Xcel, TVA and the Trouble with Relationships
- Mar 20, 2021 3:59 am GMT
Utilities are in a precarious situation. They provide more than a service, they provide a basic human need. However, customers have a choice. They can take advantage of the service you provide or band together and seek power elsewhere. Expressing commitment to partners and customers creates loyalty but doing nothing could cost you.
After a decade of trying to separate from privately-owned energy company Xcel, the City of Boulder is looking for ways to work with the utility company. "We spent nearly 10 years in an adversarial relationship with Xcel so the partnership was built recognizing that reality…” said, Jonathan Koehn, Boulder's interim director of climate initiatives. Voters agreed to put plans for a municipal electric utility on hold and approved a 20-year agreement with Xcel Energy. The city and the utility are still waiting on Colorado Public Utilities Commission to adopt the franchise agreement. Open communication lead to the settlement. Xcel Colorado President Alice Jackson recalls, “I simply posed the question and I said, ‘OK, you’ve now heard how we approach distribution planning. If we were able to find a pathway to get you more comfortable with the decentralization conversation, we’re obviously making dramatic moves on the decarbonization side and that’ll be taking place at the Public Utilities Commission, should we open the door to having a conversation on how do we do this together again?’” Together the two entities will work toward common goals like, 100% renewable energy by 2030, upgrading streetlights, moving lines underground and continuing good communication. Because of their history, the city included a provision to ‘opt out’ of the agreement if they determine the utility is not meeting certain benchmarks. If goals are met, Xcel Energy will be able to demonstrate their level of commitment.
The City of Memphis is facing a similar challenge with relationships. Memphis City Council has decided or should I say, has not decided, on whether or not to stay with Tennessee Vally Authority (TVA). The Council is delaying a vote on approving a contract that would bid out Memphis, Light Gas and Water’s (MLGW) electricity supply and suspend leaving TVA for the time being. MLGW is the nation’s largest three-service municipal utility and is supplied with electricity by TVA on a nonprofit basis. MLGW is TVA's largest customer, representing 11% of TVA's total load so all parties involved understand the weight of potential change. Mark Yates, West Region Vice President for TVA expressed commitment to the people of Memphis and spoke out about the utility’s preparedness for last month’s extreme weather. He stated, on their website, that 'severe weather requires preparation, planning, and resources. TVA and its partner, MLGW, plan for events like the low temperatures experienced last month. TVA has invested billions of dollars in our generation and transmission assets in the last decade. We can call on any and all of these resources at any time.’ Regarding the process on whether to stay or leave TVA, Memphis Mayor Jim Strickland said, "The check-in would be to determine if an exit from TVA is feasible, and a majority vote would be required of both boards to move forward.” He continued, "I believe that our common goal is to provide the public with the most reliable service at the best possible price.” He concluded that compromise may be necessary to reach a common goal.
What relationships will your utility acquire? How will you maintain open communication and demonstrate your commitment to common goals?
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