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L E X A N D R I A
The Benefits of a Municipally Owned Utility
EXECUTIVE SUMMARY
The ALP Utilities Municipal Power Advantage® (MPA) report outlines the benefits of operating a municipally owned electric utility. The electric utility provides customer benefits and supports the community in ways beyond providing reliable electricity. Some benefits have positive financial impacts while others, less easily measured, still add value to the community.
The ALP business model exemplifies public power benefits that demonstrate the value of ALP as an outstanding asset to the community. These benefits include:
MORE AFFORDABLE: ALP’s customers enjoy electric rates up to 27% lower than the average rates of rural electric cooperatives (RECs) and investor-owned utilities (IOUs), depending on their customer class. This cost advantage is due to lower wholesale power costs in the region, taxexempt financing and the utility’s not-for-profit status, which reinvests in the local system.
From 2020-2023, ALP transferred payments of over $3.9 million (an average of 3.6% of annual electric revenues) to the City of Alexandria. These payments in lieu of taxes help pay for expenses typically funded through sales tax, property tax and other fees.
MORE RELIABLE: ALP consistently provides a high level of reliability to its customers. Based on nationally recognized measurements, ALP customers can expect power 99.999% of the time. In recognition of ALP’s reliable electric service, the American Public Power Association (APPA) awarded the utility the Certificate of Excellence in Reliability in 2023 for its exceptional reliability from 2018-2022. In addition, ALP is recognized by APPA as a Diamond Reliable Public Power Provider (RP3).
COMMUNITY AND ECONOMIC IMPACT: ALP offers economic development discounted rates for qualifying loads, provides energy efficiency rebates and extends utility services for potential development. In addition, the dollar value of utility staff salaries and purchases from local businesses are recirculated multiple times throughout Alexandria, which contributes to a healthy local economy.
LOCAL CONTROL AND SERVICE: ALP is a community-owned utility governed by a local utility board, and the customers are its owners. Additionally, ALP employs local citizens to work at the utility and operate the system. The staff serve customers who are also family, friends and neighbors.
ALP is part of a mutual-aid network of public power communities nationwide. If a major storm causes widespread power outages, these communities work together to restore power quickly and efficiently.
DIVERSE POWER SUPPLY PORTFOLIO
MORE AFFORDABLE
MORE RELIABLE
COMMUNITY AND ECONOMIC IMPACT
LOCAL CONTROL AND SERVICE
As a public power utility, ALP supplies electricity to residents and businesses in Alexandria. The utility prides itself on providing reliable electric service with affordable rates, local control and exceptional customer service. ALP also provides water to homes and businesses in the community.
Going above and beyond to improve the communities we serve through
ALP is one of approximately 2,000 community-owned electric utilities in the U.S. that serve more than 54 million Americans.
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CUSTOMERS IN THE U.S. ARE SERVED BY PUBLIC POWER
In a community served by a municipally owned utility, customers are the owners who have local representation. ALP is governed by a five-member Board of Public Utilities. The Alexandria Board of Public Utilities establishes rates for consumers and is the policy-making entity that regulates utility operations.
ALP’S POWER SUPPLY
ALP’s power supply is provided by the Western Area Power Administration (WAPA) and Missouri River Energy Services (MRES). ALP has a power supply contract with WAPA that extends until the end of 2050. The utility also has a supplemental power supply contract with MRES that is secured through 2056.
WAPA supplied ALP with 33% of the utility’s energy requirements in 2023.
A DIVERSE POWER SUPPLY
The electricity ALP purchases from WAPA is clean, renewable, reliable hydropower from dams on the Missouri River. The supplemental power supplied by MRES helps reduce risk through diversity in fuel source and geographic location, and focuses on environmental stewardship by developing renewable and carbon-free resources.
* This chart does not represent environmental attributes associated with the power supply mix, and no environmental claim is made by this chart.
ALP′S POWER SUPPLY MIX
ALP actively participates in the Bright Energy Solutions® (BES) program offered by MRES, which offers cash rebates for residential and commercial customers when they purchase new, energy-efficient equipment. When this equipment is installed, ALP reduces the wholesale demand and energy purchases from MRES, saving customers money.
From 2008 through 2024, ALP saved over 63 million kWh, which includes 3.2% distribution line losses, and about 13,000 kilowatts (kW) in cumulative on-peak demand savings
Based on the Environmental Protection Agency’s greenhouse gas calculator, this is the equivalent of the electricity used in about 8,900 homes annually.
ALP CUSTOMERS RECEIVED ABOUT $ 3.5 M THROUGH REBATES OFFERED BY BES.
