What Is the Best Medical System in the Country? The Answer May Surprise You.


The Veterans Administration (VA). Yes, a medical system 100% financed by the government and run by the government, provides higher quality care, at a lower cost, than private hospitals. That’s the conclusion of dozens of independent studies. But a multi-year, well-financed and highly effective campaign has persuaded Congress to ignore the data because, well, we all know the government cannot do anything efficiently. The tragic result? Congress has begun the process of dismantling the most effective (and largest) medical system in the United States. In the Washington Monthly Alicia Mundy reports the sad and revealing story.

Listen to the Lawyers: Audio of Oral Arguments Now Available in TN/NC vs FCC


Attorneys argued before the Sixth Circuit Court of Appeals on March 17th in the case of Tennessee and North Carolina vs the FCC. The attorneys presented their arguments before the court as it considered the FCC’s decision to peel back state barriers that prevent local authority to expand munis.

A little over a year ago, the FCC struck down state barriers in Tennessee and North Carolina limiting expansion of publicly own networks. Soon after, both states filed appeals and the cases were combined.

You can listen to the entire oral argument below – a little less than 43 minutes – which includes presentations from both sides and vigorous questions from the Judges.

To review other resources from the case, be sure to check out the other resources, available here, including party and amicus briefs.

This article is a part of MuniNetworks. The original piece can be found here

Mancos Voters The Latest To Decide Local Authority In Colorado


 Mancos, a rural community of about 1,300 in rural southwest Colorado, hopes to join over 50 other communities across the state that have reclaimed local telecommunications authority. On April 5th, the town will decide whether to exempt itself from SB 152, Colorado’s 2005 state law that removed local choice from municipalities and local governments.

Located at the base of the Mesa Verde National Park, Mancos is best known for outdoor recreation and as the gateway to the park, home to the historic Mesa Verde Cliff Dwellings. Rangeland and mountains surround the community.

The Pine River Times Journal reports that Mancos is looking to utilize 3,300 feet of fiber optic assets already in place. The fiber now connects municipal facilities but community leaders want to have the option to use the network for businesses, residents, or to provide Wi-Fi to visitors. SB 152 precludes Mancos from using their publicly owned fiber for any of those purposes without first opting out.

On March 9th, the Town Board of Trustees approved a resolution encouraging voters to pass the ballot initiative that will reclaim local authority. They have information about the ballot question and what it will mean for the community on their website.

“It’s an anti-competition bill [SB 152],” [Mancos Town Administrator Andrea Phillips] said. “[Exempting out] gives us a lot more leeway.”

Mancos has no specific plans to develop a municipal fiber network but, like many other communities that opted out last November, they want the ability to do so or to work with a private sector partner. Nearby Dolores is collaborating with Montezuma County; the two have contracted jointly for a feasibility study.

According a March 16th Pine River Times Journal article, Dolores and Montezuma County will put the issue to voters in November. Jim McClain, IT Manager for the county said:

“Opting out unties our hands in order to build up the system. It’s like we build the road, and then private companies provide the service on that road.”

“When people and businesses are thinking of moving here, the first thing they want to know is if there is broadband.”

In Mancos, the local Chamber of Commerce is considering the needs of visitors as well as residents.

“It’s all about economic vitality,” [Mancos Valley Chamber of Commerce Administrator Marie Chiarizia] said.

Mancos potentially could make broadband service available anywhere in the town if it’s exempted from SB 152, Chiarizia said. Outdoor events such as Mancos Days draw temporary vendors, and broadband access would allow those vendors to be able to take credit and debit cards more quickly, she said.

The Mancos Board of Trustees voted to contribute $4,100 to participate in the feasibility study on March 23rd.

“To look to the future and become prosperous you have to look at the infrastructure of the town and offer these services…Mancos is a unique community unto itself, but this will help us promote our town better and place us on a competitive edge,” [Chiarizia] said.

This article is a part of MuniNetworks. The original piece can be found here

AT&T Tries to End the Magic of One Touch Make-Ready


On the border of Kentucky and Indiana a fight is brewing as AT&T and Google Fiber have both announced plans to bring Gigabit Internet service to Louisville, Kentucky. Home to over half a million, the city could see major economic development with new ultra high-speed Internet access, but there’s a problem: the utility poles.

AT&T is suing the city over a “one touch make-ready” ordinance. On February 11, 2016, the Louisville Metro Council passed the ordinance in order to facilitate new competitors, i.e. Google Fiber.

Utility Poles: Key to Aerial Deployment

Make-ready is the shorthand for making a utility pole ready for new attachments. Although it may seem simple, this process is often expensive and time-consuming. To add a new cable, others may have to be shifted in order to meet safety and industry standards. Under the common procedure, this process can take months as each party has to send out an independent crew to move each section of cabling.

To those of us unfamiliar with the standards of pole attachment it may seem absurd, but this originally made sense. Utility poles have a limited amount of space, and strict codes regulate the placement of each type of cable on the pole. Competitors feel they have to fiercely guard their space on the pole and cannot trust other providers to respect their cables. Make-ready must involve coordination between multiple providers and the utility pole owners. For some firms, like AT&T, this is an opportunity to delay new competition for months.

“One touch make-ready” simplifies the entire process. A single crew only makes one trip to relocate all the cables as necessary to make the utility pole. Under the amended ordinance in Louisville, the company that wants to add a cable to the utility pole can hire a single accredited and certified crew, approved by the pole owner, which will accomplish the work much more quickly and at lower cost. Also, it must pay for needed fixes or any damages to the pole-owner’s equipment and inform the pole-owner of any changes within 30 days. Such “one touch make-ready” policies quicken network deployments by preventing delays inherent in coordinating many different entities.

Why Oppose It? Private Utility Pole vs. Public Right-of-Way

AT&T is suing to stop Louisville from implementing this new policy in an effort to stop the new competition from entering the market. Ostensibly, AT&T argues they filed the suit because they own many of the utility poles (an estimated 25-40%) in Louisville. The company argues that the municipality does not have the authority to regulate the utility poles and that this is an unjust seizure of property. In other communities where this is the case, the new companies that want to use the utility poles must sign a licensing agreement with AT&T.

