What is Public Power?
South Dakota’s Public Power utilities keep our state’s future bright. They’re one of three types of electric utilities available to our communities:
Community-owned, not-for-profit public power utilities keep homes, schools and businesses burning bright in more than 2,000 communities across the nation. Public power offers customers a safe and reliable power source that is generated or purchased from diverse sources.
Public Power does good things for our communities
Municipal electric utilities (public power utilities) are owned and operated by the people they serve, and all revenue is invested right back into the communities. Parks, pools, street lighting and other amenities are supplemented with electric revenue, the most profitable service a municipality provides.
Public power utilities do not serve stockholders and instead measure success by how much money stays within the community through low rates and contributions to the city budget. But their future is being threatened by other entities looking to meet their own expansion goals by pushing out smaller, locally owned utilities. Now more than ever, it’s important for public power utilities to stand together with the citizens they serve to ensure the future success of our South Dakota communities.
South Dakota Public Power Utilities Are:
– Not for profit
– Community owned and locally controlled
– Operated and paid for by the people they serve
– Invested in the local community
– Transparent, with open meetings where citizens can be heard
Nearly 1 in 7 South Dakotans are served by a municipal electric utility. Many of these providers are in small towns with populations under 2,000 and already serve a limited area.
Of the 77,000 square miles served by electric utilities in our state, only 90 are serviced by municipal utilities, making new customers through annexation and city growth important. And while other utilities in South Dakota are projected to grow 4-5%, municipal electric utilities are expected to grow by less than 1%.
THREATS TO PUBLIC POWER IN SOUTH DAKOTA
Public power does good things for our communities. But some entities with their own expansion goals are looking to push out smaller, locally owned utilities.
CURRENT LAW IN SOUTH DAKOTA
When cities expand, the customer (land developer) can request the municipality to annex service territory to deliver comprehensive services including water, sewer, roads and municipal electricity. Private electric utilities want to change current South Dakota law and take away the right of a growing city to serve the newly annexed territory.
While some may view annexation as “taking over” territory, that view couldn’t be further from the truth. Annexation is largely voluntary at the request of the developer or landowners because they want to be part of the municipality.
PROTECTING PUBLIC POWER
Cities already have limited growth opportunities within their current boundaries. A territory freeze would allow for monopolization of all new electric load by surrounding cooperatives and inhibit a city’s ability to grow by not allowing them to annex territory. This could, in turn, deter new businesses from locating in South Dakota and inhibit city growth by limiting the municipal’s ability to serve new load.
In addition, a municipal electric utility (also known as public power) is a city’s most profitable service. If communities lose their ability to annex and serve the area electrically, rates will increase in order to make up for lost revenue. Also, any new business locating within the city’s growing boundaries would be forced to take power from the cooperative, but the city would still be responsible for extending other services.
Without electric revenue to supplement these services, all other rates would increase, including property taxes. In addition, losing the ability to annex could hinder economic development, as a business may not want multiple providers or have time to figure out a territory swap.
In reality, annexation is good. The majority of annexations are bare ground with no current infrastructure in place, and public power utilities justly compensate the incumbent provider. Annexation is largely voluntary, as developers and landowners want to be part of the municipality.
TERRITORY FREEZES WOULD LEAD TO:
CHAMPIONS FOR PUBLIC POWER IN SOUTH DAKOTA
Ways to Support Public Power
There are many ways to support our efforts to inform and educate legislators and other community leaders.
You can write a letter to the editor in your local newspaper.
Here is a template to help get you started:
Support public power in South Dakota by keeping current laws to protect annexation and keep our communities growing. Talk to your neighbors, write a letter to the editor or share on social media to keep public power’s future bright in our state.
Contact us for more information.