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Public power origin stories: Establishing and maintaining community ownership in different eras

The American Public Power Association was established 80 years ago, but the history of public power stretches back another 70 years to when the electric utility in the city of Butler, Missouri, was established in 1881. More than 2,000 public power utilities have since been established. Most were created in those first 50 years of electrification, many more formed concurrently with APPA’s founding following the formation of the Tennessee Valley Authority and other New Deal initiatives, and a proud few have navigated through municipalization in recent years after decades of cooperative and investor-owned utility service.

To celebrate all the different reasons, eras, and processes through which public power utilities have come into existence, Public Power heard from a utility established from each time period — Plymouth Utilities, Wisconsin (est. 1900), Greeneville Light & Power System, Tennessee (est. 1945), and Jefferson County Public Utility District, Washington (est. 2013) — to find out how each navigated through the process of becoming — and staying — community owned.


Setting the Spark for Municipalization and Keeping It Lit: Plymouth Utilities, Wisconsin

On Sept. 12, 1890, Christopher Kassebaum and Henry Bubb spent their first night as the official street lighters for the community of Plymouth, Wisconsin. As the two men went through the motions of cleaning and filling the 17 kerosene streetlamps that lighted the community that evening, they likely had no idea that they were setting the spark for a decade of movement through the community to control its own lighting and electricity.

At the time, Plymouth, a city along the Mullet River near Sheboygan that now has nearly 9,000 residents, was a center in the bygone art of wheelwrighting, or the craft of building wooden wheels. The activity was so central to the city’s development that its nickname remains “Hub City.”

The path to Plymouth Utilities’ existence started in 1895 with the attempt at an electric franchise agreement in the town by entrepreneur H.E. Dow. The community rallied together at a citizens meeting to head off the creation of an investor-owned utility, and the council voted down Dow’s franchise proposal. However, his company, the Plymouth Refrigerator, Water, Light and Power Company, was allowed to construct electric lines in the city that could be used by anyone who wanted to take advantage of his offer of service.

Five years later, the city council started a fact-finding mission about how it could manage a utility to serve the community and visited the newly formed public power utilities around the state, including Beaver Dam, Watertown, Columbus, and Waupun.

On Oct. 9, 1900, the council approved a franchise agreement with a Wisconsin industrialist to construct a waterworks and lighting system with the requirement that, upon completion, the city would have the option to purchase the system for around $70,000. The city made that purchase and paid another $70,000 for the infrastructure, machinery, and equipment of the existing Plymouth Water, Light, and Power Company.

By the fall of 1901, the municipality owned both a water and an electric system and had established a mission statement that promised “modernly lighted homes and business places” and “moderate electric rates.” That mission statement continues to drive Plymouth Utilities 119 years later.

Though the early years saw setbacks, including a 1911 power house explosion that led to momentary public discord over the need to issue a $35,000 bond to reinvest in the electric plant, these obstructions often provoked the utility to modernize and improve its business practices and facilities in a way that kept it as an example of excellent not-for-profit service.

Today, Plymouth has a second title that makes it first among its peers in the state: It’s considered the Cheese Capital of the World. Among the many cheese companies that call Plymouth home are Sargento, Sartori, Masters Gallery Foods, and Great Lakes Cheeses. A few miles outside of the city — but still within the city utility’s service territory — is the headquarters of Johnsonville Sausage. These industries employ much of the county population and rely heavily on the electrical power made possible by Plymouth Utilities.

Despite its strong history of serving the community, Plymouth Utilities faced a new challenge to its continued existence beginning in 2010, just as City Administrator Brian Yerges took over management of the utility (Yerges left Plymouth in May 2020 to become general manager of Electrical District No. 3 of Pinal County, Arizona).

For much of its existence, Plymouth Utilities reported to an independent commission. This changed in 1997, when reporting shifted over to the city council. This change meant that the utility immediately needed to build relationships that hadn’t existed before.

“There was some conflict between board members at the time,” Yerges said. “Part of the issue was a contested mayor race a few years before I started. That natural division resulted in some local officials taking a position in direct opposition to that of the mayor, who had always been supportive of owning and operating a municipal utility.”

Yerges also cites general confusion among some people at the time about the utility’s role and management, in part because of what he recognized as insufficient communication between the utility and the council. This manifested itself, in particular, over the question of why Plymouth Utilities should remain involved in the American Transmission Company, a transmission-only utility owned by Wisconsin IOUs, cooperatives, and public power utilities.

“It was difficult for some local officials to understand how and why the city owned a small portion of ATC and why we continued to make investments into ATC on an annual basis,” Yerges said. “Elected officials at the time did not realize that transmission capacity and access was a problem. We had to explain the who, what, where, when, how, and why of ATC.”

As these issues developed, the council hired Baker Tilly, the utility’s longtime auditor, to conduct an independent study analyzing the feasibility of a sell-off. To Yerges’ relief, the Baker Tilly report made the case that it was not in the best interest of Plymouth to sell its utility.

