An Eye Toward the Future: The Challenges Facing Municipal Electric Utility Managers PMEA Annual Meeting September 12, 2013 Jeff Haas Vice President of Membership & IT American Public Power Association
About APPA The American Public Power Association (APPA) is the service organization for the nation's more than 2,000 community-owned electric utilities that serve more than 47 million Americans. It was created in 1940 as a non-profit, non-partisan organization, and its purpose is to advance the public policy interests of its members and their consumers, and provide member services to ensure adequate, reliable electricity at a reasonable price with the proper protection of the environment. APPA is governed by a regionally representative Board. Approximately 62 staff work in APPA s office in D.C.
APPA Membership Overview APPA has 1,355 regular utility members 96 out the top 100 largest public power utilities are members of APPA >50% of members serve < 5,000 meters APPA members serve more than 40 million customers Approximately 90 % of public power customers are served by APPA members 17 utility members in the state of Pennsylvania
Diverse Membership
The Average Muni Nationally - # of residential customers 2,010 customer-owned utilities Mean: 9,900 Median: 1,650 Pennsylvania - # of residential customers 35 customer-owned utilities Mean: 2,100 Median: 1,328
Big Challenges Macro Issues Tax-exempt financing Environmental regulations Federal Power Program (PMA s) Cyber Security Wholesale Power Markets New generation and transmission
Big Challenges Micro Issues Local financial constraints General fund transfers/ Payments in Lieu of Taxes Distribution system maintenance; reliability Rates Aging work force Shifting political winds Technology advancements
Communicating Value Unprecedented times for public power Complex issues driving industry Customers expect information
Build Positive Collateral Because the lights don t always stay on
Build Positive Collateral
Build Positive Collateral Talk about the benefits of public power: Benefits of local control Low rates Payments in Lieu of Taxes; transfers to general fund Reliable service Responsive to customers Revenues stay in the community Access to tax-exempt financing Local control over special programs like energy conservation Much more
Brand Identity Don t assume your customers know who you are: out of sight out of mind
Evolving Customer Expectations Don t assume that what you did last year will suffice moving forward Technology is a major contributor toward customer perceptions
Web Searches: Traditional vs. Smartphone
APPA Resources Pride in Public Power campaign RP3 Program Public Power Week DEED program Positioning Your Community to Succeed in Sellout Evaluation publication
Benefits of APPA Information resources for public power professionals and utility boards Education and training designed specifically for the public power employee that is affordable Special utility programs that improve the effectiveness of electric utility operations Staff of dedicated experts that are committed to the long-term success of its members
PublicPower.org The Association s gateway to leading industry information and resources. Members enjoy exclusive access to: regulatory and legislative analysis; benchmarking reports; electric utility statistics; utility operations assistance; archived conference presentations; and, much more
PublicPower.org APPA s most requested online member resources include: Costing and Pricing resource page Selected Financial and Operating Ratios of Public Power Systems Distribution System Reliability & Operations Survey Payments and Contributions by Public Power Distribution Systems to State and Local Governments APPA Report on New Generating Capacity: 2011 Update Implications of Greater Reliance on Natural Gas for Electricity Generation Growing Your Employees of Tomorrow Report
APPA User Communities APPA offers member utility employees access to more than two dozen user communities on all aspects of utility operations. Allows utility employees with common interests to obtain assistance from industry colleagues to solve problems Locate resources and benchmark activities against similarly situated public power utilities * APPA is upgrading its user communities in the next few months to allow for even more collaboration. The technology will bring the strengths of popular social networking tools to a public power-only platform and allow groups of all sizes to share information.
APPA Academy APPA delivers over 100 courses, workshops and webinars annually on a variety of topics relating to the management, operation and governance of public power utilities. These workshops, courses and webinars are tailored for public power professionals and award continuing education units (CEUs) and professional development hours (PDHs) for accountants, engineers, human resource professionals and legal counsel. The ability to network and collaborate with your peers at APPA educational venues is invaluable.
APPA Academy APPA has dramatically expanded its webinar series to deliver timely information and training to utility employees in all functional areas of electric utility operations. This year alone, APPA will host more than 50 webinars on a variety of subjects, including NERC compliance, utility governance, pole attachment legislative updates, and dozens more. Thousands of member employees participate on APPA s webinars without ever leaving their desks.
RP 3 Program APPA started the Reliable Public Power Provider (RP 3 ) Program in 2005 to recognize public power s success in critical utility operations areas, which include reliability, safety, system improvement and work force development. To date 176 public power utilities have attained the RP 3 designation.
RP 3 Program Utilities that have undertaken the RP 3 process have discovered numerous benefits, including: improved teamwork and a better understanding of the important role all employees play; national recognition for being a safe and reliable system; community goodwill from customers who know their lights will stay on; cost savings on workers compensation and insurance; improved bond ratings; and, a final scorecard with best practice suggestions from a group of public power peers.
DEED Program Demonstration of Energy-Efficient Developments (DEED) program is the only research and development program funded by and for public power utilities. DEED encourages activities that promote energy innovation, improve efficiencies and lower costs of energy to public power customers. To date, DEED has awarded more than $9 million toward more than 500 innovative public power research projects. DEED members can apply for research grant money, student scholarships, and have full access to all DEED project reports. Grants Members may apply for funding for their innovative utility projects. Up to $75K/project. Student scholarships DEED will pay you to put a student to work at your utility. Ten, $4,000 student research grants/internships available annually. All project reports are available to DEED members online at PublicPower.org.
Hometown Connections The utility service subsidiary of APPA, Hometown Connections has saved APPA members more than $14 million on the purchase of electric utility-related products and services in the last decade. Members of APPA are eligible for discounts of up to 10% on Hometown s suite of products. Visit hometownconnections.com for a complete list of discounted-service offerings for APPA members.
Finding Value in APPA APPA affords its members an opportunity to stay informed about critical issues that impact public power at a fraction of the cost that they would incur by going it alone. APPA s advocacy at the federal level is essential for the continued success of public power. APPA provides tangible resources and services that improve the operations of its members.
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28 Thank You! Contact: Jeff Haas, VP of Membership & IT jhaas@publicpower.org; 202/467-2953