to reach out to their peers, whether through shared membership in a state or regional association, joint action agency, or via APPA.
Value to Neighbors
In 2016, Mount Pleasant City Power in Utah received a buyout offer from investor-owned utility Rocky Mountain Power.
Shane Ward, power superintendent at Mount Pleasant, said that the offer stemmed from the city’s then-mayor not understanding the value of public power to Mount Pleasant residents and the greater area. Ward said that the mayor had been looking for a quick way to get the city out of debt following the development of a water treatment plant. Prior to the offer, he said the mayor had been meeting with representatives from the IOU outside of council meetings and unbeknown to the utility. The mayor had been asking Ward for details about some of the utility’s assets that were then used to inform the IOU’s offer, which was for $8 million.
“I didn’t know it at the time, but I was giving information to Rocky Mountain on the number of poles, wires, etc. … That’s how they came up with that figure,” he said.
The secretive nature of the data requests led to an incomplete picture of the utility’s assets and completely excluded other aspects of the value of community ownership. Ward said that a lot of infrastructure was not included in the IOU’s evaluation, including all of the system serving a gated community in a mountainous area of the territory. A utility-backed valuation put the utility’s worth at $33 million.
Mount Pleasant residents rallied to shut down the sale.
“The citizens realized we did a lot more,” added Ward. “For instance, we’re working on our lights right now, and that would have had to be contracted out. We’re doing a lot of work for the community. … I don’t know how you put a cost on that.”
Still, the incident spurred on the utility to increase its public outreach efforts.
“After this whole situation happened, we branded ourselves,” said Ward. Branding activities included creating a logo, strategic plan, and capital facilities plan. “It’s important that you know your worth … have a strategic plan, a mission, and a vision. You aren’t going to meet all those goals, but you are doing the best you can.”
In the eight years since, Ward said the utility has made a point to be involved in activities for and with the community, including everything from safety presentations to taking part in a Fourth of July rodeo. The utility also has grown its relationship with a resort subdivision outside city limits that has a lot of seasonal residents. This outreach, said Ward, has helped bridge a divide that had previously been felt between that community and city residents, and helped raise awareness about public power.
“The biggest thing you can do as a utility is let your customers see you. … Let them see that you are doing your job,” he said, noting how residents often mention in council meetings that they see “the power guys out working all the time.” With two other public power utilities nearby, this visibility extends beyond the city limits and into those communities when there is a bigger project that requires additional help.
The utility also has focused on improving and maintaining communication with city leadership.
“Mayors, council members come and go; they don’t stick around like your employees do. Communication is key,” Ward said.
He and other utility leaders have a monthly sit-down with council members to go over what projects are going on, including any concerns about project progress or from employees, so that the council is well aware of what is going on within the department. Between these monthly meetings, council members receive a weekly rundown of highlights and activities in the department.
One area of focus is in diversifying the power supply to reduce the risk from market volatility.
Ward also stressed the importance of making sure your employees feel valued. Mount Pleasant has been involved in a multiyear effort to help crew members progress in their careers and in keeping pay up to par for the region.
Part of the value is tapping into the difference between working for a corporation versus a community entity. He reflected how the working environment at the time of the proposed sale didn’t include a lot of trust. For example, there had been a proposal to put cameras in utility trucks, which was not well received.
Ward recalled how a colleague who left to work for an IOU lamented how “your freedoms being in public power are amazing compared to what [it’s like working at] an IOU. They have to meet their quota. The biggest thing for public power is that we provide a service for our customers.”
Staying Reliable
In Kansas, private companies had been looking at acquiring some smaller utilities in the early 2000s. Gardner Energy, the public power utility that serves the growing community to the southwest of the Kansas City metropolitan area, was one of the utilities targeted to be bought.
Gonzalo Garcia, utilities director at Gardner Energy , said that the city council was a little concerned about finances after a particularly hot summer in 2005, when the city needed to buy excess energy at a premium price. Garcia didn’t see evidence that the utility was in any financial trouble but noted that the reduced revenue could have been a trigger for even considering a sale.
His predecessor focused on educating the council about the benefits of owning the utility, which meant “we can control our rates, our system is a lot more efficient, and our response time is very quick — usually under 10 minutes during regular working hours.”
Instead of selling, the city council voted in 2008 to retain the utility and form an electric utility board to run it as more of an independent business unit from the city. The move was part of a host of changes geared toward bringing additional revenues and services to the city. The council at the time of the vote saw the value the utility brought to the community through its reliability, rates, and response times.
The new structure and utility leadership focused on undergrounding a large portion of the system, started a new tree trimming program, and developed a standard for electric infrastructure and fees for interconnecting to the system. The latter helped bolster revenue, and the former led to a system that is now about 70% underground, Garcia said.
In 2014, the council voted again, this time to combine management of the city’s water, wastewater, and electric services under one department. That move dissolved the electric utility board and formed a utility advisory committee, which provides recommendations to the city council.
Members of the public can attend the monthly advisory committee meetings, which allow customers to ask questions in a dedicated open forum time in addition to the items on the agenda. The utility also makes more of an effort to connect with the community, such as through informational presentations.
“We have a yearly Gardner U, where each department will present what we do, what the utility is all about, show them what we do, what projects we have for the next couple of years, so they can learn more,” said Garcia.
Mostly, though, the focus has been on initiatives that bolster the values that kept the utility city owned.
The utility completed installing smart meters in 2022, and, more recently, installed an automatic transfer switch to tie different circuits and remote devices to aid in more seamless restoration and maintenance. Crews are currently focused on replacing old feeders, which Garcia hopes will allow for an even more flexible system in the coming years.
The utility conducts a yearly rate study to examine how it can continue to offer some of the lowest rates in the state. In 2023, the utility focused on reducing the electric fund balance and did away with power cost adjustment charges to residential customers. Garcia said Gardner Energy also lowered its monthly service charge by about half.
Gardner’s population has more than doubled since the early 2000s, and Garcia said the utility is planning for continued residential load growth, including building a fourth substation and upgrading another. He proudly noted how the utility structure has allowed crew members to develop the skills to take on projects and do installation on their own, without relying on contractors.
“We have a very hardworking, professional crew, and residents know about it,” said Garcia. To further recognize his crew’s efforts, the utility applied for the Reliable Public Power Provider designation and shares how its reliability indices compare favorably to other utilities in the region through APPA’s eReliability Tracker. “That tells me we’re doing the job we thought we were doing — in keeping customers happy and having very little outages.”
