consultants are sandburs

Wednesday, July 24, 2013

The successful Fridley businessman can rail about taxation. Why no barking about private sector services pricing? Is it only governmental hate, or a true and consistent dislike of waste and over-pricing? It seems proper to question any watchdog that appears blind in one eye (and not seeing that well out the other).


The term "genco" is used in current electricity utility operations for a company competing (at least ostensibly competing) in the generating segment, as distinct from operation of transmission lines, or pricing and selling power at retail, via distribution grids routing power to end use customers. As an example of current practice in Anoka County, Great River is a cooperative genco, supplying cooperatives that distribute power, with Connexus being the largest Great River wholesale customer.

As something getting no discernible barking as inverse-privatization, Elk River dumped Great River, that being how the business flow was reported a bit over a month ago. Reporting by Strib opened:

Great River Energy, the state’s second-largest electric supplier whose rising wholesale rates have come under fire, is losing a large customer that decided it could purchase cleaner, cheaper electricity elsewhere.

Elk River Municipal Utilities, which for decades has relied on Great River Energy to generate electricity for its customers, said it has signed a deal to obtain future power from the Minnesota Municipal Power Agency (MMPA) owned by 11 municipal power companies.

Troy Adams, general manager of the Elk River utility, said Great River’s rising wholesale rates — up 58 percent since 2006 — are the main reason for making the switch, which takes effect in 2018.

“The No. 1 driving reason is we want to remain competitive, and wholesale power rates are 75 percent of our costs,” Adams said in an interview.

It is the latest sign of discontent among customers of the Maple Grove-based wholesale power cooperative, which is owned by 28 local co-ops that serve 645,000 homes and businesses across the state. Two ethanol producers recently complained to state regulators that Great River has invested in questionable projects, including a new coal-fired power plant, that drove up rates.

Great River Energy has denied that its wholesale rates are out of line with other utilities in the region, and last week, its CEO, David Saggau, said at the co-op’s annual meeting that he expects no rate hike in 2014. Unlike investor-owned utilities, whose rates are set by state regulators, most co-ops can legally set rates on their own.

Elk River Municipal Utilities, which has nearly 10,000 customers, purchases about 2 percent of the power Great River generates at times of peak demand in the summer.

Adams said the Elk River utility was concerned about Great River’s heavy reliance on coal to generate power. [...]

... but blind, in the left eye ...
Government stepping in to protect citizens from exploitation should get favorable barking, if one's premise is that a consistent watchdog would be critical of private sector price gouging, as no different in kind from excessive taxation.

Not so?

Do your own web searching to form your own opinion.

Elk River is a small fish electricity market, compared to Minneapolis, with Strib reporting online yesterday of Minneapolis considering a parallel shift to inverse-privatization:

Minneapolis Energy Options has been advocating for the city to explore taking over the electric and natural gas services as longtime franchise agreements are set to expire next year with Xcel Energy and CenterPoint. The coalition has described that as one of a range of possibilities to help the city meet its renewable energy goals and reduce greenhouse gas emissions 30 percent by 2025. While council members have voiced caution about taking such a dramatic step, some say putting municipalization on the table will give the city crucial leverage in its negotiation with the utility companies.

CenterPoint was “very interested in avoiding the municipalization fight and in order to do so, they wanted to meet the goals of [our] campaign,” said Dylan Kesti, campaign coordinator of Minneapolis Energy Options.

He said that the organization is also willing to sit down with Xcel, which it wants to produce more solar and wind energy and improve the electric grid.

So, where are all of Ramsey's fiscal conservatives, on the question of whether and how Ramsey can get a better deal for citizen ratepayers than the one Connexus provides?

In hiding, still navel-gazing over the last election results?

Ramsey council members and staff; with this data center task force thing pending there is no time like the present to look beyond that at the bigger picture, i.e.:

What's Connexus done for us lately?

Or would you rather just sit there paying a premium to Connexus - Great River, on the basis of some half-baked propaganda extolling private sector virtues, independent of what actual facts might be?

Is it not time for Ramsey to progressively get aboard the process, to see what options are, with the question being whether we can get a better service package and better rates elsewhere than from Connexus, vs any worry about why?

With Connexus not answerable to the PUC due to statutory exemption for cooperatives; who's watching for excessive spending, top down, CEO and board duties vs salary levels, and such, all the way down to the lower levels of the totem pole?

It is a situation over-ripe for decent due diligence fact finding.

For the benefit of you, me, and Ben Dover.

More Strib, on Minneapolis deliberations over dumping Xcel and Center Point in favor of a municipal owned utility setup. Here and here.

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