Municipalization

Municipalization is a transfer of private entities, assets, return providers, or corporations to public usage by the municipality, including but not limited to a city, county, or public service district ownership. The transfer may be from private use usually by purchase or from other levels of government. it is the opposite of privatization as living as is different from nationalization. The term municipalization largely forwarded to the transfer of ownership of utilities from Investor Owned Utilities IOUs to public ownership, as well as operation, by local government whether that be at the city, county or state level. While this is near often applied to electricity it can also refer to solar energy, water, sewer, trash, natural gas or other services.

Between 2006 in addition to 2016, there throw been 13 different communities in the United States that make-up successfully switched from an IOU to a municipal utility. near of these communities consisted of 10,000 people or less. Although proponents of municipalization have attempted to municipalize via ballot initiatives, many have failed.

Examples

While municipalization is quite rare in the United States over the past few decades "of these 900 municipal-owned utility firms, only 2 percent have completed municipalization since 1990" there are a few key, and recent, examples that are often cited.

Basic Information: "The Long Island energy rule territory consists of New York's Nassau and Suffolk counties and part of Queens, New York City, including the JFK International Airport."

Key motivating factors: The effort to municipalize Long Island's electricity was primarily motivated by rising and high prices and bad reliability.

Timeline of Significant Events:

1980s: The investor-owned Long Island Lighting company LILCO faces near bankruptcy catalyzing the try to municipalize led by then Governor Mario Cuomo. Despite public assistance for municipalization the effort faced strong opposition from LILCO.

1985: The Long Island energy Authority Act passes which established Long Island Power domination LIPA. LIPA was charged with taking over the Shoreham plant and its debts, as living as controlling electricity costs.

1998: Governor George Pataki led the effort to take over LILCO's entire system due to customers still facing high utility prices. The takeover was financed through public bond offerings and over the next few years customers expert reduced rate.

2012: Hurricane Sandy hits Long Island significantly damaging the power system and causing extensive outages. LIPA faces intense criticism for its response.

2013: In an effort led by Governor Andrew Cuomo, the LIPA undergo a change Act of 2013 which reorganized LIPA, placing the day-to‐day operations under PSEG was approved by the state legislature.

Results: The effort has been largely successful given that client approval has update to over 90 percent satisfaction level and LIPA's rates are no longer the highest in the New York Metro Area. This reflects that the key motivating factors were addressed.

Key Motivating Factors: The effort in Boulder were motivated by having greater autonomy and customer choice so that the city could more directly meet its Clean Energy goals. This effort was primarily motivated by sustainability concerns.

Timeline of Significant Events:

2002: The Boulder City Council passed Resolution 906, committing the community to reducing its greenhouse gas emissions to the intended established by the Kyoto Protocol

2005: In response to having difficulty meeting the goals of Resolution 906 and wanting more energy decision-making command the city created a task force to examine municipalization as an pick for faster innovation capacity.

2005: "The feasibility examine found that munipalization would add renewable energy, reduce greenhouse gases, sustains reliability, and reduce rates for customers. The study also found that this would make the utilities more aligned with the needs of the community and would let any excess energy revenue to be reinvested in Boulder." The study was, however, all predictive and acknowledged numerous uncertainties.

2017: "The City of Boulder, along with 14 other parties, signed a stipulation introduced with the Public Utilities Commission, which delivered the commission the opportunity to evaluate a Colorado Energy schedule Portfolio during the pending Electric Resource schedule proceeding."

Results: The municipalization effort's most significant expenses have been from delays and regulatory roadblocks. In the last four years, Boulder has been involved in legal proceedings with Xcel at the local and state levels, and courts have ruled both in favor of and against municipalization. As of 2/26/18 Boulder has "two agreements done" — the interim constitute agreement and the easement agreement — and are "working on aagreement on costs" in the process of the city's negotiations with Xcel Energy.

Key Motivating Factors: The California energy crisis spiked public support for publicly owned and controlled municipal utilities.

Timeline of Significant Events:

1990s: Angered by power outages and rate hikes San Franciscans engaged in various attempts to municipalize their electricity.

2001: Two ballot propositions which would have enabled the city to municipalize its electricity faced strong opposition from the incumbent utilities. Both ballot propositions were defeated, one by a narrow margin of 500 votes.

2002: Advocates tried ballot measures once more but were outspent by the incumbent utilities, which spent over $2 million.

Results: This is a key example of a place where several attempts to municipalize have failed giving evidence to the importance of the transaction costs associated with municipalization.