In late January 2024, strong winter storms are battering many parts of the country, supply lines and shipping channels for critical commodities are threatened, a short-term budget deal is keeping the federal government functioning, and another rollicking presidential primary season is in full swing. Many economists see GDP growth tapering for 2024 as inflation, consumer spending, and hiring slow just enough to allow the soft landing targeted by the Federal Reserve. Seemingly immune to other forces, the magnificent seven technology-related stocks continue to outperform, including Nvidia up 233% from this time last year on a wave of investment in artificial intelligence.
Community-owned electric utilities adjust to the ups and downs of this sea of economic inputs in various ways. This issue focuses on some of the trends and elements that enable public power to consistently add economic value to the communities we serve.
The utility sector will continue to face what Jim Robb, CEO of the North American Electric Reliability Corp., called a “hyper-complex risk environment” at our recent Joint Action Conference. He was referring to the combination of federal and state policies, the rapidly changing resource mix, extreme weather complexities, and a landscape of other cyber and physical security threats.
The same technological heyday fueling the magnificent seven creates electricity demand that will stress the balance of reliability, affordability, and transition to new generation with less capacity to balance system operations. In addition, while national supply chain constraints have generally improved, the energy sector continues to have long lead times for order fulfillment of key components like transformers.
These issues directly impact the economics of our industry and remain front and center in our advocacy, training, and technical services at APPA. At the Legislative Rally in February, member delegations will be armed with timely points to make the case for policies like ending the specter of sequestration of Build America Bonds and elective pay tax credits, stopping regulations that could compound the transformer shortage, streamlining permitting processes to enable key infrastructure investments, and protecting existing infrastructure like hydropower projects that provide much-needed clean, economic, dispatchable electricity.
Closer to home, local governance helps community-owned utilities create strategies to address economic risk and add value where it matters most. This issue includes some poignant examples of how to add and showcase a utility’s value. You can also beef up your knowledge on the value of public power on our website, where there are specific pages detailing the steps to take when buyout/sellout proposals arise or when communities are considering forming a new public power utility. We are updating and refining these tools to make them easier for members to use, and a free on-demand series called Public Power 101 describes how the industry evolution is impacting public power and the basics of how we provide reliable, affordable power and enhance economic development.
There is a good story to tell about how we are successfully riding today’s economic waves. Please let us know how we can further help you to tell this story in D.C. or in your home community.
