the road ahead for public power pennsylvania municipal electric association annual conference...
TRANSCRIPT
The Road Ahead for Public Power
Pennsylvania Municipal Electric Association Annual ConferenceOctober 15, 2015
Jeff HaasVice President of Membership & IT
American Public Power Association (APPA)
What We’ll Cover
• APPA overview• Major challenges confronting Public Power• Where the opportunities lie• Resources available through APPA
About APPA
• 1408 regular utility members• Very large members (LADWP – 1.5 million
meters) and very small members (Orlando, OK – 90 meters)
• > 50% serve less than 5,000 meters• APPA members serve more than 40 million
customers• 32 members in Pennsylvania
How Pennsylvania compares…
Nationally - # of customers served by public power utilities• Mean: 11,339• Median: 1,898Pennsylvania - # of customers served by public power utilities• Mean: 2,436• Median: 1,812m
Changes on the Horizon
• Drivers for change in the electric utility industry include:– Increased regulations– Rapidly advancing technologies– Evolving customer expectations•To help our members address these changes,
APPA developed a Strategic Plan that was approved by its Board in June 2015
Changes on the Horizon
“Almost no other industry is currently undergoing such dynamic change as the energy sector…The success of this transformation of the energy industry will be decided at the local level.”
Peter Terium, CEO, RWE (one of Europe’s largest utilities)
Industry Challenges
• Increased regulations• Rapid technology advancements• Evolving customer expectations• Workforce challenges
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Increased Regulations
• The electric utility industry is facing stiff environmental regulations, including regulations to address CO2 emissions from new and existing power plants under the Clean Air Act
• Final rule regulating CO2 emissions for existing power plants under section 111 (d) of the CAA was issued on August 3, 2015
• Calls for 32% reductions in CO2 emissions from 2005 levels by 2030
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Increased Regulations
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Increased Regulations
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Source: NERC study of Clean Power Plan reliability impacts.
Rapid Technology Advancements
• Increased Distributed Generation• Potential for energy storage• Behind-the-meter technologies• Distribution system automation
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Rapid Technology Advancements
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Rapid Technology Advancements
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Rapid Technology Advancements
Energy storage
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Rapid Technology Advancements
Increased Distributed Generation/Energy Efficiency
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Rapid Technology Advancements
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Evolving Customer Expectations
Electric utility customers will want…
• to be informed• options• assistance from trusted source
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Evolving Customer Expectations
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Work Force Issues
• Retirements• Generational differences• Diversity• Talent gap• Compensation
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Work Force Issues
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Utilities
Forestry, fishing and hunting
Public administration
Mining
Transportation and warehousing
Manufacturing
Education services
Hospitals
Insurance
Membership associations
Health care services (except hospitals)
Wholesale trade
Retail sales
0 10 20 30 40 50 60 70
Baby boomers as a % of total employment
Percent
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Assessing the Sustainability of Public Power’s Business Model
IOUs = Shareholder Value
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Value Proposition
Share price appreciation
Return on equity
Customer Service
Public Power = Ownership Value
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Value Proposition
Price / Cost
Reliability
Service Convenience
Local Ownership
Local Control
Public Power’s Advantages
1. Public ownership – value to citizen-owners
2. Local control – local regulation
3. Low-cost structure – tax-exempt financing, strong credit ratings, lower-cost operations
4. Non-profit motive – no distribution of dividends, conflict between shareholders and customers
5. Primary focus on customers – meet customer needs; deliver customer value
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Communicate the Value of Public Power
• Be proactive in your communications
• Maintain good relationships with local elected officials
• Build goodwill and engage stakeholders
• Educate employees about the value of public power
• Emphasize long-term benefits of ownership
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APPA Member Resources
• Advocacy at the federal level• APPA Academy• Information resources
– PublicPower.org– Public Power magazine, Public Power Daily & Weekly– More than two dozen active discussion forums– APPA Product Store
• Utility programs (RP3, DEED, eReliability Tracker)
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Public power has a great opportunity if we stay true to
our ideals and roots while adapting our mindsets and services to this new era