AT&T’s argument, however, fails to recognize that local governments are required to manage the public Rights-of-Way (in layman’s terms, that is the land kept for the public interest near a roadway). The utility poles, although privately owned, serve a key function for connecting the public with needed services. That is why those utility poles are permitted on the public Right-Of-Way in the first place. Local governments, moreover, must have the authority to ensure that anything permitted on the public Right-Of-Way, such as utility poles, meet safety and industry standards in the quickest and most efficient way possible.

Further Resources on “One Touch Make-Ready”

Chris interviews Ted Smith, Chief Innovation Officer for Louisville in Community Broadband Bits Episode 193. Smith describes how “one touch make-ready” is quicker, safer, and more efficient to use the utility poles in the public Rights-of-Way to their full potential for the good of the community.

For more information on the importance of “one touch make-ready,” check out analyses from the Coalition for Local Internet Choice, Next Century Cities, and FTTH Council. For an in-depth analysis of Right-of-Way regulations, listen to Sean Stokes of Baller, Herbst, Stokes & Lide on Community Broadband Bits Podcast Episode 169.

This article is a part of MuniNetworks. The original piece can be found here

Report: Re-Member-ing the Electric Cooperative


by John Farrell, Matt Grimley & Nick Stumo-Langer

Electric cooperatives have been the backbone of the nation’s rural electrical system for more than 80 years. Their mission and business model now face more challenges than ever, from financial to contractual to basic member control. But the opportunity is equally great, with a chance for member-driven investment to power hundreds of local economies across the rural United States.

Download the Report

Executive Summary

Electric cooperatives face diverse challenges, from their power sources to member engagement. This report details those challenges and the tools that cooperatives are using to overcome them.

The Challenges

low turnout for rural electric cooperative board elections ILSRTied to Coal Power
Coal accounts for about 75% of energy generated by electric cooperatives, compared to just 32% for the United States’ entire electricity sector (U.S. Energy Information Administration, 2016).

Captured in Long-Term Contracts
Contracts with electricity suppliers extend for decades, sometimes past 2050, trapping locally-based electric cooperatives into increasingly expensive distant power plants and fossil fuel sources, while forbidding them from buying outside energy.

Losing Member-Owners.
Electric cooperative members have a right to vote for their boards of directors. But 70% of cooperatives have less than a 10% voter turnout, increasing the disconnection between the cooperative and its members.

The Solutions

Fortunately, the solutions lie in the best of the cooperative movement.

Finding Ways Out of Coal Power
A new ruling from the U.S. Federal Energy Regulatory Commission may allow electric cooperatives to purchase local power outside their contractual obligations, providing a novel level of flexibility for most cooperatives.

Using Clean Energy and On-Bill Financing
Electric cooperatives are finding new ways to enable energy savings for member-owners. They’re leaders in experimenting with community solar. A few are supporting the highest penetrations of rooftop solar in the nation. They’re creating cost-effective on-bill financing programs that help members save energy and money.

And Empowering Member-Owners
The member-owners of Pedernales Electric Cooperative, Beartooth Electric Cooperative, Jackson Energy Cooperative, and many others have made their cooperatives more accessible, more dedicated to renewable energy and energy efficiency, and more democratic than ever.

Cooperatives may face their greatest challenge since the inception of rural electrification in the 1930s, but with their members, they have the power to overcome.

 

Table of Contents

Acknowledgements

Introduction

The Challenges

     1. Coal-Powered, Under Fire
     2. A Contract Job
     3. Missing Members

The Opportunities

     1. Local Renewables Beat Dirty Power
     2. Energy Savings at Home
     3. Restoring Democracy

A Cooperative Future

Recent ILSR Publications

Footnotes


Acknowledgements

Thank you to all the cooperative board members, member-owners, and advocates for help and review. Thanks to Rebecca Toews and Nick Stumo-Langer for making sure more than 5 people read it. All errors are our own responsibility.

Contact John Farrell (jfarrell@ilsr.org) and Matt Grimley (mgrimley@ilsr.org) with questions. 

 

Introduction

Decades after cities lit the first electric lamps in the 1880s, most of the rural places of America were still dark. Urban utilities didn’t care for the expense of wiring farms, and it wasn’t until communities organized that electricity expanded to rural areas. Farmers in southwest Idaho, for example, formed a nonprofit in 1920 to build 256 miles of power lines to transfer power from a federal hydroelectric dam.1 In 1923, farmers near Granite Falls, Minn., made a cooperative to buy power from a nearby municipal utility. By 1930, there were 46 cooperatives in 13 states, but many still faced natural and economic obstacles, as well as opposition from investor-owned power companies.

In the 1930s, President Franklin Roosevelt launched numerous government program to combat the Great Depression and encourage economic growth. In 1935, he created the Rural Electrification Administration. The agency would provide long-term, 2% loans to nonprofit public entities to deliver affordable electricity across the nation. Within 6 years, there were 800 electric cooperatives in the United States, driven by member-owners that bought the same energy they produced collectively.2

Today, more than 900 electric cooperatives serve 42 million (mostly rural) Americans. These cooperatives cover 75% of the nation’s land mass. They deliver 11% of U.S. electricity sales on a network containing 42% of its of its distribution lines.

http://www.nreca.coop/wp-content/uploads/2013/07/ServiceTerritoryMap.gif

Image Source: NRECA3

Cooperatives have been the backbone of the nation’s rural electrical system for more than 80 years. Their mission and business model now faces more challenges than ever, from financial to contractual to basic member control. But the opportunity is equally great, with a chance for member-driven investment to power hundreds of local economies across the rural United States.

 

 

The Challenges

Electric cooperatives face diverse challenges. They rely heavily on coal power, with rising costs and risks as the nation eyes limits on carbon emissions. They are tied to this dirty and increasingly expensive power through ownership of coal assets (including power plants and mines) and by long-term purchase contracts, even as distributed solar, wind power, and energy storage are becoming more cost-effective. They serve 90% of the nation’s counties with “persistent poverty.”

Perhaps the largest barrier is the lack of member participation. As the National Rural Electric Cooperative Association (NRECA) wrote in its paper, “The Electric Cooperative Purpose,” the electric cooperative is not defined by its products and services. Its “bottom line” is the empowerment of its member-owners. How it engages its membership to deal with the problems of the 21st century will define its success or failure. In many electric cooperatives, members do not even know they are owners, and fail to participate.

