APPA Report Details How Public Power Utilities Are Well Positioned To Manage Grid Of Future

October 5, 2021

by Paul Ciampoli
APPA News Director
October 5, 2021

A new report from the American Public Power Association details the many ways in which public power utilities are especially well-positioned to manage the grid of the future.

“Having already established superior metrics with regards to price and reliability, public power utilities also can take advantage of their relative small size and connectedness to the local community, as well as their regulatory flexibility and community focus, to develop programs and implement technologies that meet the needs of their customers and address the challenges presented by climate change,” the report, “Moving Public Power Forward,” notes.

The paper builds upon a 2018 APPA report, “The Value of the Grid,” which explored emerging trends and technologies and the potential disruption of the traditional electric utility business model.

Specifically, the new report looks more closely at the role public power utilities have already played in leading this energy transition, and to outline pathways for continued change.

The report was prepared by Paul Zummo, Director of Policy Research and Analysis at APPA.

It begins by exploring the latest developments, including emerging trends in electric vehicle development and research into hydrogen, as well as further development in state renewable portfolio standard (RPS) programs.

In addition, the report provides a statistical overview of public power, including statistics on generation capacity of power purchase agreements, reliability metrics, and rates data.

It also discusses public power and clean energy and provides examples of the many ways public power utilities are incorporating clean energy into their portfolios.

The report also discusses electrification and smart cities and provides examples of public power programs meant to incent electrification.

In addition, it includes a section that focuses on rates and business models, including case studies of public power experiences with new rate designs, such as time-of-use rates. There is also a discussion of partnerships and collaboration that help public power utilities manage this transition to the future grid.

The case studies presented in the paper “merely scratch the surface of what public power utilities are doing to guide their customers into the future,” the report notes.

Public power utilities are working to create more sustainable power systems by integrating more clean energy into their portfolios, encouraging adoption of electrified end-uses, and adapting their financial and business models to accommodate these changes.  “And true to the public power model, they are keeping their customers at the forefront when making these changes,” the paper said.

“These utilities are not doing it by themselves,” the report points out. “One common theme in nearly all the case studies provided here is collaboration. Public power utilities are collaborating with third party vendors, joint action agencies, and each other to study, develop, and bring online new technologies and programs.”

The regulatory regime under which public power utilities operate — governed by local boards and/or city councils rather than under the jurisdiction of state commissions — allows these utilities to make changes more quickly and more suitable for the needs and desires of their customers.

“Strikingly, these utilities are often making changes without being forced to do so by state mandates. Their customers – who, in effect, are their owners — are asking for these changes, and public power utilities are responding,” the report said.

“Public power utilities will travel different paths. Some may choose to outsource some key functions, while others will more actively engage in operation and control, including of DERs. Some may choose to serve as energy advisors to their customers, aiding them in their selection of resources appropriate to their needs. Whatever they choose, they will continue to demonstrate their value to the local community,” the paper said.

The report is available to download by clicking here.