Power by the people: Murray celebrates 100 years of operating own utility
The idea was sold to residents by the leaders of Murray City as a housewife's dream electricity always available from a city-owned power company.
Just think about it.
"Every housewife can have her own electric flatiron always hot while the switch is on; [she] can operate her own sewing machine, washing machine and churn by simply turning the switch."
One hundred years ago, when that pitch was made, the leaders of Murray City were upset with the slow introduction of electrical power into their community.
Progress Electric Co., the power company serving the area at the time, had set up poles and strung power lines in 1905 to provide enough electricity for a couple hundred street lights in the community that at the time had a population of a little more than 4,000. But seven years later, little additional progress had been made, and the power company showed little inclination to do much more.
That's when Murray residents took the matter into their own hands, making a decision about their energy future whose impacts still resonate today.
In 1913, after voters overwhelmingly approved the city issuing a $60,000 bond to pay for the venture, Murray City Power was born.
"They were taking an expensive gamble at the time," said Blaine Haacke, who a century later is general manager of Murray City Power, the only municipally owned power company in the Salt Lake Valley and one of the oldest in the state. "Fortunately, everything worked out for them, and 100 years later we're still around."
Today, what started as a small power company with a single generating asset the $60,000 bond was used to purchase water rights and build a hydro-electric generating plant at the mouth of Little Cottonwood Canyon Murray City Power provides about 100 megawatts of electricity to 13,500 residential and 3,000 commercial customers.
Murray is one of 39 municipally owned utilities in the state that serve a combined 217,670 customers. Many of those utilities were born of the same frustrations that Murray residents felt the big power companies just weren't interested in serving smaller communities so they did it themselves.
They found their own sources of power, strung their own transmission lines and put meters on homes and businesses. Today, the operators of many of those municipally owned utilities would say that along with being a strong competitive force to investor owned utilities such as Rocky Mountain Power, they also serve as a "yardstick" for consumers and regulators to measure the performance and rates of their larger rivals.
"Our rates are typically a little less than those of Rocky Mountain Power, although there have been a few times over the years when our residents paid a little more," said Dan Stireman, energy services manager for Murray City Power. "Regardless, our rates always have been real competitive."
Murray still generates electricity from the water running out of Little Cottonwood Canyon, although most of its power now comes from a diverse portfolio of generating assets scattered across the West.
It gets hydro power from Glen Canyon Dam and Flaming Gorge Reservoir. It operates its own natural gas turbines that can be switched on at a moment's notice. It gets electricity produced from landfill gas collected at the Salt Lake Valley and Trans-Jordan landfills, and it has an interest in coal-fired generation from the Hunter II project in Emery County, the Intermountain Power Project near Delta and the San Juan project in northwest New Mexico.
"Our hydro-power plant in Little Cottonwood Canyon is still producing electricity for us, but as a percentage it is a pretty small amount about 5 megawatts, or about 5 percent of the electricity we provide our customers. And it's a seasonal resource, with production peaking during the high runoff in the spring and summer, and declining to practically nothing during the winter months," Stireman said.
Yet even that diverse portfolio of generating resources isn't enough for the executives at Murray's power company to feel comfortable about what the future might hold.
"The challenge we face is continually coming up with inexpensive resources for our customers," Haacke said. "Coal-fired generating resources in particular are becoming an issue with [the Environmental Protection Agency]. And that's a big source of concern for us long term."
Murray gets about 50 percent of its electricity from coal-fired power plants, 25 percent from hydro-electric generation, 12 percent from landfill gas and 6 percent from running its own natural gas turbines.
"At times we'll turn to the spot market and buy some power there, but that happens only when the cost of buying electricity is lower than the cost of producing it with our own gas turbines," Stireman said.
When Murray Power was organized, the company built its own transmission line from Little Cottonwood Canyon into the city. And for many years, it also operated its own diesel fuel-fired generating station that over the course of several decades produced all of the electricity Murray's residents demanded.
These days, the company, like most other municipal utilities operating in Utah, depends upon Rocky Mountain Power to carry electricity over its extensive network of transmission lines to Murray's grid.
Rocky Mountain Power has an open-access transmission system and it operates independently from the company's other businesses, said Jeff Hymas, a spokesman for the utility. "So we are willing to serve municipalities and other customers" throughout the region.
From 100 years ago fast-forward to today, and city-owned electric utilities are still being set up when for whatever reasons big investor-owned power companies decide not to operate in a particular community, said Nick Braden. He's a spokesman for the American Public Power Association, an organization that represents the interest of the nation's more than 2,000 community-owned electric utilities.
There have been few new community-owned electric utilities organized in the U.S. in recent years only 16 in the past decade according to the APPA.
"But when they are the reasons remain the same as always," Braden said. "Those communities want electrical service, and the investor-owned utilities just don't want to serve those areas."
And that was the case with Eagle Mountain, a fast-growing community in Utah County. The state's youngest municipally owned utility began offering service to residents in 1997 and today provides electricity to about 5,600 customers.
"When it came down to it, Rocky Mountain Power wasn't interested in serving us at the time," said Eagle Mountain Mayor Heather Jackson. "We had to do it ourselves. And although our rates right now are a little higher than what Rocky Mountain Power customers pay, it's because we're so young and still in the process of paying back the debt that we took on to build our system."
Hymas said that before Rocky Mountain Power will extend service to any community it must determine that it makes economic sense, both for the company and its existing ratepayers, who ultimately will pay the cost of expanding the utility's distribution system through the rates they pay.
Jackson said one of the big pluses of Eagle Mountain operating its own public utility is knowing that the system is being operated strictly for the benefit of the community's residents.
"Our destiny is in our own hands and not influenced by the shareholders" of an investor-owned utility.
Where Murray gets its electricity
Coal-fired plants 50 percent
Hydro power 25 percent
Landfill gas 12 percent
Natural gas 6 percent
Spot market* 7 percent
*Percentage depends upon spot market price versus cost of running natural gas turbines.
Source: Murray City Power