Municipalization
It is also important to acknowledge that the monopoly power of many incumbent utility providers means that they have strong financial and political resources to resist municipalization.
The first took place in the late nineteenth and early twentieth century, when municipalities in many developed countries acquired local private providers of a range of public services.
The driving reason in most cases was the failure of private providers to sufficiently expand service provision outside wealthy parts of urban areas.
The second wave took place in the early 1990s, when after the end of the communist states in eastern Europe state-owned companies in many public service sectors were broken up and transferred to municipal control.
This generally ends de facto the county's own home rule, which in most states allows it to act as the municipal service provider in those unincorporated areas.
In another, larger example, Fulton County, Georgia, which includes the city of Atlanta, is currently undergoing full municipalization.
Timeline of Significant Events: 1980s: The investor-owned Long Island Lighting Company (LILCO) faces near bankruptcy catalyzing the effort to municipalize led by then Governor Mario Cuomo.
[2] 1998: Governor George Pataki led the effort to take over LILCO's entire system due to customers still facing high utility prices.
[2] Results: The effort has been largely successful given that customer approval has improved to over 90 percent satisfaction level and LIPA's rates are no longer the highest in the New York Metro Area.
Timeline of Significant Events: 2002: The Boulder City Council passed Resolution 906, committing the community to reducing its greenhouse gas emissions to the target established by the Kyoto Protocol.
[6] 2005: In response to having difficulty meeting the goals of Resolution 906 and wanting more energy decision-making control the city created a task force to explore municipalization as an option for faster innovation capacity.
The study also found that this would make the utilities more aligned with the needs of the community and would allow any excess energy revenue to be reinvested in Boulder."
In the last four years, Boulder has been involved in legal proceedings with Xcel at the local and state levels, and courts have ruled both in favor of and against municipalization.
[8] Timeline of Significant Events: 1990s: Angered by power outages and rate hikes San Franciscans engaged in various attempts to municipalize their electricity.
"[2] Once the utilities have been acquired, local governments face the steep costs of financing the transition and developing the expertise to run a comprehensive system of electricity distribution as well as, in some cases, generation and transmission.
[5] The transaction costs are high, because cities must borrow to pay the IOUs for the power lines, they must develop the expertise and ability to manage a LTS, and they often face years of battles in courts and in elections due to challenges from the IOU.
Time‐varying rates can have considerable impact by "encouraging many customers to make small adjustments to the timing of their energy consumption, resulting in a flatter load curve for the entire system.
The acquisition cost for the municipalized infrastructure was in some cases significantly higher than what was being recovered by the IOU, putting immediate and long‐lasting upward pressure on rates.
Operationally, IOUs often have economies of scale that can lead to lower legal, management, and purchasing costs per unit of energy.
