The following is a transcript of the June 3, 2024, episode of Public Power Now. Learn more about subscribing to Public Power Now at Publicpower.org/Podcasts. Some quotes may have been edited for clarity.
Paul Ciampoli
Welcome to the latest episode of Public Power Now.
Our guest on this episode is Keith Butcher, general manager of Minnesota public power utility Princeton Public Utilities.
Keith, thanks for joining us.
Keith Butcher
Hello Paul. Thanks for the opportunity to be here.
Paul Ciampoli
To get our conversation started, I wanted to go back in history and talk about when you first joined the utility in 2019.
At that time, the utility was in the middle of a tumultuous period marked by a public referendum to abolish the local Public Utilities Commission. The referendum was soundly defeated.
I wanted to know if you could detail how Princeton Public Utilities successfully navigated this challenge in particular?
Keith Butcher
Absolutely. You know, like all other municipal utilities, Princeton Public Utilities has been deeply rooted in the community since its establishment in 1911. However, there were concerns regarding rates and services, which had been simmering for some time. In 2018, a candidate for mayor targeted the utility as part of his election campaign, which he then won.
By 2019, that focus had grown into an ongoing, aggressive and actually negative social media campaign focused squarely at the utility.
It was at that time that I came onboard. I had actually been working in the Princeton community as a representative for the Southern Minnesota Municipal Power Agency, or SMMPA for about 11 years prior to that so I had had some experience with the community and the staff and many of the local issues.
But I also have a strong background in politics. Given my connection with Princeton as well as that political background, I had hoped to help the utility navigate the challenges that they were facing. It was clear as soon as I had started that the situation was volatile.
There were accusations, misinformation, perceived slights and what I tried to do initially was just help lower the temperature, create some space to have a dialogue and really started learning as much as I could about the inner workings of the organization. And I did that because I wanted to determine what was accurate and what might be just misunderstood.
Listen to what everyone was saying to help me identify the underlying issues, because it's been my experience that the public can often have a good sense of when something needs to change, even if they might not be able to specifically articulate the problem, let alone offer a solution.
I just view our challenge as leaders is to be able to consolidate diverse and often conflicting feedback to develop specific solutions to address...concerns. So that's what I set out to do.
It was early on in my estimation, there were two things that PPU really needed to focus on and that was transparency and modernization.
At the time, there were complaints about preferential treatment, lack of respect, unclear decisionmaking and social media became the primary battlefield for shaping public opinion.
Although PPU had a minor presence on the web, there was an enormous vacuum, and as they say, nature abhors a vacuum. The comparable political adage that I've always used is if you don't tell your story, someone else will and you might not like how it ends...one of the first things I wanted to do was completely rebuild our website.
We needed the flexibility to provide updates to the community quickly and effectively. And I also needed to work on mobile devices where more and more of our customers were accessing information and we needed to be more transparent and accessible. And I was committed to showing the public what we were doing.
Good, bad or indifferent, but I felt they needed to know.
We created a YouTube page to record and share all of our public meetings on our new website and we also established sites on LinkedIn, Instagram, Twitter which is now X and Threads.
I also heard from longtime residents...that they didn't know anything about our power plant, our water treatment plant, or had ever even been inside a water tower.
So we created a series of virtual tours to show the public these local assets.
Now keep in mind this was all during COVID, so in person tours were not practical.
We've found that the virtual tours actually allowed us to reach more people because they could view it on their own time, and I think that had an overall positive impact on the public narrative. We also did a series of interviews to highlight the past, present and future of PPU.
Although we chose not to directly engage in arguments on social media as issues arose, we would create posts explicitly explaining policies that people were talking about, such as disconnections, deposit policies and the like.
Discussions would often conclude with an invitation from us to the public to attend one of our monthly Commission meetings because they are public meetings after all, and it is their utility.
If they could attend, we offered the option to provide comments in writing, and we also offered folks the ability to submit video comments if that would help.
While all that was going on, we also began an internal review of our processes and procedures.
When I had started, most of the staff had been with the organization for many, many years. Now, having a long tenured staff is invaluable to have that personal knowledge of the history and the past decisions. But it can also be a double edged sword.
If you don't have a concerted focus on continual improvement, one can find that operations tend to stagnate in that kind of situation.
I was finding tasks that should have been automated were taking hours of staff time to complete...and we didn't stop there.
The Commission was not immune to many of these changes either. Over time we created a Commission policy manual to cover such topics as conflicts of interest, purchasing policy and better define the roles and responsibilities of everybody.
As you pointed out, Paul, even with those changes, we did end up facing a public referendum on whether or not to abolish the Public Utilities Commission in 2020.
