18 March 2013 –While Australian governments in areas ravaged by severe weather events, such as Queensland, roll back sustainability programs, local councils  in the US are taking advantage of their tax and lower salary structures to buy up electricity business so they can lower greenhouse emissions and ensure resilience from climate change.

Boulder, Colorado, Minneapolis, Santa Fe and Massachusetts are all moving in this direction, a recent article in The New York Times has revealed

At Boulder, residents have voted to raise taxes to pay for taking over the electricity company that has stalled on its reforms to meet the town’s environmental goals.

“Right now, a lot of the communities are looking at it for climate reasons,” said Ursula Schryver, director of education and customer programs at the American Public Power Association. “The biggest benefit about public power is the local control.”

But private utilities often resist giving up control — and customers — to new, public competitors, arguing that it leaves them unable to recoup investments made in anticipation of customer needs. In addition, the power industry cites its experience and long history in keeping the lights on while meeting environmental goals.

“This is our business. It’s what we do,” said David Eves, chief executive of the Public Service Company of Colorado, the division of Xcel Energy operating in Boulder. And because its parent company operates in eight states, he added, the utility can focus on being more efficient. “We don’t run other parts of the city operation and deal with those kinds of things. It’s our specialty.”

Roughly 70 percent of the nation’s homes are powered through private, investor-owned utilities, which are allowed to earn a set profit on their investments, normally through the rates they charge customers. But government-owned utilities, most of them formed 50 to 100 years ago, are nonprofit entities that do not answer to shareholders.

They have access to tax-exempt financing for their projects, they do not pay federal income tax and they tend to pay their executives salaries that are on par with government levels, rather than higher corporate rates.

That financial structure can help municipal utilities supply cheaper electricity. According to data from the federal Energy Information Administration, municipal utilities over all offer cheaper residential electricity than private ones — not including electric cooperatives, federal utilities or power marketers — a difference that holds true in 32 of the 48 states where both exist.

In addition, they can plow more of their revenue back into maintenance and prevention, which can result in more reliable service and faster restorations after power failures.

In Massachusetts after Hurricane Irene in 2011, for instance, municipal utilities in some of the hardest-hit areas were able to restore power in one or two days, while investor-owned companies like NStar and National Grid took roughly a week for some customers. According to an advocacy group called Massachusetts Alliance for Municipal Electric Choice, government-owned utilities on average employ more linemen per 10,000 customers than the private companies.

See also:

  • Anne Butterfield says in The Huffington Postwho says  the issue is also about
    • concerns about “whether it’s tolerable that decisions made by monopolies are made chiefly for shareholder profit when deadly costs are being externalized.
    • and Big utilities that are  “too big to fail”  being monopolies that are insulated from the risks of their undertakings, be they the chanciness of a big nuclear plant investment… or the systemic risk of spewing fossil-fuel emissions for over a century resulting in the recent uptick in unprecedented deadly storms, or the straight-up investment risk of relying on coal supplies that are nowhere near as stout as proclaimed.
  • What the City of Boulder says about the issue
  • our article on Queensland Premier Campbell Newman’s destruction of green programs.
  • Green MashUP: Queensland’s amazing environment…going, going, gone, to the man with the rampage

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