Municipalization
Drawing on decades of industry experience, Brattle’s experts have observed that while numerous municipalization initiatives have been launched across the United States over the past 25 years, fewer than 10% have ultimately resulted in the creation of a lasting municipal electric utility. The most recent successful municipalization occurred more than a decade ago and was resolved through a settlement to acquire assets from the existing utility rather than through the extensive litigation that characterizes most larger municipalization efforts.
Both during planning and after acquisition, a newly established municipal utility often faces the same early-stage challenges as other new enterprises – most notably, financial uncertainty and whether the community’s original objectives will be realized. For communities evaluating municipalization, it is critical to assess the time, costs, and risks involved, including financial, operational, and governance considerations associated with acquiring and operating an existing utility’s assets.
Brattle’s experts have advised clients on all stages of municipal utility formation, from assessing the assets proposed for acquisition to evaluating the broader economic implications. Drawing on our experience and historical perspective, we help clients weigh the benefits and risks of municipal ownership through financial models that compare the expected costs and outcomes of forming a city-owned utility versus maintaining existing service arrangements.
Our expertise includes:
- Providing context on state-specific rules and regulations governing municipalization, including historical development and implications
- Researching potential acquisition and operational costs associated with a potential new municipal utility to support feasibility analyses
- Assessing the electric transmission and distribution system to identify potential challenges related to system separation and reintegration
- Conducting economic analyses, including comparing, modeling, and testing key assumptions to evaluate the financial feasibility of municipalization
- Identifying areas of agreement and disagreement among stakeholders to highlight key value drivers
- Developing clear and effective internal and external communication materials based on the findings of our evaluations for key stakeholders
- Preparing presentations for political, business, and other community leaders and stakeholders, as well as developing public comments and outreach materials