It really became a central point in the mayor's reelection campaign. Without taking a position the utility helped educate the public on the history of the utility and its role in the community. We created a specific page on our website to provide a series of FAQ's based on the questions that we received. We posted updates regularly on our new website and social media accounts. There was also a grassroots effort which was conducted independent of the utility that offered a counter campaign.
In the end that referendum failed 29% to 71% and the mayor lost reelection. The new mayor, who is still in office today, has led a shift towards a more collaborative approach and move beyond the turmoil of those last few years.
Although we continue to face challenges like everybody, we are now doing it together while sharing our successes and admitting our shortcomings with the public. Just keeping them up to date on our activities and that's just how I look at it in terms of what we've done to get our information out there and address the concerns that were raised at that time.
Paul Ciampoli
It sounds like even for a smaller utility, there's an importance to proactively leverage things like social media, whether it's in respect to what we've just been talking about in terms of this referendum or for that matter anything else, right?
Keith Butcher
Absolutely. When I came in, our primary method of engagement with our customers were through bill stuffers, a very standard way of how we used to operate years ago.
Many of our customers are on automatic payments, get electronic billings -- that is not as effective as it used to be.
And so learning to engage customers of where they're at, whether it's on Facebook or Instagram or LinkedIn, or you know, whichever ones folks are working with, I think are important.
Although we have all of our information on our website and people can come to us, we also need to be, I think, proactive and try to find where our customers are at and get the message to them in ways that they're used to consuming information in a modern environment.
Paul Ciampoli
As you look back at the last five years that you've served as general manager of the utility, what are the key accomplishments for the utility that you'd like to highlight?
Keith Butcher
We have undergone a remarkable transformation over the last five years, and we did that by placing a strong emphasis on operational efficiency, transparency and community outreach are the three that I focus on.
We've streamlined our processes to better serve our customers. We've ensured greater public access to Commission meetings through our YouTube account and heightened our engagement through events and social media.
The other thing I wanted to focus on internally was that we have really worked hard to foster a culture of employee empowerment. We've cultivated a workforce now dedicated to ensuring the welfare of both their colleagues as well as our customers.
Their commitment to mutual support and incremental improvement has not only bolstered our safety practices, but also led to operational efficiencies and cost savings, all of which ultimately benefits the entire community.
As a result of those efforts, we've been able to focus on several critical initiatives such as our electric capital improvement plan, a 10-year rate study, a comprehensive water plan, service territory annexation, fostering economic development and collaboration with the city, expanding customer programs and services, completing an AMI conversion for both electric and water, as well as improving the accuracy of our GIS system.
Paul Ciampoli
I wanted to turn to two recognitions that the utility has received from APPA. One, PPU's been recognized by APPA for Exceptional Electric Reliability in 2023 and also earned APPA’s Safety Award of Excellence for safe operating practices in 2023.
Against that backdrop, what are the steps the utility’s taken to maintain high levels of reliability and safety?
Keith Butcher
We have a small yet dedicated team. We have 13 employees including myself to give you an idea how small we are.
And that's what's been really instrumental in achieving that success in reliability and safety.
We've accomplished that through strong employee engagement, individual empowerment and a shared sense of responsibility.
The utility reciprocates that by taking care of our staff.
We know that life happens and there are times where everyone needs help and flexibility, and we find that when we take care of our staff and create a culture of support and well-being that they are then free to take care of our customers as well as each other. Ultimately, we've created a larger sense of community through mutual respect, purpose and pride.
Our team then ensures a swift response to challenges and continuous improvement in safety practices. It can be a lot of work, and it is a burden that ultimately falls on everyone through the shared sense of responsibility.
But the result, I think, is an effectively run organization that serves both staff and customers as well.
Paul Ciampoli
Earlier you mentioned the PPU electric capital improvement plan the utility is implementing so I wanted to give you an opportunity to offer additional details on that.
Keith Butcher
We're pretty proud of the electric capital plan. It's a lot of fun to work on. It's really aimed at modernizing our infrastructure and enhancing resilience.
It's got a focus on upgrading distribution systems and substations, as well as completing the transition to a higher voltage, and we're poised to meet growing demand and improve reliability.
And it's really part of our ongoing evolution.
In the early days, Princeton was served by a single radial line from Elk River, Minnesota.
Our reliability focus at that time was really on maintaining enough local generation to serve the entire town during transmission outages.
Currently, we have about 12 megawatts of diesel generation, but our summer peaks are now reaching around 14 megawatts.
Over time, the grid has built up around us, which has provided us with three points of entry into our system. However, the distribution system has not been updated to take full advantage of that flexibility.
