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City of Pittsburg exploring possibility of public power utility

According to the U.S. Energy Information Administration, Kansas has a higher average retail price than the surrounding states (Missouri, Oklahoma, Colorado, and Nebraska).  

Among others, this was one of the reasons that the City of Pittsburg made the decision to start exploring the possibility of creating a public electric utility.  

According to city manager Daron Hall, the electricity rates have continually been increasing.  

“…Over the years, electricity is one of those things that has continued to catch our eye as increasing and the more we studied it, the more we realized that we have very little influence in reducing our costs and at the same time we have very little control over how its provided. There just seems to be a lot of new markets out there for electricity whether its renewables, whether its purchasing in shorter increments… and every time we approached the electric company and tried to have a discussion about any of our ideas, or just gain information, we usually came back with just a feeling of well they’re a monopoly and they’re gonna do what they’re gonna do and we’re just kind of stuck with it. And so, we thought we probably need to start studying what other communities are doing and what are our options and that’s really the path we’re on.”  

Chuck Caisley, senior vice president of marketing and public affairs at Westar Energy, hopes for Westar to continue being the electric service provider for the people of Pittsburg.  

“Well, I would start out by saying first that we are very proud to serve Pittsburg,” Caisley said. “We’ve got many employees that live in and around Pittsburg. We have facilities in Pittsburg. We want to continue to be the electric service provider for the city of Pittsburg and frankly we feel very strongly that we are better positioned to be the electric provider for the city. In terms of the city exploring municipalization, I think that that is well within their rights and something that we are trying to be transparent in giving them all the information they need to evaluate their options.”  

The city has been pondering the idea for a few years now and have been working to gather information on if this is plausible for Pittsburg and what it would cost.  

“…Our staff spent about three years meetings with various people at Westar and then in the industry. There’s 118 communities in Kansas that have their own municipal electric system. So, we studied some of those. We studied opportunities for microgrids and solar fields and just the technologies that are out there and eventually we put a feasibility study and we hired a team to come together and just say, ‘Okay, before we get too far down this road, is this feasible or is this just gonna be something that’s so expensive that we’ll never be able to afford?’ That was about a year ago and the results of that came back and were presented to the city commission… In theory with some practicality to it, (this) could be something the city can do so let’s continue down the path… The next step in that path is to literally sit down with Westar and start having discussions about how this could happen and based on our past experience with Westar, who is now Evergy, we were confident that we needed to assemble a team of experts and that included an attorney, some people that understood power supply, a firm that understood costing.., and some people that have some experience actually negotiating a municipalization of a… (utility). That team was approved by the city commission, contracts with those entities, and that’s who we have on our team right now. We are in the process of meeting with… Evergy and going through answering very difficult questions that will tell us whether this is feasible and practical in Pittsburg.”  

According to deputy city manager Jay Byers, a few things are needed before it can be determined if this is plausible or not. They need to know how much it would cost to purchase the utility, the grid, and the substations, how much it would be to purchase power elsewhere, and how much it would cost to do a severance and reintegration which means they have to have two different, independently operating systems that can function reliably and on their own and that is what they are working on.  

“…The electricity technology and the electricity markets are dramatically changing and when… you have an opportunity to create a brand-new utility, you want to take advantage of all those changes that are happening,” Byers said. “So, where people get their power from, how it’s generated, energy storage is a big deal now. Coal and nuclear are really not very competitive any longer which is a dramatic change from what used to happen and those companies that have invested heavily in those technologies are going to find it increasingly difficult to compete… If we get our power from Evergy, it’s whatever the monopoly says it is.”  

Hiring consultants, attorneys, a team of experts, and conducting studies all cost money.  

“The last firm number I had over the first four months, we’ve spent about $70,000,” Hall said. “So, it may not sound like a lot (or) it may sound like a lot. We’ve got a $50 million budget and we’re looking at possibly a $30, $40, $50 million purchase… It’s money well spent in my opinion…”  

There have been several meetings between the City of Pittsburg and Westar so far.  

“… We met with their CEO last week,” Hall said. “We continued to share information. The easiest way to think about it is… Westar’s over here on one side and we’re on the other side and we’re looking across the table at one another, trying to find common ground… It’s a difficult discussion. This is a company that is an investor owned utility, they’re a monopoly… We think we have the right, and I think they understand that we have the right, to purchase it. Anytime you are purchasing something from somebody, there’s a lot that goes into it. So, I appreciate them giving us the time to meet with… (them) and just hope that it continues to move forward.”  