Coal-Powered, Under Fire

The “distribution” electric cooperatives that sell power to customers don’t typically generate it themselves. They buy it, typically from generation and transmission cooperatives (G&T) that are owned by distribution cooperatives, or from federal power agencies, such as the Tennessee Valley Authority.

The generation and transmission cooperatives — the co-ops of co-ops — derive 75% of their energy from coal, and comprise 7 out of the 10 most carbon-intensive electric utilities in the nation (below, annotated by ILSR to denote G&T cooperatives).4

Image Source: Climate Desk5

Image Source: Climate Desk5

The trends that precipitated the cooperatives’ tie to coal include factors both in and out of their control.

As electric demand was expected to continue increasing almost exponentially in the 1960s and ‘70s, the drive toward economies of scale led the energy industry, mostly under the direction of investor-owned utilities, to construct larger and larger power plants. Many electric cooperatives banded together (in G&T cooperatives), and either sought to build their own large power plants, or were lobbied hard by the investor-owned utilities to buy a share of theirs, utilizing low interest financing through the Rural Electrification Administration to help fund the  project.

Additionally, during the 1970s and ‘80s, under threat of oil and gas scarcity, the federal government sought to limit natural-gas fired power plants and incentivize coal-fired power plants. Most utilities shifted their power plant builds to coal-fired or nuclear power plants. Today, as cooperatives and other utilities have continued to build and retrofit coal plants, about two-thirds of current cooperative generation remains from coal.

With looming carbon regulations, increasing consumer demand for rooftop solar and energy efficiency, and the competitive growth of cheap wholesale energy from wind, natural gas, and solar, G&Ts now face “stranded assets,” or having to retire uneconomical coal plants and their upgrades before they are completely paid off. For example, Seminole Electric, which rounds out the top 30 of carbon-intense utilities, says that 75% of its debt comes from building and retrofitting a single coal-fired power plants.6 Closing the facility would leave member cooperatives “burdened with paying off the debt but with no revenues to support the payments.”

In the face of economic challenges, NRECA and its electric cooperatives continue to fight against most federal and state rules that endorse clean energy or energy efficiency, or require a fair accounting of environmental and health costs from fossil-fueled generation.7 Some cooperatives still say climate change in quotes.8 In all, electric cooperatives engaged more than 1 million members to send in comments in opposition to the U.S. Environmental Protection Agency’s proposed carbon rules.9 One cooperative in Ohio supported the effort by collecting 2,246 comments from its members, more than twice the members that usually turn out for yearly board elections.10

Distribution cooperatives and members are now burdened with decisions made by their boards and management decades ago. Members today are between a rock and a hard place: running a coal-fired power plant is increasingly expensive, or seeing rates rise if they decide to shutter the power plant. As NRECA says, it will ultimately be the distribution cooperatives that face the member-owners’ ire, “and without proper management, the very existence of member-owned cooperatives could be in jeopardy.”11

A Contract Job

As mentioned previously, Electric cooperatives rarely supply their own power. According to NRECA, 65 to 70% comes from commitments secured through “all-requirements” contracts.

All-requirements contracts are used to protect the power supplier, G&T, or federal power agency from contract default. They restrict the electric cooperative from buying from outside sources. The G&T can set rates unilaterally, meaning that while electric cooperatives have a guarantee of power, it is not a guarantee of low cost power.

To say the balance works out in the supplier’s favor is an understatement. Rating agency Standard and Poor’s explains this in an evaluation of a Seminole Electric.12 One of the utility’s credit strengths is, “A captive retail market and the ability to set rates through take-and-pay, all-requirements wholesale power agreements with nine of 10 members through 2045.”

In New Mexico, the Kit Carson Electric Cooperative signed a long-term contract with Tri-State Generation and Transmission Association (a G&T) in 2000, a decision many now regret.13 Power costs then were about 3.6 cents per kilowatt-hour. While wholesale power costs are now 4 cents per kilowatt-hour, Kit Carson’s costs from Tri-State have risen to 8 cents per kilowatt-hour. Because Kit Carson’s all-requirements contract to purchase 95% of their energy from Tri-State, they cannot seek cheaper energy without violating the terms of the contract.

Kit Carson sought to exit their contract in the last year. Tri-State initially said it would require a $132 million exit fee from the cooperative, representing lost sales from Kit Carson’s departure. After negotiation, Tri-State latered lowered the exit fee to $37 million, and Kit Carson is deliberating how to move forward.

According to another NRECA publication, those electric cooperatives with all-requirements contracts “are generally prohibited from owning and using any utility-scale solar PV installation.”14 Elsewhere, the contracts block distribution electric cooperatives from purchasing energy from other suppliers, even small ones. The Delta-Montrose Electric Association was recently stopped by Tri-State’s 95% energy requirement from purchasing energy from a local hydroelectric facility.15

The situation is rather ironic, since Tri-State — like most G&T cooperative utilities — is owned by its distribution cooperatives like Kit Carson. In the past era of ever-rising electric demand, massive economies of scale in power generation, and few power supply alternatives, the G&T was a way to make the many small cooperatives competitive. But now, with flat or falling electricity use, smaller economies of scale with renewable energy, and competitive local alternatives, the bonds of solidarity have become more like chains.

Missing Members

Randy Wilson ran for the board of the Jackson Energy Cooperative in 2009, the first candidate to contest an election in the cooperative’s 71-year history.16 He ran on a platform of financing energy efficiency improvements on the electricity bill (known in energy policy circles as on-bill financing), and moving the local economy past its dependency on coal to alternative energy sources like solar.

He spoke on the local radio show, appeared on the front page of the newspaper, and talked with other member-owners in parking lots. But Wilson wasn’t surprised that he lost the election 740 votes to 151.

Less than two percent of members turned out to vote, but many more votes were cast with the use of “proxy” votes. Mostly used at corporate shareholder meetings, proxy votes allow one member to delegate his or her voting ability to another member. In the case of Wilson and Jackson Energy, the electric cooperative had collected hundreds of proxy votes from its members, then handed them to other members present at the annual meeting, telling them to vote as they saw fit (meaning, for the incumbent).

According to research from ILSR, Wilson’s story of low voter turnout was not unique. More than 70 percent of cooperatives have voter turnouts of less than 10 percent (including Wilson’s Jackson Energy Cooperative, which averages just under 3 percent turnout).

low turnout for rural electric cooperative board elections ILSR

Image Source: ILSR

The low voter turnout at so many rural electric cooperatives is an indication of a member-owner apathy, disenfranchisement, and — in a few cases — outright abuse. Barriers around incumbency, burdened with difficult-to-access meetings, elections, and voting requirements, are often too much for members to overcome, even if they wanted to.