“That meant we needed to then start the process of communicating the outcome of the report to the community,” Yerges said. “The immediate reaction was to spend some in-depth time studying the report and communicating it to the board, employees, and the community. Thankfully, the local newspaper also did a nice job reporting on the results and presenting the facts of the economic evaluation.”

Then came the twist: What had been started by the council as a process to possibly sell the utility led it to instead want to codify its existence and herald its value.

Later that year, the council adopted Common Council Resolution 18 of 2010, “reaffirming the city of Plymouth’s support of continuing to own and operate a municipal electric utility.”

“Since then, there have been no efforts to raise the prospect of selling,” Yerges said. “Instead, staff and electric officials have increased their activities in promoting the value of public power.”

Notably, they didn’t rest on their laurels for too long. The utility came away from the experience and the reaffirmation of its existence with the determination to identify issues and opportunities to better improve council-utility relations and generally create a better utility. This major modernization effort included investment in a new operations center, upgrades to substations, investment in advanced metering infrastructure technology and LED streetlighting, and taking on a 10-year capital improvement plan to continue investing in infrastructure and distribution system improvements.

With all that has happened, Yerges recognizes the importance of keeping a perspective on how the utility had to navigate through everything to get to this place, from its founding to its sell-off rejection to today.

“It was about relationship building, increased communication and transparency, and education,” he added. “Where there is conflict with a board or council, it is easy to get caught up in an ‘us versus them’ mentality. The main thing you need to do is keep a long-term perspective while focusing on your mission of providing safe, reliable, and responsible utility services.”


Protecting the Promise of Local Control: Greeneville Light & Power, Tennessee

The year before the American Public Power Association was established, 1939, saw a large increase in the formation of public power utilities, with 69 of today’s utilities establishing service that year. This was in large part due to the absorption of some private utilities into the Tennessee Valley Authority. The creation of public power utilities slowed down during World War II, then resurged in 1945 as TVA expanded into East Tennessee.

One such utility is Greeneville Light & Power. Privately owned electric service first appeared in Greeneville in 1886, when a local businessperson built a coal-fired generating station downtown. In the early 1900s, that service provider was bought out by the Tennessee Eastern Electric Company, which took over most of the region’s small utilities during that period. To cover the needs of its many towns, the first hydroelectric dam in the region was built a few miles outside Greeneville.

TVA formed in 1933, but its expansion into Northeast Tennessee was delayed due to logistics, the actions of the private power companies, and priority recalibration due to the impending war effort.

After TVA purchased the East Tennessee Light and Power Company in December 1944, Greeneville, along with Bristol (both Tennessee and Virginia), Elizabethton, Erwin, and Johnson City, started the new year negotiating the purchase of their utility from TVA. On June 16, 1945, the Greeneville Light & Power System was created, taking over all the former IOU service territory in Greene County.

In the 75 years since the public power utility was established, only four general managers have run GLPS, with current General Manager Bill Carroll spearheading the utility for almost half of that time.

“So much of what we have today is because of the foresight of those who were creating this utility then,” said Carroll, who is retiring later this year. “Those first two board meetings spanned two days each and set us up to get through the next 75 years as a countywide utility.”

In the last few years, though, Carroll became concerned that the state of operations had changed enough to merit a rethinking of some of the ways GLPS had been doing business. This coincided with the passage of the Tennessee Municipal Energy Authority Act in 2016. This legislation greatly reduced the procedural overhead involved in converting a traditional public power utility to an energy authority, something that had been achieved by a few Tennessee utilities previously but hadn’t been feasible for Greeneville due to the high legal fees and increased regulatory hoops required for the conversion, Carroll said.

“The politics of a community can change pretty fast, and a utility that looks to be supported and appreciated by its board can suddenly see that change through no fault of its own if the politics of the town changes,” he said.

“Our longtime mayor and board chairman shared my belief that, if you don’t do this when everything looks good in your local politics, you might find yourself, two elections later, regretting it,” he added.

After presenting the case for becoming an energy authority to the town council in November 2018 and getting its quick approval for the plan, the existing GLPS board was abolished as of midnight June 30, 2019, and replaced immediately with the Greeneville Energy Authority Board.

The central change that came with the creation of the energy authority was the shift of board composition and elections to be completely independent of town elections. Instead of having a traditional utility board, Greeneville Energy Authority board member candidates are chosen by the energy authority itself and then must be approved by the town council. The council can reject a nominee but cannot propose another option, meaning board members will always be selected by the energy authority first.

“It was important to me to create a transition that would ensure the future viability of serving the community with its power needs, create circumstances where we could be more insulated from politics, while [ensuring that] none of the customers would ever feel any difference in how they are served by us,” he said.

Carroll said the benefits of the shift extend beyond political insulation.

