Merits of public vs. private utilities debated


YANKTON, SOUTH DAKOTA NorthWestern Corp. of Sioux Falls has come out of bankruptcy with healthy stock prices, but some South Dakota cities and power companies have stated an interest in buying NorthWestern Energy's assets and making a public power utility.

NorthWestern's stock was trading at more than $28 a share recently.

In remarks to the Yankton Rotary Club, the company's chief financial officer, Brian Bird, said he's sure NorthWestern management has no interest in selling.

"I would just say that, from my perspective, there were some folks that thought we wouldn't trade as well coming out of bankruptcy," he said. "Obviously, I'm sure they're disappointed with where our share price is. Our job is not to worry about that. Our job is to continue to worry about the business and make it as profitable as we can for our existing shareholders."

Last year, the South Dakota Public Power Authority was formed to look into buying NorthWestern's assets after it emerged from bankruptcy.

Bird said the process of forming a public power utility would be too expensive and lengthy. Plus, he said, millions of tax dollars would be lost and public support and operating expertise would be lacking.

Yankton Mayor Curt Bernard, chairman of the South Dakota Public Power Authority, said he's neither for nor against a public power agency. But he took issue with some of NorthWestern's stands.

Bernard said the expertise in operating a public power entity would be handled by hiring NorthWestern's employees.

"The experts are in the employee base," he said. "And, frankly, cities run water treatment plants and sewer treatment plants. This is not rocket science. It's been done. With the asset of having an excellent group of employees in existence at NorthWestern, it's entirely possible."

He said some cities contributed money about a year ago to investigate buying NorthWestern assets. "That was a defense against the potential of bankruptcy failure. It was an insurance policy. Fortunately, we haven't had to exercise that.

"It's like shopping local: If you own your own electrical plant, the 8-15 percent return on your investment stays locally. Any growth you do stays locally, as well. It doesn't get shipped out elsewhere."

Linda Wittrock, NorthWestern's director of community relations and economic development, said shareholders bear all the risk in a private utility, while the customers shoulder the risk in a public power arrangement.

"Additionally, privately owned utilities have an independent authority voted in by the customers (the Public Utilities Commission) which overlooks the rates. With public power, they can raise the rates whenever they want and the customers have no say."

NorthWestern will do what its investors tell the firm to do, Wittrock said.

"We've increased the capital budget and turned it around fast. We told our employees we're going to come back strong, and we're doing that. The best way to build our strength is true performance. A lot of customers lost trust in us because of what we've been through. We understand that."

Associated Press

Electricity News
Product Info Centres
Electrical Transformers
Electrical Test Equipment
Electrical Safety/Arc Flash
Electrical Safety Forum
Arc Flash Clothing
Renewable Energy
Alternative Energy
Other Options

Subscription

 
Training Courses

Canadian Fire Alarm and Life Safety Systems - Design, Installation And Testing

  • May 30-31, 2016 - Richmond, BC
  • June 1-2, 2016 - Edmonton, AB
  • June 16-17, 2016 - Winnipeg, MB
  • June 20-21, 2016 - Mississauga, ON

2015 Electrical Code Update Training

  • May 30-31, 2016 - Winnipeg, MB
  • June 1-2, 2016 - Mississauga, ON
  • June 13-14, 2016 - Edmonton, AB
  • June 15-16, 2016 - Richmond, BC
  • June 27-28, 2016 - Halifax, NS
  • June 29-30, 2016 - St. John's, NL
  • October 4-5, 2016 - Victoria, BC
  • October 6-7, 2016 - Richmond, BC
  • October 11-12, 2016 - Edmonton, AB
  • October 13-14, 2016 - Winnipeg, MB
  • October 31-November 1, 2016 - Saskatoon, SK
  • November 22-23, 2016 - Ottawa, ON
  • November 24-25, 2016 - Mississauga, ON

Electrical Safety For Qualified Electrical Workers

  • June 20, 2016 - St. John's, NL
  • June 23, 2016 - Halifax, NS
  • September 12, 2016 - Richmond, BC
  • September 14, 2016 - Edmonton, AB
  • September 19, 2016 - Saskatoon, SK
  • September 20, 2016 - Winnipeg, MB
  • September 22, 2016 - Mississauga, ON

2-Day Basic and Advanced Electrical Safety Training Workshop

  • June 20-21, 2016 - St. John's, NL
  • June 23-24, 2016 - Halifax, NS
  • September 12-13, 2016 - Richmond, BC
  • September 14-15, 2016 - Edmonton, AB
  • September 20-21, 2016 - Winnipeg, MB
  • September 22-23, 2016 - Mississauga, ON

Advanced Electrical Safety Training Workshop

  • June 21, 2016 - St. John's, NL
  • June 24, 2016 - Halifax, NS
  • September 13, 2016 - Richmond, BC
  • September 15, 2016 - Edmonton, AB
  • September 21, 2016 - Winnipeg, MB
  • September 23, 2016 - Mississauga, ON

Emergency Generators/UPS/ Battery Technologies

  • September 8-9, 2016 - Mississauga, ON
  • September 12-13, 2016 - Winnipeg, MB
  • September 14-15, 2016 - Saskatoon, SK
  • September 19-20, 2016 - Edmonton, AB
  • September 21-22, 2016 - Richmond, BC

MV-HV Industrial Electrical Maintenance/Safety Practices

  • October 17-18, 2016 - Mississauga, ON
  • October 19-20, 2016 - Winnipeg, MB
  • October 24-25, 2016 - Saskatoon, SK
  • October 26-27, 2016 - Edmonton, AB
  • November 3-4, 2016 - Richmond, BC

Electrical Grounding For Industrial Power Systems

  • November 1-2, 2016 - Richmond, BC
  • November 3-4, 2016 - Edmonton, AB
  • November 7-8, 2016 - Saskatoon, SK
  • November 9-10, 2016 - Winnipeg, MB
  • November 14-15, 2016 - Mississauga, ON

VFD and Electric Motors Control Training

  • November 14-15, 2016 - Winnipeg, MB
  • November 16-17, 2016 - Saskatoon, SK
  • November 21-22, 2016 - Richmond, BC
  • November 23-24, 2016 - Edmonton, AB
  • December 5-6, 2016 - Mississauga, ON

Power Transformer Testing and Maintenance

  • November 21-22, 2016 - Mississauga, ON
  • November 23-24, 2016 - Winnipeg, MB
  • November 28-29, 2016 - Edmonton, AB
  • December 12-13, 2016 - Richmond, BC
 
Affiliates
 
Featured Product

Solid Brass Padlocks

Hercules Industries, Inc.
The complete line of solid brass padlocks at a very competitive price with two-week delivery...
... more
 
Advertisement
 
Latest Buyer's Guide Companies
Sign Up Today and Receive Our FREE E- Newsletter

E-newsletter service - Exciting industry trends, technical developments, product information, forums and electrical training courses.