“Most electric co-ops are boys’ clubs that re-elect the same people, that develop policies that favor their children or their buddies,” says Tom “Smitty” Smith of the consumer rights advocacy nonprofit Public Citizen. Most states, Smitty adds, still believe in the myth of member-led rule and don’t regulate electric cooperatives at all. Colorado passed legislation to democratize electric cooperative bylaws in 2010, but Texas’s similar efforts fell short after intense lobbying from the cooperatives.17

The following map illustrates state electric cooperative regulation as of 2008.

state oversight of electric cooperatives 2008 ILSR

Image Source: ILSR

Board members and electric cooperative employees are aging, representing another needs where membership can help fill in the gaps at the cooperative.18 According to Kauai Island Utility Cooperative board chair Jan TenBruggencate, “it would be convenient to believe that turnout is low because people believe we’re doing a good job… Higher voter turnout gives directors indication of which platforms are resonating with those members. It can be used to provide strategic direction for the cooperative. An engaged membership will recognize threats to the cooperative, and help bring resources to bear to solve problems.”

 

 

The Opportunities

Cooperatives across the nation are showing how to rely on each other and their members to create community-centric institutions that can overcome long-term reliance on dirty power sources and member disengagement.

Local Renewables Beat Dirty Power

With a recent ruling, the Federal Energy Regulatory Commission may have recently crashed one of the biggest gates to the cooperative clean energy party.19 For years, cooperatives have been hitched to wagon of large, coal-fired power generation through all-requirements contracts.

A few, like Delta-Montrose Electric Cooperative and other cooperatives went looking for local energy options. Unable to get resolution in direct negotiation, Delta-Montrose took Tri-State to the Federal Energy Regulatory Commission. The request was relatively simple: tell Tri State that it’s required to allow Delta Montrose to buy power from a proposed local hydroelectric power plant, even if it takes a bite out of their contract with Tri-State.

Although FERC didn’t accept Delta-Montrose’s rationale, they did accept their conclusion.

In requiring electric utilities to purchase renewable power from “qualifying facilities,” FERC said that the 1978 federal PURPA law supersedes the cooperative’s contract.20,21 Delta Montrose must purchase power from small renewable energy facilities in their service territory, and pay at least their own “avoided cost” of energy, e.g. the cost of the energy purchases avoided by the purchase from the qualified PURPA facility. This is a contested issue, with many utilities asserting that this is simply their wholesale cost to purchase a marginal kilowatt-hour of power. On the other hand, a FERC ruling in 2010 allowed that states could set avoided cost rates by technology, on the basis of the differing values of the renewable resources.22 FERC allowed that Delta Montrose could negotiate a power purchase rate.

The FERC ruling doesn’t allow Delta Montrose to develop more of its own clean energy resources outside its contractual limits, nor does it change where they get the balance of their energy supply: from Tri-State.

FERC noted two potential exceptions to the ruling that did not apply to this particular case. Some distribution cooperatives have transferred their PURPA purchase obligation to their wholesale supplier. In that case the power generator would have to sell to the wholesale supplier (e.g. Tri-State). Some utilities have received a waiver from their purchase obligation under PURPA, but only if there’s a competitive marketplace available for the generator to sell into other than the utility, an unlikely scenario for most cooperatives.23

Tri-State is now requesting FERC that it be allowed to levy a fee on Delta-Montrose for any lost revenues from the cooperative purchasing outside its contract. If they succeed, it will undermine the economics of buying local power for Delta-Montrose.24 However, FERC has opened the door for distribution cooperatives to purchase local power outside their contractual obligations, providing a novel level of flexibility.

Energy Savings at Home

Several cooperatives are adapting to the new era by bringing energy efficiency and renewable energy closer to home with the help of a federal program, and even a few cooperative ventures of their own.

The USDA’s Rural Utility Service’s Energy Efficiency & Conservation Loan Program allows rural utilities to borrow money at low rates – over 30 years at 3.3% – for energy efficiency and renewable energy improvements at their facilities or properties owned by customer-members it serves. The obligation to pay can be tied to the meter, allowing the energy savings and the financial obligation to pass from owner to owner of the property.

The bill-based financing can be particularly powerful at reaching disproportionately low-income cooperative members because the financing can be secured by the projected energy savings rather than a member asset (such as their home). It can also be provided without credit scoring that typically eliminates most low-income households from participation.

In 2014, the Rural Utility Service authorized as much as $6 billion in loans in 2015. What could $6 billion buy?25

$6 Billion for Rural Energy Efficiency would…

  • Save $32 billion in electricity costs for rural electric member-owners over 20 years
  • Create 81,000 rural jobs installing energy efficiency improvements
  • Provide enough power for 32 million homes for a year
  • Cut carbon dioxide emissions by 223 million metric tons

But it’s not just for energy efficiency. What if $6 billion was invested in renewable energy like solar power?

$6 Billion for Rural Solar Energy would…

  • Install 2,000 megawatts of solar power, 7 times more than is in the entire Midwest26
  • Save $5.3 billion in electricity costs for rural electric member-owners over 20 years
  • Create 14,000 rural jobs installing solar power
  • Provide enough power for 265,000 homes for a year
  • Cut carbon dioxide emissions by 1.8 million metric tons

The cooperatives can also make money offering this program. The USDA allows utilities to re-loan the money to individuals at up to 1.5% interest above their own borrowing rate of 3.3%. On loans of $6 billion, rural electric utilities would have a margin of $59 million per year re-loaning the money to their members.

Roanoke Electric Cooperative has already proven that on-bill financing works well for its membership. Using $6 million in financing from the U.S. Department of Agriculture, Roanoke Electric Cooperative’s Upgrade to $ave program enables members to benefit from debt-free, on-bill financing for home energy upgrades.27 The program will assist 1,000 members-owners over five years, generating savings for all participants and saving the cooperative more than $2 million through reduced energy demand. Households participating in Kentucky’s How$martKY program have lowered their annual energy use by average of 5,500 kWh, a savings of 30%, or $624 a year.28 Other cooperatives with on-bill financing programs report similar savings.

