By: Erin Shen  

What is utility municipalization? This concept refers to the transfer of utility ownership from a privately owned corporation to public ownership by local communities. In the United States, most utilities, including electricity and water, are owned by private corporations. Think of paying your electricity bill, who are you paying? I pay mine to Xcel Energy each month, which is a privately owned utility company that provides energy to most of Minneapolis. As a privately owned corporation, Xcel Energy and other electric utility companies like it are first and foremost in the business of making money. This means that our needs as consumers, as well as the increasing need to adapt renewable energy methods, fall to the side, as profits are the top priority in this model. In order to best meet consumer needs and ensure equal and sustainable utilities, municipalization offers the solution to transfer ownership to the public. Public power utilities offer local control and commitment, public accountability, low rates, and responsive customer service to the communities they serve. The demands of the utility industry are constantly changing in order to best meet consumer needs, incorporate new technologies, adapt to increased government regulation, and utility workforce issues. These broad challenges affect the priority issues which impact utilities, including energy efficiency, demand response, distributed generation, and environmental protection decisions. As these challenges arise, a public power utility’s unique relationship with their customers in their own community allows them to best serve their customers’ interests and the long-term needs of their communities. 

The idea of utility municipalization is not a new concept. The Los Angeles Department of Water and Power has provided municipal utilities to the city of Los Angeles since 1917 and currently serves over 4 million residents. Cities like Boulder, Colorado and Deborah, Idaho have been pushing for utility municipalization in recent years, however, little change has occurred. So why is utility municipalization so difficult to adopt? Numerous obstacles, like the strength and scale of private energy companies, as well as the challenge of transferring ownership of large scale utility systems and management, have been the cause of utility municipalization failures in the past. Beyond the technical challenges of adopting municipalization, there is the challenge of public opinion and awareness regarding utility ownership and management. Prior to doing my own research, I had no idea what the concept of municipalization was. Even though as a consumer, I pay Xcel Energy monthly for my own utilities, I had never thought about what I could do to lower utility costs and provide more sustainable utilities for my community. I just accepted the fact that Xcel Energy provided utilities and the type of energy as well as the price was set by the company. The lack of public awareness and support for changes that offer new, more equitable solutions, like municipalization often leads to a lack of change.  

At the end of the day, each community must decide what is best for itself. Utility municipalization empowers local communities to take control of their energy systems and make decisions about their sources of energy. Local communities are much more invested in the source and consequences of energy production as they affect their own community, when compared to large private utility companies. Not only does municipalization offer members of the community transparency and accountability about their utilities, it also allows for more local-scale applications of renewable energy sources that would not be possible under private utility control. As the widespread use of renewable energy sources becomes more necessary, municipalization offers a method to empower local communities to enact change for a more sustainable future.