The Benefits of Municipal Utilities

 
   
   

Kansas is home to municipal utilities of all shapes and sizes. There are 119 municipal electric utilities, 61 municipal gas utilities, and hundreds of municipal water and wastewater systems across the state. In fact, Kansas has more municipal utilities than nearly any other state. Kansas Municipal Utilities (KMU) represents 172 of these cities and communities that have decided that municipal utilities are the best choice for providing electricity, natural gas, water, sewer and telecommunications needs.

Kansas has a long history of municipal utility operation. When private business would not or could not serve the utility needs of its citizens, city governments stepped up to provide essential utility needs – electric, gas, water, wastewater, stormwater, and telecommunication services. These community-owned utilities are municipal by choice.

The benefits of municipal utility ownership are many. From small, rural towns to large metropolitan cities, municipal utilities are the culmination of that particular American ideal of local people working together to meet local needs.

Community Ownership
A municipal utility is owned by the city it serves. It exists to provide a public service to the citizens, businesses and industries of the community. Service, not profit, is the utility’s mission.

Long-Term Community Goals
The emphasis for municipal utilities is helping to achieve the long-term goals of the community. The primary mission of providing the least-cost and most reliable service over maximizing profit ensures that these goals are always in sight.

Local Control
Because of local control, Kansas cities with municipal utilities determine how utility services are provided within their community. This includes the design and aesthetics of electric distribution systems, natural gas infrastructure, water treatment plants and water towers, and wastewater treatment plants. Local control means matching local resources to local needs and offering special programs (energy efficiency & conservation, economic development incentives, etc.) to benefit citizens.

Local Regulation
For municipal utilities, rates and services are governed by the city itself. Utilities are commonly governed by either a city council or city commission or an appointed or elected utility board. The utility is governed by residents of the community who are customers of the utility and are thoroughly familiar with its operations and services.

Local Presence
Municipal utilities are located in the community and are readily available to customers. If a customer has a complaint, he or she doesn't have to take it to a state agency in Topeka or corporate headquarters in another city. The customer can discuss the problem locally, with another member of the community, and be assured that the problem will be addressed.

Reliability
With electric, gas, water & sewer crews located within the community, citizens benefit from a quick and effective local response to emergency situations and outages.

The Public Interest
A municipal utility is operated in the public interest, for the benefit of the residents of the city. They are not operated for the benefit of stockholders who may live hundreds of miles away and have little interest in the community. With private utility ownership, there is often conflict between the interests of customers and the interests of the stockholders. This disparity of interests has given rise to a complex system of regulation of private utilities that is unnecessary when the utility is publicly owned and operated for the benefit of the community it serves.

Keeping Dollars in the Community
There are numerous ways that a municipal utility helps to maintain and improve a sound local economy:
• Municipal utilities make significant contributions and payments-in-lieu-of-taxes to the city. These payments are similar, and often much greater to the tax payments that would be made by a private utility.
• Local ownership means that customers' utility dollars stay in the community, creating jobs and supporting the local economy.
• Local employment
• Municipal utilities serve as an engine for economic development. Local flexibility, reliability and quality service offered by municipal utilities are a major advantage for the community in attracting and retaining commercial and industrial customers.
• Access to tax-exempt financing for capital projects
• On average, municipal utility rates are competitive with those of other utilities. Competitive rates mean that more dollars are available to spend on other goods and services, boosting the local economy.

Community Values
Decisions about the operation of a municipal utility are made locally, by members of the community, at open, public meetings. Because all decisions are made locally, a municipal utility is uniquely able to respond to the community's needs, build on the community's strengths, and reflect and advance the community's values.

Integrated Utility Systems
In most cases, municipal utilities are integrated across many services. The electric or gas utility may work with the city’s water, sewer, garbage, cable or telecommunication systems. The efficiency of local governments are enhanced through the sharing of personnel, equipment and supplies across numerous utilities and city departments.

Private Utility “Yardstick”
Municipal utilities are a strong competitive force that provides a “yardstick” for consumers and regulators to measure the performance and rates of private utilities. This continuous competitive standard benefits not only the customers of municipal utilities but all utility customers across Kansas.

 

 














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