Minneapolis has taken the first steps toward a ballot initiative that would ask voters if they would prefer publicly owned gas and electric utilities.
The Minneapolis City Council took the action Friday, following a discussion fueled, at times, by election-year politics.
The council has set public hearings for Aug. 1 on the prospect of replacing the services now offered by Xcel Energy and CenterPoint Energy with systems owned instead by the city.
The city is now preparing to enter negotiations with both utility companies to determine the future of their franchises, which expire at the end of 2014.
The council also approved a $250,000 contract with the Center for Energy and the Environment to study sustainable-energy options to aid city negotiators in their discussions with the utility companies.
Preliminary reports from the study group could be available in October or November, with the bulk of the information coming in January after the city election.
“I was looking forward to having the study before we had the conversation because I think it would inform the public discussion,” said Council Member Diane Hofstede, who wants the idea of publicly owned utilities to be examined but not without data from the study. “This public hearing is premature.”
A public hearing is required before an item can be placed on a referendum ballot. That provision caused some to argue that holding the hearing is only a first step in the process.
“If we put something on the ballot, the question will be to give ourselves the authority to do something,” said Council Member Betsy Hodges, who said that having the authority to do something, in her view, presents the opportunity for more discussion. Hodges is currently running for mayor.
“I’m really going to be thinking about this and the broad scope of impacts and all the costs involved,” said Council Member Don Samuels. “It’s going to be about the best outcomes for our citizens. We have to be the voice of reason.” Samuels is also a candidate for mayor.
Some think the ballot item might strengthen the city side of the negotiations. Others, though, thought that it could undermine the city side when negotiators sit down with the utility companies.
“How about we get to fall, and the millions of dollars Xcel will spend in defense of themselves and to put themselves in the best negotiating position results in a referendum that fails. How does that help the city negotiating position?” asked Council Member Sandy Colvin Roy. “This is a path that is not going to strengthen Minneapolis’ position.”
“We are taking the small step today that is going to start this ball rolling,” said Council President Barb Johnson, who opposed the idea of the public hearing before the study group has a chance to provide information. “I hope we have the guts to make the best decision. I’m nervous about it because right now we’re in the middle of a political environment.”
State law would have to be changed before Minneapolis could move ahead to own and operate utility services now offered by the private sector.
“I don’t think it’s our job to stifle debate,” said Council Member Lisa Goodman, who expects a robust debate on the topic at the public hearings in contrast to the council discussion about the hearing. “What’s happening now is purely political.”
After the Aug. 1 public hearings, the City Council would have until their regularly scheduled meeting Aug. 16 to decide if they would place the question on the ballot.
“This should not be a political decision. It is a decision that is made with regard to the safety and health of our citizens,” said Johnson. “I just do not buy argument that this is just a first step and don’t worry about it. It’s a first step that is setting the ball in motion rolling down hill.”
“This is a very complicated issue,” said Laura McCarten, regional vice president for Xcel Energy after the council voted to move ahead with the public hearing. She pointed out that public utilities are carefully regulated in Minnesota.
Only three council members voted against beginning the process: Colvin Roy, Hofstede and Johnson.
Johnson later moved to spend the $250,000 designated for the study on pothole repair instead. Her motion failed 12 to 1.
City-owned utilities
…might be very interesting — as in “innovative” and “good,” or as in “hidebound,” “inefficient” and “bad.” Depends upon how the transition, if there is one, gets handled by all concerned.
One of the Colorado cities where I lived had a long history of city-owned electricity production, dating back to the turn of the 20th century, when residents financed the building of a hydroelectric plant on the river that runs through town. That plant was wiped out in a huge flood in the 1970s, but city residents voted to rebuild it. The city has grown so much that the hydroelectric plant no longer supplies all the necessary power for residents and businesses, but electric bills there are still about 1/3 less per kilowatt hour than they are elsewhere in Xcel’s Colorado territory.
Assuming it all comes to pass, a large assumption I’m not ready to make, citizens should see their electric (and other city-owned utility) bills diminish substantially. There ain’t no free lunch, so bills aren’t going to drop to zero, but I’d guess everyone, homeowner, renter, and business owner, would notice the difference.
That said, and if there’s sufficient public interest, money devoted to a feasibility study might actually be well-spent. For one thing, there’s no guarantee that conversion from private to public utility is possible or economical in this geographic area and environment. A study might conclude that such a change would be expensive enough to persuade leadership that’s currently enthused about the prospect to lose much or all of that enthusiasm. Still, the more public infrastructure that’s publicly owned, the better, I think, so I’d like to see the study done, just to find out what the advantages and drawbacks might be.
Barb Johnson notwithstanding, most of the streets around me are already filled with potholes, patches, and patches on top of the patches. I don’t need a study to tell me streets in this part of the city are in less-than-optimum condition.
public utilities
Interesting article on public utilities via the NY Times:
http://www.nytimes.com/2013/03/14/business/energy-environment/cities-weigh-taking-electricity-business-from-private-utilities.html?pagewanted=all
Private utilities will always resist pressure to make utilities cleaner and more reliable. It’s just not as profitable for them to do so. That’s why we have to keep passing more laws every few years to force them to adopt better standards.
Great idea
Public ownership of necessary utilities is a wonderful idea. Citizens are not going to ask for increases to raise profits or wages just because. Now we just need to get the Kingdom of Parks back under city control, and rid them of their taxing power.