Association for Public Policy Analysis & Management

Transitioning electricity systems to meet environmental, security, and affordability goals creates challenges as new technologies, actors, and institutions encounter existing infrastructure, powerful incumbents, and a regime of legacy public policies and practices. Dropping costs and increasingly complex sets of policies challenge traditional electric utility business models. While most policy research attention has focused on the internal conflicts within investor-owned utilities (IOUs) and the use of centralized policy mechanisms to overcome them, research has largely ignored municipal utilities (munis) and rural electric power cooperatives (co-ops). These organizations serve 20% of U.S. electricity customers, cover more than 70% of the geographic area of the United States, and have a distinct organizational structure. These utilities were created to serve the public through participatory decision-making and local control, and do not have the responsibility to shareholders nor to the broad state regulatory authority that drives IOU actions. In this context, our research examines how munis and co-ops are deploying distributed energy resources (DERs), such as rooftop solar, microgrids, and demand-side management. DERs can reduce environmental impacts, improve grid resilience, promote energy autonomy, and empower individuals and communities to create more sustainable energy systems, but realizing these benefits requires fundamental shifts in relationships among energy consumers, electricity distribution service providers, and electricity generation and transmission providers. This study asks how munis and co-ops view the evolving relationships with their customer or member-owners and institutional partners and whether their efforts support energy democracy through decentralized authority and more democratic control. To understand the potential for change involving munis and co-ops we focus on how these utilities frame their role in engaging citizens and reordering institutional priorities. We also examine how these frames relate to a continuum of community control as reflected in ownership structures, service contracts, self-reliance, local approval and planning, local decisionmaking, and public participation. Our findings are based on descriptive data, document review, and nearly 50 semi-structured interviews with munis and co-ops in Minnesota, where these utility types serve almost 40 percent of customers. Drawing on this research we assess how federal, state, and local policies and programs for DER implementation could further support energy democracy and the potential tradeoffs with other DER benefits.