The following is a transcript of the Nov. 4, 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 Power Power Now. I'm Paul Ciampoli, APPA’s news director. Our guest on this episode is Kaukauna Utilities Commission President Lee Meyerhofer. Kaukauna Utilities is a Wisconsin-based public power utility. Lee was elected in July to chair the American Public Power Association’s Policy Makers Council. Lee, thanks for joining as a guest on the podcast.
Lee Meyerhofer
You're welcome. Thanks for inviting me.
Paul Ciampoli
To get our conversation started, I want to give you the chance to talk about how you came to serve in your current role as President for Kaukauna Utilities Commission.
Lee Meyerhofer
Well, I've been at the Kaukauna Utilities Commissioner for nearly 30 years now, so I started back in 1995, first as an elected official and then as an appointed official. I was first elected to the Kaukauna City Council in ‘92. A few years later, my peers elected me to to the City Council Chairman of Board of Public Works, which made me a de facto member of the Commission.
In 2003, they elected me as President -- I've been the elected president ever since. So I've been president now on the board for over 20 years. I don't feel old enough to say that, but it's half of my life I've been on the board. I started at 30 and I'm 60 now. In any event, my background is electrical. I first served an electrical apprenticeship and then I became a journeyman wireman. A few years later, I started an electrical contracting company. I was later elected to the Wisconsin Legislature, where I served as the ranking member of the utility committees and worked on a lot of energy issues.
I then went to work the last 17 years of my career with the American Transmission Company, which is also known as ATC, which is an electrical transmission-only utility company here in Wisconsin and a few neighboring states. 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. So that's probably the long version of a short answer to your question so that's how I got where I got.
Paul Ciampoli
What do you think is valuable for public power governing board members to do to support their communities?
Lee Meyerhofer
Being active, engaged, in civic groups, financially supporting the community events and projects and do things that promote the utility. Being that the utility is owned by the community, I think 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 time per year to donate their talent and time to a non-profit of their choosing -- we promote and encourage our employees to give back and invest in the community. If you look at our board, it's actively involved in the community. Collectively, we belong to or have belonged to many civic groups and other types of groups in the community, including like the Lions and the Thousand Islands Environmental Center and Sportsmen's Club, where people shoot clay pigeons and archery and target practice and we’ve got a very active wrestling club, basketball, softball, basketball, baseball, Kiwanis, the Chambers, church groups, labor groups, Library Foundation.
Our board members are active in every one of those, so we have a very active board and it's a diverse board. We celebrate Public Power Week with pride at our utility and in our community and promote public power. Around our region, people are known and we call ourselves the electric city -- we own hydro – so it's those types of things that I think if you're a board member you need to be involved with. Some of the things we actually do is we provide scholarships.
At Kaukauna Utilities, we employ linemen mechanics, finance personnel, IT, engineering professionals and others. We provide four scholarships a year. One of those scholarships is earmarked for [two years] to go to a technical college such as being a lineman or something of that nature -- the other three go to a four-year program, but the recipients all have to be pursuing an education in a field that's relative to our industry. But it's a way of giving back and investing in our community towards the things that we need to operate and move forward in our industry. I think you want to sponsor and be partners in your community. We partner with the school system, with youth apprenticeships.
We use different types of youth apprenticeships. We're partnering with the school system. We have a charter school that we have a partnership with as well. We sponsor community events – festivals -- whether it's music, the arts, or whatever. We did a windmill project on the school property where we erected a windmill and they were the benefactors of that project and we eventually gave them the windmill and they got all the power behind the meter.
We sponsor a Cheesehead wrestling tournament. It's one of the most premier wrestling tournaments in the entire country and we're one of the major sponsors of that tournament. We've always been proud of that as it grew to be this national tournament. We sponsor a 5K firecracker. It's on July 4th. It's a 5K run...we donate financially and provide in kind services to local community projects. I think those are important things to do. Our community built a new library and we pledged to sponsor an area of that.
We supported our local historical society when they were having a capital improvement fund drive. We were part of that. We've got [the] Thousand Islands Environmental Center that we partner up with different things and donate our time in kind and other things, so I think just being an active member of your community. I think board members should consider joining local groups, whether it's a civic group, a sports group, a business, a labor, a church group, whatever it may be, is to integrate into your community and in all the different walks of your community, be part of all of it.
I think we do a good job of that and I would recommend anyone to be cognizant and thoughtful of that when you bring new board members on and existing board members. So if you're just active in your community and then just be a good ambassador of the utility when you’re in your community, be a good ambassador. So that would be my thought on that.
Paul Ciampoli
Great. Thanks Lee. That's a lot of great examples that you listed off. I wanted to set the stage in terms of the next question, which is specifically between your role as Commissioner and as chair of the Policymakers Council, your efforts involve advocating locally at the state level and nationally for public power. So why is it helpful for public power governing board members to be involved in all levels of advocacy? And how do you know when you have the right balance?
Lee Meyerhofer
Having the right balance is really an important part and I'm not sure you ever know for sure when it's the exact right balance, but you do have to balance it in all three. Advocacy is important at all three levels and for various reasons -- they're not the exact same reasons. They're similar, but different. I'd say at the local level as a board it's important advocate for the utility by informing the electeds in your community, the citizen, the day-to-day citizen that you run into, ratepayers -- because not all ratepayers live in the city, they might have a business here, but they live outside or they might have an investment property, but they're living outside, so it's important to let them know the value and the role that public power plays in the community, not just Kaukauna Utilities, but public power.
And we really stress that to board members – that we're one and the same -- we call ourselves Kaukauna Utilities, but we are public power as well. So in Wisconsin, for example, 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. So in our case, the city of Kaukauna owns us. We are a population of about 17,000 people. Being that the city 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.