According to Hall, the response to a crisis or natural disaster would not change much.  

“… There’s 118 cities just in Kansas that don’t have Westar that currently respond to major outages and there’s 10s of thousands of communities across the country that don’t have Westar’s employees,” Hall said. “It’s a myth to think that if you’re not with an investor owned utility, that there won’t be a major response to any major outage. That’s done through mutual aid agreements, it’s done all over the state and all over the country and we would be no different. If other communities, through those mutual aid agreements, if they had difficulty, we would respond to them and vice versa… And I’ve even been reassured by Westar that even if we weren’t with them.., they would respond to us as well… There are formal agreements set up regardless of what utility, whether its electric, gas, emergency management, those things go on all over. They’re common place and I’d hate for anybody in the community to believe for a second that we would somehow be in a worse position if we municipalized with respects to those mutual aid and major outages. It’s just not gonna happen. We would never do it if it was going to put us in jeopardy of the community. If anything, I think it may strengthen it because we are, if it happens, waiting on Westar to determine when they respond to us… Whereas if we have our own municipal utility, we will at least have some people and our own people to rely on. It’s a matter of control in a lot of ways and we do think that there’s some aspects where having local control over this important asset is a huge benefit for our community.”  

Public information manager Sarah Runyon, who sat in on the interviews with Byers and Hall, added that this also gives the City of Pittsburg a chance to look into renewable sources of power.  

“…Westar or Evergy has invested heavily in coal and nuclear power. Which is one of the reasons why the rates are so high. So, one of the benefits, looking at creating our own independent public power utility would be that we can buy power from someone other than Westar. We can buy power from renewable sources and we can buy it on the open market where those rates are tentative.” 

According to Caisley, most cities do not have municipal electric utilities and those that do have been established for several decades. 

“The first thing I would point out is that most municipal utilities were formed in really small towns, decades and decades ago,” Caisley said. “Most municipalities in the United State are not served by municipal utilities because of the cost and the complexity involved with running an electric utility. They’re very expensive to run and they are also very complex to run. Over the last decade or so, only a handful of municipalities in the United States have successfully municipalized and most of them have been cities that were under 10,000 citizens…”   

Westar is very active within the Pittsburg community and bring a lot of support to other businesses all while providing the city’s electricity and being ready to serve the citizens of Pittsburg if needed.  

“…You also have 5000 men and women who can be deployed to help Pittsburg if there should be a crisis of some kind right now from Kansas and Missouri, all within a couple of hours of Pittsburg,” Caisley said. “So, the size and the scale of the organization that we have is considerably bigger than what the city of Pittsburg would have and be able to do. So, I think that’s a major difference. Other than that, we are very invested in the city of Pittsburg. We are six figure investors in Block 22, we’re very active in economic development, and with other things in the town. Again, I think it’s something that they have to think about whether local control right there is worth the considerable complexity and cost that will occur if they try and municipalize.”  

There have been some questions about a survey that was sent out by Westar. The results were sent to Hall and Westar wanted to give everyone with the City of Pittsburg to look at the results before making them available to the public.  

Caisley said the meetings between Westar and the City of Pittsburg have been very, “friendly, very professional.”  

“…While we are 100 percent committed to staying the electric service provider of the city of Pittsburg and would like that to be the case, we are equally committed to giving the city of Pittsburg all of the information about municipalizing that they need in order to make an informed decision,” Caisley said. “So, we have given them information with respect to how much it would cost to purchase the assets that serve electricity to the citizens of Pittsburg. They would also be required to separate that system from the rest of the grid and the electrical system, and we’ve talked to them about the process and the cost for that. What we’re doing now is we’re in the mode of answering questions as they have them so they can fully evaluate their options and again make an informed decision.” 

Caisley hopes for a decision to be reached within the near future.  

“We remain committed to giving the City of Pittsburg all the information that they need and that we hope that sooner rather than later we can come to a decision from the city so that we can move forward and either start to renew our franchise there or if they’re going to start the process of municipalization, that we start that process. The average time to municipalize utility right now takes three to four years so hopefully the decision can be made relatively soon, and we can start down whichever path the city wants to go.”  