*2008 -2024
MORE AFFORDABLE
WHOLESALE POWER SAVINGS
ALP and its customers pay lower wholesale power supply and transmission costs than the average per kilowatt-hour (kWh) of other regional wholesale suppliers.
As shown below, ALP’s blended power supply and transmission cost in 2023 was 5.9 cents per (kWh), which is represented by the red bar. The average wholesale composite rate of 20 area power suppliers was 7.6 cents per kWh (red bar), which is about 26% higher than ALP’s cost, or a difference of 1.7 cents per kWh.
WHOLESALE POWER SAVINGS
ALP purchased over 293 million kWh from WAPA and MRES in 2023. The utility saved about $5 million in wholesale power costs when compared to the average rates of other utilities in the region. This cost savings reflects the WAPA allocation and purchases from MRES, which is calculated by multiplying the total purchased kWh (293,271,263) by the savings rate of 1.7 cents per kWh.
Because ALP is a not-for-profit utility, it passes these wholesale savings on to customers.
ADDITIONAL ONE-TIME BENEFIT
In 2020, the MRES Board of Directors approved a one-time refund for 10% of its members’ power supply bills from August 2019 to July 2020. ALP received over $1.13 million from the refund. Additionally, MRES secured a settlement from the Federal Energy Regulatory Commission, which gave ALP nearly $378,000 as part of a transmission refund. The combined refunds of over $1.5 million benefited all customers in the community.
CUSTOMER SAVINGS
A residential customer using an average of 750 kWh per month will save an estimated $32 monthly on their electric bill in 2024 compared to regional REC and IOU customers. Commercial customers using an average of 2,000 kWh per month will save $65 monthly, and larger users like manufacturers can save thousands of dollars each month.
TRANSFER TO THE CITY’S GENERAL FUND
ALP transferred an average of 3.6% of its electric operating revenue to the City from 2020-2023 as a pass-through franchise fee known as payment in lieu of taxes. This average transfer totaled around $986,000 annually.
The cost of replacing all or a portion of the transfer from the electric utility to the City would likely result in an increase of other local taxes collected by the City, such as sales and property taxes, or an increase in service fees.
DONATED CASH AND SERVICES TO THE CITY AND COMMUNITY AVERAGED
ALP’s TRANSFER TO THE CITY AND THE TRANSFER AS A PERCENTAGE OF REVENUE
ACCESS TO TAX-EXEMPT FINANCING
ALP can access tax-exempt financing, which typically carries reduced interest rates. This results in lower borrowing costs, depending on the credit quality of the borrowing utility. Tax-exempt bonds issued by utilities usually finance large infrastructure or generation projects that increase reliability and safety, among other benefits.
ALP AWARDED APPA’S 2023 CERTIFICATE OF EXCELLENCE IN RELIABILITY
MORE RELIABLE
A utility customer’s number one priority is reliability, and ALP has a strong record of maintaining an electric system that operates continuously and efficiently. Based on nationally recognized measurements, ALP customers can expect power 99.999% of the time. What does this mean for customers? It translates to fewer than 10 minutes of total outages per year, excluding major events.
In recognition of Alexandria’s reliable electric service, APPA awarded ALP the 2023 Excellence in Reliability Certificate for its exceptional outage metrics from 2018-2022.
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AVERAGE OUTAGE TIME FOR ELECTRICITY CUSTOMERS PER YEAR*
*WITHOUT MAJOR EVENTS 2021-2023
Data sources: https://reliability.publicpower.org/ and https://www.eia.gov/electricity/data/eia861/
ALP crews maintain the utility’s distribution system to improve efficiency, enhance safety and increase the lifespan of ALP’s equipment. Some of the annual maintenance tasks are:
u System upgrades including strategic undergrounding of distribution system
u Trimming trees and other vegetation under powerlines
u Inspecting circuits and transmission lines
UTILITY NOTEWORTHY DISTINCTIONS
ALP has earned a Diamond RP3 designation from APPA, to showcase the operational excellence of the utility. This program is based on industryrecognized leading practices in four critical disciplines:
u Reliability
u Safety
u Workforce Development
u System Improvement
An RP3 designation signifies a utility’s dedication to operating an efficient, safe and reliable distribution system. Receiving the RP demonstrates to community leaders, governing board members, suppliers and service providers a utility’s commitment to its employees, customers and community. Currently, 254 of the nation’s more than 2,000 public power utilities hold an RP3 designation.
COMMUNITY AND ECONOMIC IMPACT
In the unlikely event of an outage, ALP is prepared to communicate with its customers through:
ALP welcomes new customers to the community and helps existing customers grow or expand their businesses. ALP works hard to contribute to the vital community amenities and services that make Alexandria a great place to live or own a business.