Source: ILSR

Image Source: ILSR

Electric cooperatives are also experimenting with community solar projects.29 The total is small — just 92 megawatts (MW), equivalent to only 0.18% of their overall power generation — but cooperatively-owned utilities are much more likely to experiment with collectively-owned generation than their municipal and for-profit peers. Below is a map identifying the 78 community solar projects throughout the country separated by ownership structure. The lion’s share is owned by electric cooperatives.

Utility Community Solar Projects

Image Source: ILSR

Some cooperatives have also added local renewable generation through their wholesale cooperative generation and transmission provider.30 Great River Energy in Minnesota added a 5 percent self-supply allowance to their members’ all-requirements contracts, anticipating the addition of resources such as community solar gardens. Great River then provided its members with solar, by building and financing up to twenty 20-kilowatt solar arrays in its members’ area. The projects are funded through a lease with CoBank. Each co-op is obligated to pay the G&T for the lease costs and for a buyout at the end of 10 years.

For many cooperatives, the ability to add community solar will be the first generation resource that qualifies under the 5 percent option. G&Ts in Wisconsin, Florida, and Michigan have tried other G&T-financed models for local solar development.

Other electric cooperatives utilize creative ownership structures to work around contract obligations, such as three cooperatives in Minnesota that actually sell solar energy back to their G&T.31 The cooperative leaders in renewable energy development often work without all-requirements contracts, relying on a mixture of partial-requirement contracts, wholesale market purchases, and energy project ownership instead. Farmer’s Electric Cooperative, which purchases half of its energy from the wholesale market, uses a homegrown feed-in tariff, community solar, and a green power purchasing program that have encouraged one-fifth of its membership to participate in renewable energy projects.32 The Kauai Island Utility Cooperative in Hawai’i now receives close to 40 percent of its energy from utility-owned and member-owned renewable resources while stabilizing sky-high electric rates.33 The Southern Maryland Electric Cooperative has built 5.5 megawatts of solar, and is proceeding on another 10 megawatt project, to go along with close to 1,000 of its members either owning or waiting to install some form of distributed generation. The New Hampshire Electric Cooperative, hitting their net metering cap that would limit rooftop solar, determined it was in their members’ best interest to permanently lift the cap. They lowered the compensation rate by 25 percent for residential customers (although they increased it for commercial customers) and will allow more rooftop solar development.34

Restoring Democracy

At Jackson Energy Cooperative, Randy Wilson’s landslide loss wasn’t for naught. Proxy votes were outlawed shortly after the election in 2009.35 On-bill financing was instituted at the cooperative in 2010 as part of a pilot program with the Mountain Association for Community Economic Development. In 2013, an incumbent board member was defeated by a newcomer.

Other cooperatives have also reformed their ways through member-focused efforts. The Pedernales Electric Cooperative survived a scandal, and emerged with reform candidates on its board of directors. A member bill of rights was passed, opening up the elections, nominations, and giving members full access to records and meetings for the first time. The new board members formalized goals for 30 percent renewable energy in power capacity by 2020 and new energy efficiency savings.36

In 2010, community advocates of the Beartooth Electric Cooperative in Montana proposed bylaw revisions after bad management decisions over the coal-fired Highwood Generation Station were exposed.37 As the Highwood deal failed, Beartooth’s G&T cooperative went bankrupt. Beartooth successfully exited the G&T as a result of the settlement, and just last year saw their first rate decrease in a decade. According to the Northern Plains Resource Council, Beartooth is now one of the most transparent and member-responsive cooperatives in the state.

Cooperative members across the nation are demanding change and organizing. Groups such as Kentuckians for the Commonwealth have suggested a cooperative members’ bill of rights.38 Georgia Watch, a consumer protection advocacy group, even made a helpful study and checklist to determine if an electric cooperative is truly democratic.39 The Northern Plains Resource Council has made a chart for member-owners to easily see how their electric cooperative is performing (below).

 

 

A Cooperative Future

Electric cooperatives stand at the crossroads.

The heavy reliance on outsourcing their local authority has resulted in economic strains, tension between the local and generation and transmission cooperatives, and member disillusionment. At its worst, it has placed cooperatives in a nearly untenable net of long-term obligations for dirty and increasingly expensive power or in a scandal of abused member trust.

Fortunately, the solution lies in the best of the cooperative movement. Delta-Montrose and other distribution cooperatives are re-taking some of their local authority to emphasize clean and affordable local power generation. Roanoke and other cooperatives are providing low-cost financing to help members reduce energy costs and make the grid more efficient. Beartooth is modeling transparency and member engagement toward more effective stewardship of cooperative resources.

Cooperatives may face their greatest challenge since the inception of rural electrification in the 1930s, but with their members, they have the power to overcome.

 


 

Recent ILSR Publications:

Mighty Microgrids by Matt Grimley and John Farrell, February 2016

Independent Business Report by Stacy Mitchell and Olivia Lavecchia, February 2016

SandyNet Goes Gig: A Model for Anytown, USA by Chris Mitchell, November 2015

Building Local Equity: ILSR’S Impact in 2015 by Jen Foy and Stacy Mitchell, November 2015

Hawai’i at the Energy Crossroads by Matt Grimley and John Farrell, July 2015

Comcast’s Big Gig Rip-Off by Hannah Trostle and Chris Mitchell, July 2015

Public Rooftop Revolution by John Farrell and Matt Grimley, June 2015

Beyond Utility 2.0 to Energy Democracy by John Farrell, December 2014

Walmart’s Dirt Energy Secret by Stacy Mitchell and Walter Wuthmann, November 2014

Correcting Community Fiber Fallacies by Chris Mitchell, October 2014

Walton Family Undermining Rooftop Solar by Stacy Mitchell, October 2014

ILSR Energy Democracy Initiative Logo - Stacked

Since 1974, the Institute for Local Self-Reliance (ILSR) has worked with citizen groups, governments and private businesses to extract the maximum value from local resources.

This work is licensed under a Creative Commons Attribution-Non-Commericial-ShareAlike 4.0 International License by the Institute for Local Self-Reliance. Permission is granted under a Creative Commons license to replicate and distribute this report freely for noncommercial purposes.