In an email statement, city commissioner Sarah Chenoweth said, “I support the idea of Public Power, in general. I do not believe that public utilities should be controlled by publicly traded, for-profit corporations–I believe people should have ownership over the electricity, water, etc. that they need to live full, healthy, modern lives. But I also know that every community is different, and we won’t know if this is the best fit for Pittsburg until we’ve gathered all the information, which is a frustratingly slow process, but it means we are doing our due diligence and taking our time to get this right before we present it to the people. What data we have so far overwhelming suggests municipalization is not only financially feasible, but in fact economically responsible. We have the highest electricity rates of any neighboring state, and very little control over the personal choice to generate home power–it’s hurting our citizens, restricting our freedom of choice, and limiting our growth. It’s a problem that must be solved.”  

The most important thing to city commissioner Chuck Munsell is that the citizens of Pittsburg be allowed to vote on this.  

“…So, I asked at every meeting if the citizens would be able to vote on this,” Munsell said. “I think that’s very important. A decision of this kind, of this cost, should go to the vote of the citizens. I’m the only commissioner that’s ever asked that question, every meeting that it comes up… The meeting of July 9.., we had an update on what was going with the municipality… once again I asked the question, will this go to the vote of the citizens? City Manager Hall went on the attack (and) said people need to stop listening to Chuck Munsell and quit praying that they will be allowed to vote on this, that that will be a decision made by the commission when we get to that point. The problem is, with that statement, I listen to the citizens. The citizens are the ones asking me if they will be allowed to vote on this, which they should be in my opinion. Citizens should be given information, both positive and negative, and that’s what I’ve asked for (at) every meeting I’ve ever been in… I don’t think that decision should go to five commissioners that hold temporary positions, whether that be a two-year (or) four-year term… That’s my stance on it… Also, the city, once we started talking about this, the city said this would go to the vote of the citizens which I’m very pleased with…”  

Cheryl Brooks, who is running for City Commission in November, said, “The public should have the right to determine their electrical options.”  

“…I mean Westar’s been in business for over 100 years, I’ve never had any problems with them personally,” Brooks said. “I just don’t know why it’s needed… To me it doesn’t make sense from a business standpoint. There’s a present system in place that has proven reliable. It’s been here for over 100 years and I’m just really… confused about that… I think people really need to understand all the aspects of it… You have to weigh the pros and cons and I’m very much for having both sides of the issue discussed because I think there is such a great amount that people don’t realize… I’m not wanting to switch… I’m just baffled by all of this and I’d really like to see it discussed thoroughly and definitely not jump right to conclusions but have all the facts.”  

Sidney Anselmi, owner of Audacious Boutique and Pittsburg resident, believes it’s good that the city is looking into a public electric utility.  

“I think it’s a good thing,” Anselmi said. “I, as a small business owner, it’s always important for me to explore every option to save money and cut costs in order to be sustainable. If it’s possible for us to save money by exploring this, then I’m all about it and I think the key there is it’s an exploration, it’s not a decision being made yet. It’s a lot into the possibility.”  

Knowing the changes that come with a public power utility is important, according to Anselmi.  

“… I think the important thing is it’s not matter of being for it or against it, I think it’s a matter of being willing to continue the study and to keep looking into the possibility because like I said, as a business owner, (the) number one thing I care about… (is) the cost,” Anselmi said. “The cost of doing business here is important to me otherwise my business wouldn’t be here… If the current rates that we get from Evergy are the best rates, then let’s keep them but if we can explore a municipal electric utility that will save us money, then I’m all about that.”  

Pitt State 2004 alumni Michael Fienen believes it is always a good idea to analyze the current policy and research other options.  

“I think it’s always good every so often to sit back and revisit and review decisions you’ve made in the past to see if there are better options on the table,” Fienen said. “Those options may not pan out, but at least you’ve taken the time to make sure that what you’ve always done still makes sense under the circumstances.”  

Fienen is also interested in knowing how this would affect the bills of customers.   

“I think what myself and a lot of people need to see as consumers is the bottom line which comes down to, I have a bill now and what would that bill be under a new plan?” Fienen said. “It is the change in that value weighted against how service may change. If costs go down 50 percent but the service suffers as a consequence of that, that’s something that has to be weighted. If costs go down 10 percent and service doesn’t change, is it worth the work to get that 10 percent. I think that’s what a lot of us are waiting on is to see how that math will play out.”  

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