The ‘New’ Munis on the Block

Customer service, energy storage, high-speed internet — California’s newest municipal utilities juggle a variety of challenges.

By John Egan

Mike McLellan, an electric utility program coordinator for Moreno Valley Electric Utility, staffs the utility’s booth at the city’s July 4 celebration.

Several municipal utilities were created amid historic changes in California’s electricity market after the state’s power crisis of 2000–2001.

In the 18 years since then, these publicly owned utilities have grown and changed with the times. But they have always been deeply rooted in their local community.

For these newer publicly owned utilities, going the extra mile has been an imperative from the beginning.

For instance, Corona Department of Water & Power General Manager Tom Moody recalled the utility changing out a distribution transformer a few months ago at a local movie cinema in the middle of the night. In some ways, it was simply business as usual.

When talking with the customer about scheduling the work, Moody learned the movie house went dark about 3 a.m. most nights. Tuesdays and Wednesdays during the summer, it opened early for $1 summer morning matinees. On those days, employees showed up at 8:30 a.m.

Could the utility’s workers change out the transformer between 3 a.m. and 8:30 a.m.? That would cause the least disruption to the customer’s operations.

No problem, cinema officials were told. Corona’s crew showed up at the appointed hour. About five hours later — when the theater’s employees arrived to begin popping corn, making slushies and warming up the movie equipment — electricity was flowing through a new transformer.

“As a publicly owned utility (POU), we are invested in our customers on a really close basis,” Moody told California Water & Power. “We can be more responsive to local concerns. We want to serve our customers in ways that are least impactful, and customers appreciate that. It’s really rewarding to have that kind of relationship with customers.”

Focusing on the local community is a shared theme among Corona Department of Water & Power, Moreno Valley Electric Utility (MVEU) and Rancho Cucamonga Municipal Utility (RCMU), which were launched by utilizing a state law allowing municipal utilities to be established to serve unincorporated greenfield areas within city limits and adjacent to the incumbent utility’s boundaries. Contrary to what some customers hear, these three utilities didn’t win a municipalization battle with the incumbent electricity provider.

That has sometimes led to enlightening conversations with residents who are not customers. At this summer’s July 4 event in Moreno Valley, several hundred city residents visited the utility’s booth. Only a few were customers, MVEU Division Manager Jeannette Olko said.

MVEU primarily serves the eastern and southern portions of the city.

“Because we share a service area with another electric utility, we’re always compared to that other utility,” Olko said.

One comparison is price. Olko said the Moreno Valley City Council adopted a policy of price parity with the neighboring electric utility so it did not economically disadvantage the city’s residents. The municipal utility differentiates itself from the next-door utility with exceptional service.

“We’re more flexible, more responsive and more efficient,” Olko said. “We turn around projects in a fraction of the time, and our reliability is higher.”

Similarly, Moody said there have been other memorable customer interactions. Throughout 2017, failing transmission infrastructure operated by Corona’s power delivery provider caused Corona’s 2,600 customers to endure 49 hours of cumulative outages. The utility convened a series of open houses to explain the problem and detail what was being done to fix it.

“Most customers just wanted to know we were working to fix the problem,” he said.

During those open houses, Moody explained to customers that the electricity that powers their lights and air conditioners is created at Hoover Dam, transmitted to the California Independent System Operator, then passed through an adjacent utility’s system before being delivered to Corona.

In other words, practically all aspects of the generation and transmission of the POU’s electricity were out of its control.

Like Corona and Moreno Valley, Rancho Cucamonga had for years been known as a bedroom community for Los Angeles and Southern California’s Inland Empire. But Fred Lyn, RCMU’s utilities division manager, said the city council wanted to change that by bringing high-quality jobs to the community.

“Why can’t we be the place where people live and work?” he asked rhetorically.

Using that mantra, a few years ago RCMU landed Evolution Fresh as a customer. The juice division of Starbucks brought about 200 well-paying jobs to the community.

RCMU positions itself as “we’re just like our neighboring investor-owned utility — only smaller and more responsive,” Lyn said.

Like all publicly owned utilities, RCMU keeps its customers’ money in the community, on Main Street, rather than shipping it off to investors on Wall Street.

“We like to say that investors don’t affect our decision making,” Lyn said.

RCMU is launching a fiber-optics master plan in partnership with Inyo Networks.

“We didn’t want to be in the retail broadband internet service provider business,” Lyn said, “but we had a lot of unused capacity on our fiber network.”

The offering is targeted to commercial customers, schools, colleges and hospitals.

Like POUs across the country, RCMU is getting into the fiber business because existing offerings from incumbent providers are too expensive or do not meet customers’ needs. The high-speed connectivity — which will offer download and upload speeds of up to 1 gigabyte per second for less than competitors charge — is part of long-term efforts to make Rancho Cucamonga a smart city, Lyn said.

This story originally appeared in the fall 2018 issue of CMUA’s magazine, California Water & Power. You can view the digital edition of the full magazine here.

The drive to form not-forprofit electric utilities and to offer competitive fast internet service stems from leaders’ commitment to providing essential services to their communities with no profit margin — a trait shared by all POUs. Driven by service rather than profit, leaders of municipal utilities serving the cities of Corona, Moreno Valley and Rancho Cucamonga look at the community’s needs to drive their business plans.

Their efforts are being recognized. MVEU has received the Excellence in Reliability certificate from the American Public Power Association three years in a row. The certificate honors members who significantly outperform the electric industry national average in reliability, as measured by length of outages in minutes.

Olko said her utility also is trying to establish itself as customers’ trusted energy adviser on solar power.

“Roughly 10 percent of our residential customers have rooftop solar installations,” she said. “A few warehouses have rooftop units as well. All told, there’s about 8 megawatts of customer-owned solar in our service area. Our peak load in 2017 was approximately 50 MW, so solar accounts for about 16 percent of our installed generating capacity.”

But solar doesn’t work equally well for all customers, Olko said. Customers receive a variety of solicitations from solar providers. She said the utility is trying to find a way to provide unbiased information that educates customers on the benefits and costs of rooftop solar.

“I attended a business event in my community recently, and one person said she was surprised that the manager of the utility was there talking to businesses and other members of the community,” Olko said. “I believe it is vital to the success of the utility and the city to personally meet the people we serve. These are our customers and neighbors. Their concerns are our concerns.”

John Egan is president of Egan Energy Communications. He can be reached at john@eganenergy.com.