INTEGRATION OF MUNICIPAL SERVICES

ABSTRACT Through the use of selected case studies, this paper outlines the methods by which municipal functions can be integrated to achieve higher overall energy efficiencies and lower costs to consumers. Since potential energy savings tend to multiply as the scale increases from the individual home or business to the urban or regional scale, integrating municipal services can be an effective tool for any community. Several key areas are identified in the paper for the potential integration of municipal services. These are: (1) load management and conservation; (2) joint utility-customer energy services, (3) generation and new energy systems, (4) integrated energy systems, (5) administration and operations; (6) financing and planning, and (7) communications. Taken individually, the techniques outlined in the paper are not new or unique. What is new, however, is that many communities are beginning to look at the delivery of municipal services as a total system. The paper also argues that potential benefits from integrating municipal services should be viewed in even a broader perspective than energy and material savings. Attraction of new industries, jobs creation, a cleaner environment, and improved quality of community life may also result. Better coordination of municipal functions is not without challenges. Planning is essential and must be tailored to the individual community. Additional training and expertise may be required. And political constraints can face efforts that are perceived as undermining traditional departmental authorities. Yet with the commitment of the community, these challenges can be overcome. The litany of problems facing the modern electric utility system in the United States is well known. Rising fuel and capital costs have increased the cost of producing electricity. Environmental concerns have altered the choices of fuels for generation or have led to higher costs due to installation of pollution control equipment. In many cases, slack demand for electricity has altered past planning practices that were premised on declining costs and an expanding rate base. Economies of scale have apparently reached a limit; in fact, the longer lead times of large generating facilities increase the cost of capital and place challenging demands on forecasting an uncertain future. And, finally, heat rates for the generation of electricity by conventional fossil fuel stations have remained essentially flat since 1967 ( Renshaw 1975 ). Without a fundamental re-evaluation of what the proper role of electric utilities should be, the prospects for productivity improvements — and hence lower electricity rates — appear dim for the near future. By necessity this re-evaluation involves both technological and instutitional issues. In the United States, the complexity of the electric utility industry compounds the complexity of the institutional issues. The U.S. electric utility industry is composed of three major segments that generate and distribute power to ultimate customers — investor-owned utilities, rural electric cooperatives and local publicly-owned systems — and Federal systems that generate power for wholesale only. Each of these segments has their own imperatives and opportunities for improving productivity and lowering costs. This paper, however, will be confined to local publicly-owned systems only. The American Public Power Association (APPA) is the national service organization that represents 1,750 publicly-owned electric utilities in the United States, Puerto Rico, the Virgin Islands and Guam. Public power systems are the second largest segment of the U.S. industry, accounting for 13.5 percent of ultimate customers with sales of over 320,000 GWh or 320 TWh of electricity in 1981. APPA's members have been actively engaged in exploiting certain opportunities, among others more common to the industry as a whole, for increased productivity which are unique to local and public ownership.