Minneapolis Looking to Run its Own Utilities
Right now Minneapolis residents pay private companies for gas and electricity service, but the city believes it can provide the same service cheaper.
"With the profit motive or profit factor removed the city would be able to keep prices down," Ward 5 Councilman Don Samuels said.
Samuels says Minneapolis is considering setting up city owned and operated energy utilities.
"We're looking at this with caution, with limited risk," Samuels said.
According to Jack Kegel of the Minnesota Municipal Utilities Association, the first step is to put this project to a public vote. The next step is an economic one.
"The most likely route would be to go to the Minnesota Public Utilities commission and have the commission establish a value for the property that would be taken," Kegel said.
That property would include Xcel and Center Point Energy Utility poles, wires, substations and piping. The price tag could be well into the billions. A decision to switch from investor- owned to municipal owned is rare.
"It's unusual; it's not common," Kegel said.
Right now there are 125 municipal electric utilities and 32 municipal gas utilities in Minnesota. According to Kegel, they serve about 700,000 Minnesotans, compared to the 1.3 million served by private companies.
Not everyone supports this move to municipal utilities. Todd Klingel of the Minneapolis Regional Chamber of Commerce says asking the public to vote on this in November is a mistake.
Klingel believes city customers will get stuck with additional costs for investments and upgrades.