News & Insights

Power Agency Management: Successfully Managing a Municipal Power Agency

Managing a municipal power agency can be challenging. Whether a project agency or an all-requirements agency, the diversity of members can lead to conflict if not managed well. Here are some pathways to support success for newly-formed agencies and well-established organizations alike.

Keep Interests Aligned

Maintaining common interests among members is the single most critical thing a municipal power agency can to do to promote success. There are many ways in which interests can easily diverge – smaller vs. larger cities, suburban vs. rural, members with generation vs. members without generation. It is vitally important that a municipal power agency promote governance practices, policies, and rate structures that keep members’ interests aligned.

Stay Focused on Mission

It can be tempting for a municipal power agency to want to branch off and provide various services to members. While some amount of support services makes sense to ensure members’ success, we’ve found that staying focused on the core mission of the agency – typically power supply planning, sound financial management, and effective rate structures – results in success in the form of competitive rates and strategic focus. The clarity that results from being mission-oriented leads to more productive Board meetings, policy discussions, and decisions.

Promote Economic Development

A wholesale supplier with competitive electric rates can be a key differentiator in a city’s economic development efforts. A collaborative relationship between the power agency and its member cities can help members land prospective businesses that grow both the city and the power agency. The municipal power agency can support economic development through innovative rate structures. In an era where load growth can no longer be taken for granted in many parts of the country, a strong partnership between the power agency and its members regarding economic development is critical.

Maintain Flexibility

Successful power agencies maintain flexibility – in strategic planning, decision making, and execution. In a rapidly-changing technological environment – this flexibility is more important than ever. Both management and governance must be able to change direction when a given approach or program is not successful. Because of the nature of their governance, municipal power agencies and utilities can often react faster to industry changes than an investor owned utility – this can be a significant strategic advantage.

— David Niles, Vice President, Avant Energy, Inc.