This is similar to a dividend payment that would be paid to, let's say, shareholders of a privately held utility, so the city gets that dividend payment every year.
Now, in comparison, if our service territory was owned by an IOU, for example, 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, talking a couple hundred thousand, so that's a big difference for a city of our size that they get that payment in lieu of taxes or what I refer to as the dividend for owning the utility.
So as a board member, it's important that the community knows the value of the pilot payment and how it puts meaningful downward pressure on property taxes, because 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.
Unlike privately held utilities, munis operate as a not for profit so all of our profits are reinvested back into the community-owned utility. I'll give you an example with us at Kaukauna. We're adjacent to two IOUs. Their residential rates -- the one is 29% higher than our rate. The other one is 54% higher than ours. So that's a savings if you use one or the other. If you use the one that's only 29% higher than us, that's a savings of $3.8 million to our ratepayers per year. If you use the one with the higher one, it's $7.1 million per year.
That's a significant savings and I think it's 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. Munis are typically more reliable overall than IOUs as well and we send that message as well. But at the state level, we promote, encourage all board members to attend joint action offered events.
Our trade association here in Wisconsin -- it's called MEUW. It stands for the Municipal Electric Utilities of Wisconsin. They offer an annual conference and a legislative rally day at the Capitol every year. We have a good rally at the Capitol for advocacy at the Legislative Rally Day at the Capitol.
There's a parade of boom trucks and other utility vehicles that drive around at our Capitol. It's called the square, so there's a square of road that's around the Capitol grounds. And you have to get a permit, which we do and we have a parade of all these vehicles and and it raises the profile of public power and then we provide bucket truck rides that are offered to legislators and their staff. So it allows that interaction that's not on the business side and the policy side that you get to raise your profile.
That event also gives board members a chance to get exposed to the state issues facing our industry and the position public power is advocating for and why they're advocating for that position. Board members also get a chance to meet their state legislator and representative and participate in advocating for public power by discussing 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 that have participated. We've always got good reviews on that.
Our joint action wholesaler is WPPI – it used to stand for Wisconsin Public Power Incorporated -- but we've now expanded outside our state, so we now call ourselves WPPI. In any event, they offer an annual conference and an annual regional dinner.
However, WPPI also plays a prominent role in promoting and providing grant funding for general managers of the municipal utilities, elected executives such as mayors and village presidents, and commissioners to participate in advocacy at the state and federal level.
So they help pay for some of the funding to go to the legislative fly in in D.C. for APPA because they realize the importance of board members advocating at the state and federal level with the elected officials. And at the federal level, at Kaukauna we promote and encourage all board members to attend the legislative fly in and the National Conference. The fly in 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 they take that position.
And they usually get to see both sides -- how it would adversely affect us if it got passed or how it would help us if it got passed. And then board members also get a chance -- just like at the state level -- to meet their congressmen and their two U.S. senators and participate in advocating for public power at the national level by discussing the issues that are important to us at that moment. This has proven to be a very powerful and positive experience for our board members. Most have never been to DC and met with their congressmen or met with their U.S. senators.
At Kaukauna Utilities, we view attending these conferences and legislative rallies as an investment rather than an expense. We see that if a board member is willing to give of their time to attend any of the offered events at the state or federal level,
KU provides full payment of all expenses – whether it’s reimbursement or paying upfront the fee to attend, or the hotel costs, or whatever that is. We look at [it] as if the role of a board member is to make fiscally prudent decisions in any 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. We want it to be tomorrow’s utility. We’ve made that decision, so if you want to be tomorrow’s utility, and you don’t want to just be taking care of yesterday’s utility and staying the same, I think it’s imperative that you attend this stuff and get this information and that’s how we look at it here in Kaukauna.
Paul Ciampoli
For my final question, I wanted to give you the opportunity to describe what you think are the steps that public power utility leaders can take to help utility board members be effective in their roles.
Lee Meyerhofer
It's a great question. 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, so I really do appreciate that question.
The two things that come to my mind is an orientation obviously for new members, but 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. Now the board member doesn't have to get so deep in it -- there's a lot of breadth out there.
So perhaps we should be looking at a progressive type of orientation where there would be another session, perhaps every 9-12 months for the first couple of years anyway, instead of thinking, oh, we did an orientation, now we gave them all the information – it's up to them to use it. Secondly, I think we need to develop an engagement program that's geared specifically towards engaging board members. You know the success of most any organization is staying relevant and then sustaining high levels of engagement. Public power at all levels would be more robust and influential if there was a higher level of engagement of board members. We've attempted this at some level in Wisconsin.
For example, in our organization, our new commissioners are offered an orientation and pretty much everyone takes them up on it. But our GM 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, so they at least have the basic understanding of the operations of our organization.
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 – everyone's schedule is a bit different, obviously.
And when registration opens for conferences or rallies for advocacy at the state level, at the federal level, I continuously encourage our board members to attend. We pride ourselves -- our utility -- that we have the highest percent participation of any municipal utility in Wisconsin at our state functions. We also have the highest participation of any Wisconsin municipal utility at the federal -- whether it's the national conference or the rally -- so we do push it and I encourage everybody to do that, but I think there needs to be a more organized engagement process. In closing, if the goal is to make board members more effective in the role, I think 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.
Paul Ciampoli
Lee, thanks so much for taking the time to speak with us. As we were proceeding with this conversation, one thing that that occurred to me is the fact that a lot of times in this podcast, we focus on the roles and activities of public power utility officials, so I think it's very fair to say that our listeners will truly appreciate your perspectives and insights with respect to the role of public power governing boards. So thanks again for taking the time to speak with us.
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.
