5.4. ERMUSR 05-20-2014 - Laserfiche WebLink

Home Browse Search

Public Power Role in Minnesota Minnesota's investor owned utilities are often referred to as "regulated utilities"because the Minnesota Public Utilities Com ission is charged with administering their rates and interpreting the many statutes that determine how e utilities should be operated in order to balance t e interest of customers with the utilities' sharehol•ers'interest. Minnesota's 44 rural -lectric cooperatives and 1 ® 125 municipal electr utilities are regulated too. - - Municipal electric utilities,which are owned by the .44\ 4 -� -40' £ customers they serv: and operated not-for-profit, ' -- are effectively regul. ed by their local governing bodies. Of the 125 m nicipal electric utilities, 59 . are governed by loca!public utility commissions established under st.to law or city charter. The 4r` other 66 municipal utilities are governed by their city councils. For several years, the role of Minnesota's consumer-owned utilities has been denigrated by some advo- cates for certain legi l ative proposals. These proposals would have painted consumer owned utilities and investor owned utilit es with the same broad brush, imposing mandates that aren't appropriate for local, not-for-profit utilitie.1 As a result, Minnesota's municipal and cooperative utilities have had no choice but to oppose the applic.k ion of this legislation to them, while these advocates decry our efforts to "get ex- empted"from their p oposed laws. rj Consumer-owned utilities are subject to a whole •. I host of state laws-from labor laws to consumer _ . ./< '� . ..- protection statutes to conservation and efficiency �r f---"°411-4°1',7' - requirements. (And unlike other utilities,'munici- " -" pal utilities are also subject to open meeting and �,.. y '�'` \ government data practices laws) For both the for-profit and not-for-profit sectors to incorporate a statewide policies that affect utility operations, f ' - - like the Next Generation Energy Act of 2007, con siderable industry input is needed in order to craft !' ) : workable legislation that is flexible enough for , - AN ,, statewide adoption. In most cases it simply doesn't 4"�r tzi, work to apply the same cookie cutter approach to '``; 1 k, �q ., large, investor-owned utilities and smaller, not- for-profit, consumer-owned utilities. Truly, one size does •of fit all when it comes to laws and utilities. In fact, very few laws that that affect operations in one sec or will make sense in the other. For very sound reasons,investor-owned, state-reg- ulated utilities and c•nsumer-owned, locally regulated utilities have long been governed under different, parallel, and equally -ffective regulatory structures. These dual modes of regulation have been in place for many years and .ve served Minnesota well. There are numerous reasons why the legislature should continue to respect the long tradition of local regulation by consumer-owned utilities. �‘ ' \ First, IOU's are vertically-integrated, while municipal utilities largely - ,� concentrate on providing electric service at retail. We generate very little \,I\ of our own power and typically do not own transmission lines. For the most�- part municipal power comes from separate wholesale power providers, and '' i': - 1- we must pay for power delivery from distant sources. On the other hand, 101