One big benefit is that the days of worrying about an unexpected sell-off threat are thought to be a thing of the past. “As an energy authority, any attempt to buy the utility would have to be OK’d by the energy authority board, approved by the town’s mayor and aldermen, and then would have to be voted on by the town in a public referendum,” said Carroll. “If the people trying to buy it can get through those hoops and the townspeople would still want to sell us, then maybe we should be sold.”

“We now have more flexibility to go into joint agreements and cooperative efforts with private and other governmental entities,” he said. “This is particularly important as we go into the process of looking at broadband. We’re still very early in the process and we don’t know yet if we’re even interested in competing with the cable company, but we wanted to at least have that option while we built out a broadband backbone for the city and county uses.”

Since making the move to an energy authority, Carroll has been in talks with other Tennessee communities that are interested in taking advantage of the new state legislation and following in GLPS’ footsteps. At this point, two communities he spoke with — Erwin and Jellico — have joined many others in the state in following through on the conversion. 

But through all the changes, Carroll thinks a big part of Greeneville’s success has been the way things haven’t changed.

“People still get the same great service, work with the same great employees, come to the same building they’ve always come to, see the same logo everywhere, and write the check to the same name,” he said.

“We’ve humbly served our friends and neighbors for 75 years as the Greeneville Light & Power System,” Carroll added. “Even though an organizational change was a good idea, we kept that name as a reminder of why we were created, what our focus must be, and of the quality of service that our customers deserve. Our original name proudly declared that we were public power, that hasn’t changed.”


From Growing Pains to Promises Delivered: Jefferson County PUD, Washington

By Will O’Donnell, communications manager, Jefferson County Public Utility District #1

One of our former commissioners was fond of saying that we started the electric utility (Jefferson County PUD in northwest Washington) with next to nothing, not even a screwdriver nor a single spool of wire. Sure, we had wires and poles and substations, but the operations yard was empty when we took over: no bucket trucks, spare transformers, tools, gear, or electrical employees.

We hired our first electrical employee in November 2012 — five months before we took over operation of the power system in April 2013. From that November to April, we had to hire and outfit an electrical division from scratch. Not an easy task, but we did it. That first electrical hire, Kevin Streett, is now our general manager. And quite a few members of the original crew he put together are still with us today, running the electric utility they all helped to build.

One of the most immediate and obvious improvements Kevin and his crew brought to our customers came in the form of outage response times. A decade prior to our purchase of the system, the IOU had eliminated all of its local service staff and outsourced the line work to private contractors located almost two hours away — contractors who, when a storm hit, were also busy working in other parts of the IOU’s territory and who needed to cross one of the world’s longest floating bridges to reach our community. A bridge famous nationally for sinking during a storm in the late 1970s and infamous locally for closing when the winds pick up. Needless to say, our local crews, living in the community they serve, are able to respond much faster to local outage events than contractors from far away.

Improving reliability took a bit longer, but we have done that, too — expanding substations, adding reclosers, replacing regulators and transformers, building our own SCADA system, and undergrounding dozens of miles of overhead lines every year. We’ve invested millions in equipment repairs and infrastructure upgrades that the IOU had neglected to do for decades.

By becoming community owned, we are able to provide our community with some of the cleanest, most affordable electricity produced on the planet. The majority of the power our previous electric utility provided came from coal and natural gas generation. As a public power utility, we are able to purchase all of our power from the Bonneville Power Administration, which delivers 97% carbon-free electricity — the bulk of it generated by hydroelectric dams on the Columbia River.

Was it easy? No. Our first couple of years operating the electric utility could often be chaotic, and by year five we still struggled. Our challenges were well documented in the local press and even became the subject of an anti-municipalization white paper by a regional think tank. In fact, that white paper, which was published in 2016 and unsubtly titled, The Failed Promises and Politics of Jefferson Public Power: How Creation of a Public Electric Utility Led to Higher Rates and Lower Customer Service, continues to be circulated by anti-public power IOUs.

In late 2019, it was being used to discourage a city in Kansas from municipalizing. A city staffer even called our utility to see if some of what was being alleged about us was true. As I explained, depending on how you looked at it, some of it was, and some of it wasn’t, but a lot of it was merely taken out of context.

We did have trouble with customer service and billing coming out of the gate. We had trouble with staff turnover early on. And our rates haven’t always been lower than the former IOU. Were we a failure? Not at all. Did we break any of the promises made? No, some just took a bit longer to deliver than initially planned. But now, in 2020, seven years in, we are strong and financially stable and we feel like an unqualified success. We are fully staffed, well equipped, and we are paying cash to expand and remodel our very outdated customer service and operations center.

Municipalization is hard, but the benefits are huge. Though we acknowledge the struggles, and even some foibles, the staff and commission at Jefferson County PUD are extremely proud of what we have built. We hope we can help the next batch of communities that want some honest advice about a difficult journey do the same.