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Push Grows to Privatize Municipal Power Boards in TN

The Johnson City Power Board is asking the city for permission to become a private entity. Changes in TVA rates and current state laws may prompt more municipal power boards to do the same. (Morguefile.com)
The Johnson City Power Board is asking the city for permission to become a private entity. Changes in TVA rates and current state laws may prompt more municipal power boards to do the same. (Morguefile.com)
August 11, 2016

JOHNSON CITY, Tenn. – There are 60 municipal power companies in Tennessee, but that number could decrease as power boards look to survive in a changing marketplace.

This month the Johnson City Power Board presented at a public meeting reasons for separating from the city.

Jeff Dykes, the JCPB’s executive director, cites changing rate structures from the Tennessee Valley Authority and the inability to form public and private partnerships because of state laws as reasons for the change.

"There are additional ones in the state that are looking at it now, and for the same reasons – the opportunity to do ventures with other folks and really to diversify their companies," he states.

If the Johnson City Power Board becomes its own entity, Dykes says it then could pursue solar farm partnerships, and even look at offering Internet and other services to customers.

If approved, the Power Board would remain publicly owned.

Opponents of privatization say it could raise electric rates and limit public access to information.

Consultant Joel Yudken, who has studied the ramifications of privatizing utilities, says it's important for any city to understand the full picture of what separating from a utility will mean for customers.

"There's a number of questions,” he points out. “Economic and workforce questions and financial questions that I think really are fairly complex and I would imagine they would have to do some kind of analysis. "

Other municipal boards, including the Tullahoma Utilities Board, are considering similar separations.

Dykes says it's indicative of a trend across the state.

"We are in a very changing marketplace,” he explains. “So, this really is an opportunity for us to go out there and do some things that will bring benefit to the customer and really look to stabilize rates. "

Dykes says even though the utility would be separated from the city, it would be subject to the same oversight as it has now, with current board members transferring over to the private utility, if city leaders approve the separation.


Stephanie Carson, Public News Service - TN