Public Power: An
35 million Americans
receive electricity from almost 2,000 not-for-profit, community-owned
electric utilities. They are operated by municipalities, states, counties,
or other public bodies such as public utility districts.
Public power systems are
deeply rooted in the history of the United States. They are an expression of
the American ideal of local people working together to meet local needs.
Like schools, parks,
police and fire protection, public power systems are part of local
government. They are governed locally and operated to provide an essential
public service at a reasonable price.
Whom does Public
systems serve about 15 percent of the nation's electric consumers.
(About 270 private, profit making electric companies serve about 75
percent of all consumers, and about 1,000 nonprofit rural electric
cooperatives serve the other 10 percent.) Every state except Hawaii has public power systems. In
Nebraska, all electric utilities are consumer-owned.
Most public power
systems are in communities with populations of 10,000 or less.
However, many large cities also have public power -- for example,
San Antonio, Seattle, Memphis,
Jacksonville, and Omaha.
Why is Public
Public power systems
belong and are accountable to the people they serve. Many are controlled by
the city's elected governing board, such as a town council. Others are
governed by a utility board whose members may be elected or appointed by the
council or mayor.
Consumer-owners set the
pace for policy making. Policy board meetings of elected or appointed
officials are open to the public. Through public meetings and at the ballot
box, consumers have a direct voice in expressing their goals and priorities
for the community and its electric utility.
What are Public
On a national average, public
power rates are significantly lower than private company rates.
Driven by service at the
lowest possible cost consistent with community aims and sound business
practices, public power systems are directly responsible to their
consumer-owner stakeholders -- not stockholders who expect a profit.
Every citizen is a utility owner with a direct say in policies.
conservation, safety, and
the environment. As arms of local government, public power systems work to
meet overall long-term community goals.
Not-for-profit electricity attracts and maintains significant commercial and
Public power provides a benchmark for rates and service in what is
essentially a monopolistic industry. Competition keeps rates lower and
service better for all electric consumers.
How Do Rates
Public power rates, on a
national average, are much lower than rates of private power companies.
According to calculations based on U.S. Department of Energy statistics, the
average residential customer of a private electric company pays about 30
percent more for electricity than the average public power customer. The
average commercial/industrial customer pays about 10 percent more than the
average public power customer.
Rates are lower because
public power is not-for-profit and does not pay dividends to outside
stockholders. Public power systems also are more efficiently managed than
private power companies, according to calculations based on U.S. Department
of Energy statistics. Like other local government operations, not-for-profit
public power systems also pay no federal income tax and can issue tax-exempt
bonds for capital expansion.
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