In addition, two of our three substations really have reached the end of their useful life and need to be upgraded. All of this comes also in the midst of a long-term effort to convert the local distribution system from 4,160 [volts] to 12,470 [volts].
So in December of 2021, the Commission approved a three phase 10-year, $12 million electric capital improvement plan developed by DGR.
Again, to put that in context, our electric revenues are about $7.7 million, so that is a lot of money for somebody of our size.
We are currently in the completion part of phase one this year and are starting to design for phase two.
In addition to the work that I've already mentioned, we're also undergrounding all the new distribution line and services to increase resiliency.
We're also increasing the size of the tie line between two of our substations.
And that will allow us to feed the town from either the north or the south, thereby decreasing the likelihood of a system wide blackout.
We're on pace to complete the entire project by 2031 and feel that it really provides for a very robust system for the next generation.
Paul Ciampoli
One follow up question if I could. What are the ways that you're engaging and communicating with customers related to the plan and all the benefits it's going to provide?
Keith Butcher
Great question.
So all of these discussions have been handled at the Commission meetings again, which I mentioned, we videotape and then post online and they're recorded for people to come back and watch at any time.
We have also been working very closely with the City Council. We do a joint meeting with them, at least annually.
I attend a lot of the City Council meetings to make sure that the City Council members and the elected officials are kept up to date and then during construction -- again being small with an office right here in town – obviously, when they see folks out working in the right of ways, we often get phone calls about what's going on and the office staff has been trained in to provide information and let people know the intent and the rationale behind it and then provide them access to the resources that we have on our website to learn more.
Paul Ciampoli
You mentioned earlier in our conversation the Southern Minnesota Municipal Power Agency and the utility is a member of that joint action agency.
I wanted to know if you could describe for our listeners the ways in which the utility benefits from that membership.
Keith Butcher
Absolutely. And they’re numerous.
Princeton is an all source member of SMMPA. I always like to point out that SMMPA is a membership-based agency as opposed to what others might know as a project-based agency.
I personally find that this model is helpful because it allows us to work together on a large suite of issues that might benefit everybody in varying degrees, but ultimately it really is best for the system as a whole.
I know it can be tempting to want a more a la carte type structure.
But I really like the synergies that we capture through a membership-based group and to me that outweighs savings that one might see from individual service selection.
That's just my personal opinion.
Because ultimately we all need to provide the same basic level of service to all of our customers.
So I think the actual options sometimes can be a little bit more limiting than one might think, but long term, I just fundamentally believe we're all better off when we work together.
In addition to the supply side resource acquisition that SMMPA does, they also help us with regulatory filings and requirements, demand side management program administration, which is a whole other skill set and it's good to have that resource there as well as advocacy at both the state and federal levels.
You know the electric industry and I'm not saying anything anybody here doesn't know about already, but the electric industry is a complicated endeavor, and to be perfectly blunt about it, I know little old Princeton simply couldn't do it alone.
We rely very heavily on the expertise that's provided.
And then I would also want to share that SMMPA has done a great job in terms of transparency with members.
Although Princeton's not a board member, we're always welcome to attend their board meetings each month and we often do.
We get to hear directly from each department and we're free to ask questions, provide input and offer suggestions, and I greatly appreciate the willingness to listen to and serve all of their members, no matter how small.
And in addition to that I would also want to add that Princeton Utilities has been very thankful for all of its colleagues that have helped and partnered with us over the years through our involvement with SMMPA and the Minnesota Municipal Utilities Association, MMUA, as well as APPA.
I find it fascinating how unique the municipal utility industry is.
We operate as a business selling a product -- in our case, electricity and water.
We're structured as a government entity in terms of oversight and accountability. And yet we partner like no other association that I know of.
Unlike the private sector where folks might be competing for the same customers, municipal utilities really help each other, whether it's through information sharing or mutual aid, and because our goal is to serve each of our communities in the best way we can, it's nothing like I've seen anywhere else.
It's a unique combination of traits and an openness that you just don't find. We are just immensely thankful for all the support that we’ve received from our peers and we happily give back.
Paul Ciampoli
Thanks again Keith for taking the time out of your day to speak with us.
I would love to have you back as a guest at some point in the future on the podcast.
We could revisit where things stand with the electric capital improvement plan.
I'm sure there will be a lot of other things going on at the utility that you would like to discuss as well. So I just want to give you an open invitation to return.
Keith Butcher
Thank you, Paul. I appreciate that.
Paul Ciampoli
Thanks for listening to this episode of Public Power Now, which is produced by Julio Guerrero, graphic and digital designer at APPA.
I'm Paul Ciampoli and we'll be back next week with more from the world of public power.
