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Electric Utility Municipalization:
Key Statistics and Risk Considerations
The vast majority of municipalization efforts in the U.S. over the past 25 years (i.e., the condemnation of existing utility assets) have been abandoned or rejected by voters because of the high costs and risks.
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While owning and operating a municipal utility can provide certain benefits, there are many potential risks of municipalization that voters of a municipality must evaluate, including:
The extensive time and unknown cost associated with the process to municipalize;
The unknown nature of the future cost of municipal electric service, including the upfront acquisition and ongoing operating costs, and thus whether municipalization will ultimately produce a community’s desired benefits, such as lower rates for customers; and
The municipality’s capability to operate the electric system safely and efficiently and its ability to respond to the rapid changes in the industry, including ongoing capital investment to meet increasing demand, attracting large load customers and investment, addressing state and federal policy objectives, and maintaining security amid increasing cyber security threats.
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