Coopers & Lybrand has released its 1996 Electric Municipalization Review, which examines the two municipalizations completed since the Energy Policy Act of 1992: Broken Bow, OK, and Bozrah, CT.
Broken Bow, which began operating in 1995, serves the new six-megawatt (Mw) load of one industrial customer and owns no electric facilities; Public Service Co. of Oklahoma serves town residents. The Town of Bozrah had been served by a privately held corporation, Bozrah Light & Power (BL&P), whose owner was retiring and wanted to sell. The municipal utility in Groton, CT, bought BL&P for $5.4 million to enlarge its service territory and help replace its shrinking defense-related customer base.
The report also reviews six ongoing municipalization and other public power efforts:
The Wing Group: Assisting a group of New York cities to municipalize by taking over Niagara Mohawk Power Corp.'s facilities. Would bear all upfront costs and recoup investment from realized savings.
Palm Springs, CA: Pursuing a "muni-lite" approach. Has asked the Federal Energy Regulatory Commission to order Southern California Edison (SCE) to provide transmission to the meter under section 211 of the Federal Power Act. Plans to compete with SCE.
Long Island Lighting Co.: Subject to several efforts by established public power entities to lower rates. Proposals include a government buyout and dismantlement, a modified muni-lite approach, and community efforts to municipalize.
Modesto Irrigation District, CA: Plans to develop a noncontiguous service area by acquiring customers served by other utilities, starting with neighbor Pacific Gas & Electric Co. Destec plans to supply and transmit the additional power under a wholesale transmission agreement with PG&E. (A 1919 state law allows public irrigation districts to sell, dispose of, and distribute electricity outside their boundaries.)
Hawesville, KY: Largest industrial customer of Green River Electric Co-op. Wants to municipalize to serve new industrial loads as well as existing loads now served under interruptible tariffs. Has signed Enova Energy Management, a San Diego Gas & Electric affiliate, as consultant.
Stow, MA: Served by multitown municipal utility operated by the Town of Hudson. Plans to take over Hudson's facilities within its town limits and buy power from a third municipal utility in Littleton, MA, which buys its power from Northeast Utilities.
Coopers & Lybrand concludes that interest in public
power is driven by the desire of retail customers to choose their electric suppliers, mostly to obtain lower rates. While municipalization and other public-power options are the best ways
to depart incumbent utility service, the firm believes that interest in municipalization will dissipate as other avenues emerge. (em LB
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