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Photo Credit: Clean Energy Resource Team via Flickr (CC BY-NC-SA 2.0 license)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Footnotes:

  1. Doyle, Jack. Lines Across the Land. Environmental Policy Institute: Washington D.C. 1979.
  2. Leitman, Michael; Olivier, Dave; Schloss, Zach and Tucker, Russell. “Affordable Electricity and Economic Development: The Role of Electric Cooperatives in the 21st Century.” National Rural Electric Cooperative Association. 2014. (Accessed March 21, 2016). http://www.nreca.coop/wp-content/uploads/2014/09/Final_NRECA_Affordable_Electricity_White_Paper.pdf.
  3. “America’s Electric Cooperative Network.” National Rural Electric Cooperative Association. July 2013. (Accessed March 21, 2016). http://www.nreca.coop/wp-content/uploads/2013/07/ServiceTerritoryMap.gif.

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  4. Breakman, Paul M. “Post-Technical Conference Comments of the National Rural Electric Cooperative Association, Docket No. AD14-8-000.” Federal Energy Regulatory Commission. Winter 2013. (Accessed March 21, 2016). https://www.nreca.coop/wp-content/uploads/2014/05/NRECAPostTechnicalComments_AD14_8.pdf.
  5. McDonnell, Tim. “America’s Dirtiest Power Companies, Ranked.” ClimateDesk. July 14, 2015. (Accessed March 21, 2016). http://climatedesk.org/2015/07/americas-dirtiest-power-companies-ranked/.
  6. Maize, Kennedy. “Seminole Electric Cooperative Sees Big Challenges from Clean Power Plan.” Power Magazine. December 1, 2015. (Accessed March 22, 2016). http://www.powermag.com/seminole-electric-cooperative-sees-big-challenges-from-clean-power-plan/?pagenum=5.
  7. Kuckro, Rod. “Coal-heavy electric cooperatives take hard line on EPA Clean Power Plan.” E & E Publishing, LLC. December 15, 2014. (Accessed March 22, 2016). http://www.eenews.net/stories/1060010539.
  8. Chippewa Valley Electric Cooperative. “2014 Annual Meeting Review.” April 2014. (Accessed March 22, 2016). http://www.cvecoop.com/news/apr2014.pdf.
  9. Rural Electric Convenience Cooperative. “One Million Comments Sent to EPA.” June 2014. (Accessed March 22, 2016). http://www.recc.coop/action-coop-message/.
  10. Lorain-Medina Rural Electric Cooperative. “LMRE Submits $4,246 Letters to EPA.” 2015. (Accessed March 22, 2016). http://www.lmre.org/content/lmre-submits-4246-letters-epa.
  11. National Rural Electric Cooperative Association. “The Electric Cooperative Purpose: A Compass for the 21st Century.” 2013. (Accessed March 22, 2016).

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  12. Panger, Jeffrey M. and Murphy, Peter V. “Putnam County Development Authority, Florida Seminole Electric Cooperative, Rural Electric Coop.” Standard & Poor’s Ratings Services. January 8, 2016. (Accessed March 22, 2016). http://www.seminole-electric.com/pdf/news/releases/sp.pdf.
  13. Adang, Peter J. “January 2016 Board Meeting.” Kit Carson Electric Cooperative. January 26, 2016. (Accessed March 22, 2016). http://peteradang.blogspot.com/.
  14. National Rural Electric Cooperative Association. “Cooperative Utility PV Field Manual.” U.S. Department of Energy. February 2016. (Accessed March 22, 2016). http://www.nreca.coop/wp-content/uploads/2015/02/NRECA-Cooperative-Utility-Field-Manual-Volume-I-Final.pdf.
  15. Farrell, John. “Did FERC Just Smash the Biggest Roadblock to Clean, Local Power for Electric Co-ops?” The Institute for Local Self-Reliance. September 28, 2015. (Accessed March 22, 2016). https://ilsr.org/did-ferc-just-smash-the-biggest-roadblock-to-clean-local-power-for-electric-co-ops/.

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  16. Grimley, Matt. “Just How Democratic are Rural Electric Cooperatives?” The Institute for Local Self-Reliance. January 13, 2016. (Accessed March 22, 2016). https://ilsr.org/just-how-democratic-are-rural-electric-cooperatives/.
  17. Though there are others, Pedernales Electric Cooperative remains the most salient scandal of the electric cooperative world. Members couldn’t get basic information on cooperative operations from their board members, who rewarded themselves lavishly––over $1 million in annual compensation for the 17 member board––but provided limited oversight of cooperative operations. A member-led lawsuit led to the general manager being convicted of felony theft and money laundering. At Choctaw Electric Cooperative in Oklahoma, the board of trustees raised member bills by as much as $150 per year, gave the CEO a gift of $2.1 million and allowed him to use cooperative heavy equipment for personal use. These are just a few horror stories that relate the peril of low member engagement.
  18. Kahn, Michael W. “Long-term Workforce View Urged for Co-ops.” Electric Co-op Today. January 18, 2016. (Accessed March 22, 2016). http://www.ect.coop/industry/trends-reports-analyses/long-term-view-urged-for-co-op-of-the-future/88310.

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  19. Federal Energy Regulatory Commission. “Delta-Montrose Electric Association Docket No. EL15-43-000.” June 18, 2015. (Accessed March 22, 2016). https://www.ferc.gov/whats-new/comm-meet/2015/061815/E-14.pdf.
  20. Federal Energy Regulatory Commission. “What is a Qualifying Facility?” February 3, 2012. (Accessed March 22, 2016). http://www.ferc.gov/industries/electric/gen-info/qual-fac/what-is.asp.
  21. “Public Utility Regulatory Policies Act.” Wikipedia. (Accessed March 22, 2016). https://en.wikipedia.org/wiki/Public_Utility_Regulatory_Policies_Act.
  22. Stanton, Tom. “State Utility Solar Energy Programs: Recommended Approaches for Growing Markets.” National Regulatory Research Institute. July 2013. (Accessed March 22, 2016). http://cl.ly/0m0d3K2U0s07. Pages 36-37.
  23. Burns, Robert E. and Rose, Kenneth. “PURPA Title II Compliance Manual.” American Public Power Association. March 2014. (Accessed March 22, 2016). http://www.publicpower.org/files/PDFs/PURPA%20Title%20II%20Manual%20Final_w-cover.pdf. Pages 61-62.
  24. Prendergast, Tony. “FERC case re DMEA – Tri State renewable generation dispute.” Cooperative Leadership Network. March 8, 2016. (Accessed March 22, 2016). http://cln.coop/member-network/discussions/ferc-case-re-dmea-tri-state-renewable-generation-dispute.