For example, ALP staff compensation supports the local economy by driving local spending and investment. In 2023, the electric utility salaries totaled about $3.3 million, and ALP spent about $790,000 on local supplies, equipment and maintenance. These salaries and purchases from local businesses are recirculated multiple times throughout the community.
ALP plays a vital role in Alexandria’s economy by attracting, retaining and supporting businesses. Here are some examples of ALP’s community and economic development efforts:
u Participates in the MRES Economic Development Rate Discount Program
u Provides energy-efficiency rebates for homes and businesses
u Extends utility services for potential development
LOCAL CONTROL AND SERVICE
As a public power electric utility, ALP is committed to serving the local community. When citizens have concerns, they can communicate with ALP’s utility board members or staff who live in the community and have Alexandria’s best interests at heart. Citizens are welcomed and encouraged to attend public meetings. In addition, ALP offers local customer service with a payment office in Alexandria. ALP employs local people who know and listen to the customers. They take pride in their work and know the customers as family, friends and neighbors.
Here are some ways that ALP provides help to the community:
CUSTOMERS HAVE MORE SAY IN POLICIES & PRACTICES
u Hosted a Public Power Week open house that provided a meal, giveaways and educational displays
u Sponsored Alexandria’s Science, Technology, Engineering, Arts and Mathematics (STEAM) Expo with a financial contribution, as well as committee member and volunteer staff time
u Participated in Community Night Out with staff time and giveaways
u Provided a financial contribution, a volunteer committee participant and water treatment plant tours for the annual Kid’s Groundwater Festival
u Supported the annual 5th Grade Safety Day with a volunteer committee participant and financial contribution
u Sponsored the annual Fallen Lineman stock car race
u Showcased utility jobs at Career Day with a booth and multiple ALP employees
u Participated in Alexandria Community Education’s Big Vehicle Day displaying a utility bucket truck
u Volunteered at the Douglas County Fair with staff and a utility truck on display
u Contributed to the high school’s state tournament send-offs as a parade participant
u Volunteered staff to hang and maintain downtown holiday lights and decorations
u Sponsored the Legacy Gardens’ “Garden of Lights” walking tour
u Sponsored an Alexandria family in need for Christmas through employee donations
u Partnered with Runestone Electric to host electric vehicle safety training
u Partnered with Runestone Electric to host first responder electric safety training
u Adopted a section of ditches for ALP employees to clean
u Provided high school scholarship program for graduating seniors whose parents are ALP electric customers
EFFICIENT OPERATIONS AND MUTUAL AID
ALP’s headquarters and operations are located right in the community. ALP staff is familiar with the utility service territory and can identify and quickly correct any problems. Crews can get to the outage site faster because they do not have to drive long distances to start restoring power.
More than 1,100 utilities, including ALP, are linked through a national mutual-aid agreement. Mutual aid means utilities help each other in the event of a major storm or disaster. Knowing that ALP has access to aid in the event of a major incident is one more benefit to the Alexandria community.
ALP line crews have assisted disaster-stricken areas during storms. When impacted utilities are reimbursed through the Federal Emergency Management Agency (FEMA), they, in-turn, reimburse the responding utility. Public power communities work together to benefit the collective good.
PARTNERING WITH MISSOURI RIVER ENERGY SERVICES
BUILDING SOMETHING GOOD TOGETHER
Along with 60 other public power communities, ALP can access the resources and savings of MRES, including a more diverse power supply, transmission and many other services by being a member of the organization. Shared costs and mutual support make the effort more manageable and cost effective for all MRES members. Other benefits include:
u Economies of scale
u Aligned values and viewpoints to meet future challenges together
u Mutually beneficial services and opt-in services
u Reduced risks
Key services offered by MRES include:
u Power supply and transmission planning
u State and federal legislative advocacy and regulatory compliance
u Communications and marketing
u Energy-efficiency and electrification programs
u Load control and metering services
u Rate studies
u Scholarships and school education programs
u Community event sponsorships
u Cybersecurity assessments
u Education and training
u Proactive maintenance services
u Strategic planning and leadership development
NORTH DAKOTA
CONCLUSION
This report reinforces the dependability of the local electric system, while outlining additional financial and community benefits gained by the community. As a part of a public power community, ALP’s customers can count on:
u Reliable electric service
u A diverse power supply portfolio
u Affordable prices
u Governance that includes appointed local citizens who are also customers of ALP
u Local decisions that reflect the community’s values
u Financial contributions and in-kind benefits that support the City and its residents
u Economic development support
u Quick emergency response because crews live in the Alexandria community
u Municipal utilities working with local groups for shared success
ALP adds value to the community in ways that can be measured and experienced, and contributes to the health and vitality of Alexandria.
