6.2. ERMUSR 02-12-2019 - Laserfiche WebLink

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Banal priffrigo,g Preserve the Regulatory Compact Background Many of the 124 municipal Average Revenue per Kilowatt-hour: electric utilities operating today were established Deregulated vs. Regulated States through their city charters well before the state gave 14 cities formal statutory authority to provide electric 12 service beginning in 1901. 10 In 1974 the Legislature y �� authorized the 3 8 establishment of electric c utility service areas. 6 In the 1990s, many states, including Minnesota, v 4 debated whether to allow unregulated companies to 2 sell electricity to end-use customers. This is known in 0 the industry as deregulation N CO CT 0 N m v N 00 CT 0 l N m v' LD m m rn co 0 0 o 0 0 0 or providing retail choice.„ m o c o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N Sixteen states, excluding Minnesota, followed the —Deregulated States -National Average Regulated States deregulation route. The average price per kilowatt- Source:Energy Information Administration,Forms EIA-861 and EIA-826.Information courtesy of American Public Power Association. hour in deregulated states has consistently been above the national average. generation, power lines, poles, substations, water treatment equipment and chemicals, pipes, etc. In 2001, the Legislature established new fundamental Unregulated sales would pass more of these costs service standards and customer protections for all onto a utility's remaining customers through higher utilities in the state, to ensure that all Minnesotans rates. In addition, consumers would be buying from could rely on their provider's service and to ensure companies not subject to the safety regulations reasonable rates. There are no provisions applicable to discussed above. a non-utility provider. MMUA Position Despite the fact that Minnesota consciously rebuffed A regulatory model that ensures all customers pay an the deregulation threat of the '90s, bills continue equitable rate for access to and use of municipal utility to be introduced and heard in committees for such services should be maintained. Persistent pressure ideas as having the state allow unregulated third- from non-regulated third-party business interests, party electricity sales from generators directly to the such as has been seen in the solar community, customer. Some proposals have required municipal threatens to undermine a municipal utility's finances. utilities to"wheel" energy from third parties across Privatizing municipal utilities is not the answer and municipal power lines to retail customers in violation would likely create more expenses. The Legislature of the utility's exclusive service area rights. Third should support and maintain the current regulatory party sales could also occur by selling electricity from compact, and recognize the value of the dependable solar panels or other generating equipment sited on services provided by municipal utilities. The a consumer's own property to retail customers, while legislature should reject giving third-party providers maintaining ownership of those panels or equipment. any advantage over municipal utilities, as well as any Providing reliable municipal utility services comes other effort to weaken the regulatory compact. with certain unavoidable expenses such as electric 2019 State Position Statements /11 115