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  25. Farrell, John. “A $6 Billion Opportunity for the Rural Energy Economy.” The Institute for Local Self-Reliance. July 25, 2014. (Accessed March 22, 2016). https://ilsr.org/6-billion-opportunity-rural-energy-economy/.
  26. Farrell, John. “Midwest Solar Market: Hot or Not?” The Institute for Local Self-Reliance. May 18, 2014. (Accessed March 22, 2016). http://ilsr.org/midwest-solar-market-hot-not/.
  27. Roanoke Electric Cooperative. “Sharing Insights of Our Experience with the EECLP Program.” February 2016. (Accessed March 23, 2016). http://www.roanokeelectric.com/usda-eeclp.
  28. Environmental and Energy Study Institute. “On Bill Financing for Co-ops.” (Accessed March 23, 2016). http://www.eesi.org/obf/coops.
  29. Stumo-Langer, Nick. “Are Rural Electric Cooperatives Driving or Just Dabbling in Community Solar?” The Institute for Local Self-Reliance. March 11, 2016. (Accessed March 23, 2016). https://ilsr.org/rural-electric-and-cooperatives-community-solar/.
  30. National Rural Electric Cooperative Association. “Solar Case Studies.” 2015. (Accessed March 23, 2016). http://www.nreca.coop/wp-content/uploads/2015/08/solar-case-studies.pdf.
  31. Freeborn Mower Cooperative Services. “Local Electric Cooperatives Make History With Minnesota Three.” August 6, 2014. (Accessed March 23, 2016). http://www.fmcs.coop/index.php/news-events/news/231-local-electric-cooperatives-make-history-with-minnesota-three.
  32. Farrell, John. “The #1 Solar Utility is in…Iowa?” CleanTechnica. February 18, 2014. (Accessed March 23, 2016). http://cleantechnica.com/2014/02/18/1-solar-utility-iniowa/.
  33. Kaua’i Island Utility Cooperative. “Kaua’i Renewable Energy Projects.” (Accessed March 23, 2016). http://website.kiuc.coop/content/renewable-energy-projects.
  34. Sanders, Bob. “Hitting the cap.” New Hampshire Business Review. March 3, 2016. (Accessed March 23, 2016). http://www.nhbr.com/March-4-2016/Hitting-the-cap/.

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  35. Jackson Energy Cooperative. “Case No. 2013-00219.” 2013. (Accessed March 23, 2016). http://psc.ky.gov/pscecf/2013-00219/markkeene@jacksonenergy.com/08302013073256/JacksonEnergy_R-PSCDR1_083013.pdf.
  36. Pedernales Electric Cooperative. “PEC Pursuing Renewable Energy in Cost-Effective Manner.” July 24, 2014. (Accessed March 23, 2016). http://www.pec.coop/Home/LocalInvolvement/Newsroom/PressReleases/2014/07/24/pec-pursuing-renewable-energy-in-cost-effective-manner.
  37. Northern Plains Resource Council. “Rural Power Campaign.” February 2016. (Accessed March 23, 2016). https://www.northernplains.org/wp-content/uploads/2016/02/Co-op_reform_-factsheet_2016-01-27.pdf.
  38. Kentuckians for the Commonwealth. “Shelby Energy Proposed Members’ Bill of Rights.” January 2016. (Accessed March 23, 2016). https://www.kftc.org/sites/default/files/docs/resources/shelbyenergyproposedmembersbillofrights.pdf.
  39. Georgia Watch. “Georgia Electric Membership Cooperatives: IRC §501(c)(12) Compliance and Transparency.” November 2015. (Accessed March 23, 2016). http://www.georgiawatch.org/wp-content/uploads/2015/11/GEORGIA-EMCs_Report-on-IRS-Compliance-and-Transparency.pdf.

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Watch: Mighty Microgrids Webinar Recording


On Tuesday, March 15th, the Institute for Local Self-Reliance hosted a webinar titled “Breaking the Macro-Barriers to Microgrids.” The webinar was led by John Farrell, the Director of ILSR’s Energy Democracy initiative and Matt Grimley, the author of ILSR’s report, Mighty Microgrids.

The webinar was broken into two parts. The first part consisted of a presentation by John Farrell introducing the structure of the microgrids and how the enable a larger shift of the grid towards energy democracy. The second part consisted of an interview between John and Matt, where Matt answered common misconceptions around microgrids as well as fielded questions from the audience.

The PDF of the slides are available here and the video of the webinar is available below.

Pursuing Grid Modernization in a Monopoly Model


How can a state modernize its electric system when it’s in the hands of vertically integrated monopolies? We offer some thoughts via its comments on a Grid Modernization docket being reviewed by the Minnesota Public Utilities Commission.

Background: the grid modernization docket is a relatively new requirement, asking the state’s largest investor-owned utility to explain how it will make investments in the distribution system to accommodate more decentralized energy generation and also plan effectively for resources on the distribution level in concert with its traditional large-scale power generation.

In the docket, Xcel Energy requested cost recovery for two new projects, an advanced distribution management system (mostly software) and a solar plus energy storage project. Our comments follow, but highlight two issues: 1) how can a ratepayer-funded investment in the distribution grid also provide more information to those customers about where to most effectively build new distributed generation? 2) how do we balance the utility’s desire to learn about distributed energy (on the ratepayer dime) with an increasing need to learn how to manage relationships with third parties as the grid becomes more democratic?


 

The Advanced Distribution Management System

We support the utility’s request for certification of the Advanced Distribution Management System (ADMS) because we believe it can and should aid the utility in providing transparency for customers interested in the choice to manage their energy costs through deployment of distributed energy resources. In particular, we believe the Commission should certify the ADMS with the intention that it be one of the tools used by Xcel to provide publicly available information about distribution system capacity. This would extend the ADMS benefits to:

  • Direct distributed energy resource deployment into areas of the distribution grid with the lowest interconnection costs and highest value opportunity (such as the Belle Plaine substation location).
  • Reduce administrative costs to the utility responding to developer requests for preliminary interconnection information.

We also recommend that the Commission direct Xcel to make substation hosting capacity analysis publicly available as a condition of the ADMS project approval.  This information, combined with published interconnection queues, will save ratepayer resources through the efficient deployment of distributed generation.

