8/20/2007

Mayoral Forum-Second Question

2. Should the City of Great Falls be in the electric utility business? Why or why not? If not, what will you do as Mayor to extricate the City from the utility business?

Larry Steele:

This is a tricky question. I believe in smaller government, so on that point I am against the city involvement. I also believe that computation is best for the consumer, because it gives customers a choice. If I am elected as mayor and the city is in the electric utility business, I would let citizens of Great Falls are given the option to purchase their energy for the city.

Susan Kahn:

Let’s define electric utility. There are three distinct areas of an electric utility, Generation, Transmission and Sales.

* Generation is capital intense and requires a host of competencies to deal with numerous federal and state regulations, fuels handling, maintenance and operation one or more power stations
* Transmission & Distribution is power moves and switches over an infrastructure covering hundreds of miles connecting the grid. At the micro level power moves to the industrial and residential consumers within the service territory through a series of sub-stations.
* Sales, a generation utility or reseller supplying power and billing the end user

In its present form the city should not be in the generation business or local distribution business maintaining power plants, sub-stations and wires. This is better handled by private industry focused solely on the business.

There is scale of economies buying and reselling large blocks of power. With this added leverage, the city can in theory lower costs and save the taxpayers. With proper oversight and good management this type of utility approach can be beneficial. I’m not convinced we have a sound plan in place today.

The city needs to run the affairs of the citizens in their best interest, not venture off into a side business above our present ability. I’ll need to look at this current agreement in greater detail and consult with some experts in the energy field and see what our options are.

Ed McKnight:

Many people think that a government entity should not be in any business of any kind. Others think a government entity will look out for the best interest of the people they are serving. There are pros and cons to these approaches. I think the character of the individuals making up the structure of the organization is most important.

As Mayor I would start with stronger leadership and work with the commission and guidelines we have within the charter already. There are far more astute people than I who are aware of the technical and legal difficulties of extricating the city from ECP as it stands now.

I'd like to apply the general question to one specific business, Electric City Power. It makes sense for the city to run the water utility because we had to build it, maintain it, and have lots of experience administering the utility. There is no competition and I don't know of anyone who is dissatisfied. In fact it's not a business, it's a service provided by the city.

In the case of electricity, the poles are there, the wires are there, industrial customers can negotiate their contracts, there is competition, ECP has no experience and the plan is to sell power on the open market outside of Great Falls. In fact, the residences of Great Falls are prohibited by law from being a customer so this is not a service provided by the city to it's residences. ECP is a business owned by the city.

I find it ironic that the title of the ordinance that permits the city to create ECP states “ MARKET ELECTRIC POWER SERVICE TO CONSUMERS WITHIN THE CITY OF GREAT FALLS” but then in the ordinance defines “consumers” as commercial and industrial customers and spells out selling power outside of Great Falls.

When someone asks me if he should invest in a company, the first question I pose is how is this company going to be managed? If the utility was voted on and well managed and there were no complaints, there would be no issue. Great Falls citizens did not have the opportunity to vote on ECP, there are lots of complaints, and I think the management has been exceedingly poor.

Even if the majority opinion of the people was to extricate from the electric power business, extraction could be complicated. The powers that created ECP cleverly mandated a super majority by city code 5.20.120 to dissolve the corporation

First, there has to be a majority opinion of the people that getting out of the business is the right thing to do. I've spoken to people who think ECP was a good idea gone awry and would like to work within the original guidelines set by the Community Economic Development Counsel in their Strategic Plan for Economic Development in Great Falls. Principal 7 states “ Tapping the potential of its alternative resources can set Great Falls apart as a business location” and “Promote Great Falls an an 'Urban Laboratory' for Alternative Energy” is one of the strategies.

Second, four of the commission have to agree.

If fewer than four commission members support dissolution of ECP, the following options remain

1. Explore the legal technicality of amending the City Code allowing a simple majority for dissolution.
2. Have three commission members bring ethics charges against the two who refuse to represent the will of the people and replace them attaining a super majority
3. Hold a recall election to replace commission members who refuse to represent the will of the people and thereby attain a super majority.
4. Pass a citizens' ballot initiative forcing Great Falls to give up the business.

Note: All this is really a matter both for legal experts and based on the assumption that commissioners are non-responsive to what people want.

5 comments:

Anonymous said...

I think the city should be in the utility business. It works all across the county for city-county agencies. Group purchase is simple economics.

That said, you need to know what you are doing and this current outfit is clueless. I am embarrassed for our city because of the unprofessional PowerPoint they presented to the City of Helena. No way would I buy anything from those monkeys, how fitting that slide was.

Giving professional management of ECP the city will save money for the taxpayers, even if we are excluded from the choice as a supplier.

Time to unload some deadwood.

big sky husker said...

So, Mr. Steele is against city involvement. Ms. Kahn needs to study the issue more. And Mr. McKnight... didn't answer the question. Either you're for city involvement or you're not. There is plenty of evidence "city run" business efforts are not done well. And those efforts (swimming pools, golf courses and the Lewis and Clark fiasco) were much smaller, financially, than what's going on with the coal-fired electric plant.

The city should have no financial involvement in building/operating/maintaining a facility that generates electricity.

big sky husker said...

BTW - I think it's embarrassing Ms. Stebbins chose not to answer the questions posed by GeeGuy.

Anonymous said...

Does anybody outside of the Lawton-Stebbins cabal really know ECP?

Anonymous said...

Ask Helena, they got a peak at it.