A Deep Exploration into Public Power for Pittsburg
We want to build a brighter, stronger future for Pittsburg, one that gives our community even more opportunities for employment and enjoyment. One of the ways we’re doing that is by looking into public power.
Over the last two years the City has been exploring different electricity options. We are now working with experts in the field to conduct a detailed independent analysis of the feasibility and viability of bringing public power to Pittsburg.
Our initial study and extensive research highlighted some potential benefits of public power for our community and local businesses, including:
- Improved reliability, systems and service
- Savings on our bills
- Local control
- Energy options – we can buy power on the open market from renewable energy sources
- Job creation
- Boosting the local Pittsburg economy
What is public power?
Public power electric utilities are not-for-profit organizations which are run by your local government and owned by the community. In Pittsburg, we have three public utilities – water, stormwater, and sewer. We are looking at adding a fourth public utility, electricity. This business model is referred to as public power. For more information on what public power is and the benefits of public power click below.
What Made The City Think About Public Power?
The electric industry has changed. The cost of natural gas and renewable energy is now competitive with coal and nuclear, and local energy generation has become increasingly viable. This provides an opportunity for the City to choose the best-qualified power supplier with the best rates and to create a new utility controlled by the citizens of Pittsburg.
Additionally, a couple of years ago we noticed the City’s electricity costs increasing at a rate we could not sustain without introducing tax increases.
At the same time, we were speaking to businesses who were considering locating in Pittsburg, and high electricity rates were a deterrent to these businesses – our rates are higher than all our adjoining states.
Oklahoma rates are 27% lower than Kansas rates
Arkansas rates are 29% lower than Kansas rates
Missouri rates are 29% lower than Kansas rates
Kansas kilowatt per hour costs are significantly higher that nearby states and continue to increase.
There is even a movement dedicated to getting more affordable energy for Kansas. We have also had numerous enquiries from citizens about frequent rate increases and expressions of financial concern about the overall cost of electricity.
What Has The City Done So Far?
Over the last two years, we have met numerous times with our current provider, local stakeholders, large electricity users such as USD 250, Via Christi Hospital and Pittsburg State University, power suppliers, other communities in Kansas and potential partners.
These groups referred us to additional stakeholders who we’ve met with as we explored multiple paths looking at different electricity options that might improve reliability, stabilize costs and make Pittsburg a more attractive place for businesses and citizens.
We learned that Kansas state statutes provide a clear path to creating a public power utility. We also learned that if we create a public power utility we will be outside of the regulation of the Kansas Corporation Commission and will be able to purchase power from many different sources or generate power ourselves.
Based on the recommendation of local stakeholders, our City Commission and others, we finally undertook an feasibility study into public power.
The results of the feasibility study led us to take the next logical step and undertake an in-depth analysis of the option of public power on behalf of the citizens, businesses and industries of Pittsburg.
In March, 2019, the City Commission approved an investment to continue to explore the economic viability, benefits and risks of public power and outline the steps that will be necessary if a public power utility is to be established. As such, the City has engaged a qualified, experienced team to conduct negotiations and a detailed analysis of the technical, legal and financial aspects of creating a public power utility for Pittsburg.
This expert team consists of:
Duncan & Allen: Legal consultants who will represent the City in negotiations, contract work, and regulatory discussions.
GE Warren Associates: GE Warren Associates will act as client representative and review the public power analysis on an ongoing basis and use their expertise to support a power purchase agreement.
Baker Tilly: Accounting consultants with deep experience in utility work, and a particular focus on electricity. Baker Tilly will provide overall project management, conduct financial analysis, work on rate-setting, provide support for regulatory and power purchase work, and provide specialist asset-purchase advice.
Gilmore & Bell: As the City’s funding council, Gilmore & Bell will consult on how to fund the electric utility purchase and acquisition.
Daron Hall, Pittsburg City Manager, says, “We are following an expert recommendation on behalf of the citizens, businesses and industries of Pittsburg. The team we have engaged are specialists in their respective fields and we look forward to working closely with Evergy to create a win-win for everyone.”
Daron leads the team at the City working with these external partners. The City team also includes Jay Byers – Deputy City Manager; Henry Menghini – City Attorney; Jamie Clarkson – City Finance Director; and Dr. John Bailey – Special Projects Engineer.
Bringing a public power utility to Pittsburg is a crucial decision that could positively impact the whole community in both the short and long term, which is why this effort is such a critical part of the process and a worthwhile investment.
Even if the result of the analysis shows that public power isn’t a feasible option, the information uncovered will still be valuable. The City will then have the facts needed to make the best decision for the community, as well as potential alternative solutions and the negotiating advantage needed with the City’s electricity partner.
This team of energy consultants will conduct negotiations and the detailed analysis of technical, legal and financial aspects involved in creating a public power utility for Pittsburg.
This expert team, alongside external partners, will further explore and analyze the economic viability, benefits and risks of public power and answer the outstanding questions that we cannot answer ourselves. The team will also walk us through the steps that will be necessary if we choose to establish a public power utility, and provide projections of operational and financial needs into the future.
What If Public Power Isn’t an Option?
Even if we find that public power isn’t a feasible option, the information we uncover will still be valuable. That’s because we’ll have the facts we need to make the best decision for our community, as well as potential alternative solutions and the negotiating advantage we need with our electricity partner.
Looking at all the information and data we have gathered so far, we believe that bringing a public power utility to Pittsburg is a crucial decision that could positively impact our whole community in both the short and long term. We can take control of and improve our city’s economic growth, provide alternatives to our citizens, stabilize electricity costs for all households and businesses in Pittsburg, keep wealth in the community, and set the stage for a better future.
Is Public Power A Popular Option?
Public power is nothing new. In fact, America’s electricity utilities are about 60% public power, and they serve around 49 million people. 118 communities in Kansas like ours are already successfully powered by a public utility.
When it comes to reliability, these case studies show customers of public power utilities lose power less often, and are without power for less than 1 hour per year on average. We’ve created a page of information on public power with information and statistics provided by third parties including the American Public Power Association. Read to learn more.
For more information about public power in America, visit the American Public Power Association.