Note: the statement in bold above is a key issue of making a utility’s electric grid more transparent for investment by individual or business customers in power generation. Without such data, distributed energy projects have much higher risk of acquiring a site for a solar or wind project that becomes infeasible because of grid constraints.

The Belle Plaine Solar and Storage Project

We also support certification of the storage and solar project in Belle Plaine but believe the Commission should carefully weigh two issues with the proposal.

The first is the relative value of utility control against the experience of managing third party relationships on the distribution system that are increasingly likely as customers have more choice in distributed energy solutions. As Xcel and other commenters have noted, the process of grid modernization takes place in an environment of rapidly expanding options for customers for energy services, from on-site power generation to energy storage to shared solar. Xcel is increasingly going to be interfacing with third party providers of service, even if Minnesota retains a system of vertically integrated monopolies. Requiring [a request for proposal] for this solar and storage system may provide valuable experience to the utility in managing third party resources on the distribution system. Contractual language between the third party and Xcel could accommodate the utility’s desire for control over and information about the system operation.

The second issue is the access to system operation and cost-benefit data as a condition of cost recovery. The valuable information provided by this pilot project should be publicly available in service to several outcomes:

  • Important context for the state’s value of solar formula, including how and how much energy storage can enhance that value.
  • Illustrating potential value streams for energy storage in the Minnesota market, including currently available markets (e.g. MISO) and opportunities for pricing these values on the distribution grid.
  • Providing an illustration of how distributed energy resources can alleviate capacity constraints on the distribution system (and how to reflect that value in publicly available data on distribution hosting capacity)

Public availability of this information should be required regardless of the ownership structure of the solar and storage project, either as a contractual obligation for a third party or a contingent for cost recovery by the utility.

Distribution Study

Minn. Stat. §216B.2425, Subd. 8 requires that utilities operating until a multi-year rate plan to  “conduct a distribution study to identify interconnection points on its distribution system for small-scale distributed generation resources and (to) identify necessary distribution upgrades to support the continued development of distributed generation resources”.  If Xcel’s multi-year rate plan is approved, the Commission should direct the Company to file a publicly-available distribution study with hosting capacity analysis at the earliest reasonably possible date after the completion of the rate case, and no later than November 1, 2017 as required by  Minn. Stat. §216B.2425.

Note: this last item re-iterates one from the ADMS section: if utility customers pay for a system to make the distribution system easier to manage in an era of decentralized energy, they should have access to information about how to best invest their own money in reducing their energy costs in a way most compatible with the grid.

This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter or get the Democratic Energy weekly update.

Photo credit: Tyler Wilson via Flickr (CC BY-NC-SA 2.0 license)

Strength in Numbers, March 2016


12885780_10154019951998718_948392451878665272_oNEW! “Love Local” Decals and Window Clings Our newest creation provides an effective and economical tool to engage residents as well as businesses. These new stickers (2.5″ x 9.25″) are offered in both adhesive and static cling vinyl options (ideal for windows of cars, businesses or homes). Get yours here or inquire for wholesale pricing […]

Webinar: Crowdfunding for Community Composting


Please register for Webinar March 22, 2016 | Crowdfunding for Community Composting on Mar 22, 2016 2:00 PM EDT at:

https://attendee.gotowebinar.com/register/9110286539296736769

MORE INFORMATION:

Crowdfunding and worker-owned cooperatives are just two of the models that have proven to work for community composters around the United States.

Please join Lor Holmes with CERO, and Dustin Fedako with Compost Pedallers for a deeper dive into crowdfunding for community composters.

Business planning and financing were among the hot topics community composters identified. In less than a year, CERO raised over $350,000 via nearly 100 community investors. The Compost Pedallers raised $25,000 on Indiegogo from336 backers. They’ll share tips based on their own lessons learned, and attendees will come away with a realistic idea of what to expect in the preparation, launch, live campaign, and reward fulfillment phases of a crowdfunding campaign.

 

 

CCC2016_Holmes Lor headshot

Lor Holmes is CERO Cooperative’s General Manager.

She leads business development, and like all of the CERO worker-owners,

Lor shares a passion for environmental and social justice, sustainable

economic development and democratic models for community ownership.

 

 

 

 

 

 

 

 

CCC2016_Fedako_Dustin_Compost PedallersDustin Fedako is the co-founder of the Compost Pedallers in Austin, Texas

and has worked as CEO of the company since its founding in 2012.

Under Dustin’s leadership, the Compost Pedallers have moved

over half a million pounds of organics by bike, and established themselves as

leaders in the pedal powered revolution and the community composting movement.

 

 

 

NEW Special Guest!

Ethany Uttech headshot jpegEthany Uttech  with Ioby.org will join our webinar discussion as well!

Ioby is a nationwide, nonprofit crowdfunding platform that provides one-on-one coaching to leaders of projects that make communities healthier and more sustainable. They’ll share examples of past successfully funded projects and some top tips for nonprofits or community groups looking to build a local base of support through crowdfunding.

Ethany Uttech focuses on partnership building and outreach to connect with new ioby Leaders across the country. She never tires of meeting people who are dedicated to making positive change in themselves and in the world, and is particularly inspired by projects that increase neighborhood sustainability and livability in tangible ways.

Before joining the ioby team, Ethany led Brooklyn Arts Council’s grant-giving and professional development programs for seven years, and worked in a variety of organizational development, project management, and teaching capacities. She is also a civically engaged resident of Brooklyn and a long-time volunteer activist in the arenas of social and environmental justice.

 

 

The event is organized by ILSR and BioCycle.

Race and Democracy in Michigan


In 2013, 52% of all African-Americans living in Michigan had their voting rights taken away by  Emergency Managers, compared to only 2% of whites. In November 2014 a federal judge concluded that the Emergency Managers law had been applied in a racially discriminatory manner. That law allows the state to appoint a manager to unilaterally govern a city. His decisions pre-empt and supersede decisions by city councils or mayors.  In a November 2012 referendum, the citizens of Michigan had voted to overturn the 2011 law but within weeks the state legislature enacted an almost identical law immune to the popular will.

Some argue the exercise of undemocratic authority was a key to the widespread lead poisoning of residents in the city of Flint.

 

(Photo: Jake May/ MLive.com)