Lee Meyerhofer has been a commissioner for Kaukauna Utilities in Wisconsin since 1995 and its president since 2005. Lee was elected to the Kaukauna City Council in 1992 and to the Wisconsin Legislature in 1998. On the Legislature, he served as the ranking member of the Energy and Utilities Committee. He previously worked as an electrician and started an electrical contracting company. He also spent 17 years with American Transmission Co. Lee currently serves as chair of APPA’s Policy Makers Council.
This Q&A is excerpted from an interview on the Public Power Now podcast.
What is valuable for public power governing board members to do to support their communities?
Being that the utility is owned by the community, it’s important that the utility plays an outsized role in the community. At Kaukauna, we’re committed to community service. We provide each of our employees eight hours of leave per year to donate their talent and time to a nonprofit of their choosing — to give back and invest in the community. If you look at our board, collectively, we belong to or have belonged to many civic groups and other types of groups, including the Lions and the Thousand Islands Environmental Center and Sportsmen’s Club, Kiwanis, the Chambers, church groups, labor groups, the Library Foundation.
Board members should consider joining local groups, whether it’s a civic group, a sports group, a business, labor, or church group, whatever it may be, to integrate into all the different walks of your community, be part of all of it.
Why is it helpful for governing board members to be involved in all levels of advocacy? How do you know when you have the right balance?
I’m not sure you ever know for sure when it’s the exact right balance. Advocacy is important at all three levels and for various reasons. At the local level, as a board it’s important to advocate for the utility by informing the elected officials in your community, the day-to-day citizens that you run into, ratepayers [who] might have a business here but live outside the city, the value and the role that public power plays in the community.
In Wisconsin, public power utilities such as ours make a payment in lieu of taxes — commonly known as a pilot payment — to the community that owns it. In our case, the city of Kaukauna, with a population of about 17,000 people, owns us. The utility pays the city an annual pilot payment [of] about $1.5 million, which is based on a formula that’s set by the state. If our service territory was owned by an investor-owned utility, they would pay those taxes to the state rather than to the city, and the city’s portion of the $1.5 million would be a small fraction of that amount. When I say small fraction, we’re talking a couple hundred thousand dollars, so that’s a big difference for a city of our size. It’s important that the community knows the value of the pilot payment and how that payment goes to the city, which they can use to pay for services that they provide for the community, which puts the downward pressure on property taxes.
Then, if you look at the cost side, municipal utilities by and large have lower rates than their IOU counterparts. We’re adjacent to two IOUs — [one’s residential rate] is 29% higher than our rate, the other one is 54% higher than ours. So, that’s a savings of $3.8 million to $7.1 million per year to our ratepayers. It is our role as board members to make sure that we’re passing that information on to people so that they understand the value and the role that we play.
At the state level, we encourage all board members to attend joint action-offered events. Our trade association here in Wisconsin, the Municipal Electric Utilities of Wisconsin, offers an annual conference and a legislative rally day every year. There’s a parade of boom trucks and other utility vehicles that drive around at our Capitol. It raises the profile of public power, and then we provide bucket truck rides that are offered to legislators and their staff. That event also gives board members a chance to get exposed to the state issues facing our industry and then meet their state legislator and representative to discuss public power’s position on pending legislation or legislation we’d like to see introduced. This has proven to be a very meaningful and positive experience for our board members.
And at the federal level, at Kaukauna we promote and encourage all board members to attend APPA’s Legislative Rally and National Conference. The rally gives board members a chance to get exposed to the national issues facing our industry, which many times are different than what’s at the state level, and then they get to understand the position that public power is advocating for and why. This has proven to be a very powerful and positive experience for our board members. Most have never been to D.C. and met with their congressmen or their senators.
We view attending these conferences and legislative rallies as an investment rather than an expense. If the role of a board member is to make fiscally prudent decisions in an industry that’s rife with market disruptions, it’s imperative that members are participating in these events to learn more about best practices and how the industry is being molded and shaped by innovation and legislation and what tomorrow’s utility will look like.
What steps can public power utility leaders take to help utility board members be effective in their roles?
Overall, I think public power is a great value to the communities they serve and does a lot of things right. However, I do think there’s more to be done to help utility board members be more effective in their roles.
First, orientation for new members. I’d argue that most board members that are appointed, they’re new for the first three years or so because the breadth of what’s going on in the utility industry is pretty wide, and the depth can get pretty deep. I suspect my electrical background gave me a better understanding of the technical aspects of the electric utility industry, and perhaps it gave my fellow board members the confidence one looks for in electing their leaders on a board such as ours. Perhaps we should be looking at a progressive type of orientation where there would be another session, perhaps every nine to 12 months for the first couple of years anyway, instead of thinking, “Oh, we did an orientation, we gave them all the information, now it's up to them to use it.”
Our general manager offers an orientation [with] new commissioners where there’s a one-on-one meeting with the GM. ... They tour the facility, meet [the] leadership team and get an overview of day-to-day operations. As president of our commission, I have one-on-one conversations with our members, letting them know what my role as president is to help them learn the workings and purpose of the board. I encourage all of them to be as active and engaged as their schedule will allow.
Secondly, we need to develop a program that’s geared specifically toward engaging board members. Public power at all levels would be more robust and influential if there was a higher level of engagement of board members. If the goal is to make board members more effective in the role, we can’t wish it upon them and expect it to happen. Rather, public power needs to make promoting engagement of board members a priority and a goal.
