|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Q. Why was the
Alabama Municipal Electric Authority formed?
In the 1970s wholesale electricity prices were
spiraling out of control. Alabama law would not permit municipal utilities
to jointly own or purchase power. Members of the Municipal Electric
Utilities of Alabama began to seek legislative approval to form a
collective buying unit.
It wasn’t until May of 1981 that a bill was
passed and sent to Governor Fob James for signature. On May 18, in the wee hours of
the night, the governor signed the legislation that allowed Alabama
municipal electric utilities to form the Alabama Municipal Electric
Authority.
Top of Page |
| Q. Who runs the Alabama Municipal
Electric Authority?
AMEA is owned and governed by its member
communities. It has a nine-member Board of Directors, each serving
three-year terms. Three terms expire each year.
An Election Committee composed of one delegate
from each AMEA member elects the Board of Directors. At present, each
elector has one-vote and a proportional amount of eleven votes based on
the percentage of electricity the member bought from AMEA during the
preceding calendar year. No member can have more than one Director on the
Board at the same time.
The Board of Directors hires the President and
CEO who oversees daily operations and hires additional staff, as needed,
to carry out Board authorized activities.
Top of Page
|
| Q. Are board members paid?
No. Board members can be reimbursed for expenses
incurred associated with AMEA business.
Top of Page
|
| Q. What is the principal purpose of the
Alabama Municipal Electric Authority?
AMEA’s principal purpose is to secure reliable
and economical electric capacity and energy for its members. AMEA monitors the
short-term and long-term marketplace to meet that goal. Whether it meets
the goal through firm and nonfirm contracts or generates power from its
generating units or combines all of these avenues, AMEA meets the goal.
Top of Page
|
| Q. Is securing power the only activity of
the Alabama Municipal Electric Authority?
While securing reliable economic power is
AMEA’s principal purpose, the enabling legislation under which it was
formed allows it “to exercise any power usually possessed by private
corporations performing similar functions . . .”
The Board uses a three-point criterion to decide
whether to add a service. 1) The service can’t hinder AMEA’s principal
purpose, 2) it must be needed and used by all members, and 3) it can be
provided at a cost lower than a member could obtain if acting alone.
For example: A few years ago, several members
were interested in installing or upgrading Supervisory Control and Data
Acquisition systems. They asked AMEA to see if there would be any
economies of scale, if AMEA purchased the systems for the members.
Combining the needs proved to be so cost effective that all eleven members
now have SCADA systems with a hub in the AMEA office. Combining the need
for this cutting edge technology made it affordable for all eleven
members.
Folded into the SCADA system is another important
AMEA service and that is Load Management. Shedding load during times of
high electric usage helps keep cost of electricity at the lowest level
possible.
Another example: Hometown ConnectionsSM
solicits vendors who can provide products and services at discounted
prices to the 2000+ public power utilities in the United States. The
Authority was the first Sales Affiliate to join HTC. The relationship
proved so beneficial for AMEA and its members that when the opportunity to
become a part owner arose, the Board purchased a 35% equity interest in
HTC. The move to become a part owner has proven to be a wise choice.
AMEA participated in research efforts to
successfully bring the molten carbonate fuel cell to market. The molten carbonate fuel
cell is an environmentally benign generating system that will allow
generation to be placed near the site of use.
AMEA and its members also participate in the
American Public Power Association’s Demonstration of Energy-Efficient
Developments. DEED is a research and development group of municipal
electric systems.
Top of Page
|
| Q. Has the Authority met its mandate to
provide economical wholesale electricity to its members?
At the close of fiscal year 1987 the average cost
for power delivered to the members was 38.01 mills per kWh. As of
September 30, 2005, the unit cost was 43.74 mills/kWh. Corrected for the
Consumer Price Index; AMEA’s power cost is still significantly lower than
the average cost per kWh in Fiscal Year 1987, AMEA's first full year as
a power provider. Even in these times of rising fuel costs, AMEA's
average annual increase has been less than 0.8% per year.
Top of Page
|
| Q. Does Alabama Municipal Electric
Authority generate any power?
AMEA’s current Power Supply Agreement, which became effective on January
1, 2006, allows for a great deal of flexibility in the way power is
supplied to the Members. In anticipation of that agreement and in
response to a very favorable secondary market, in 2003 the AMEA Board
approved the purchase and installation of two 47.5 MW peaking
generators. Those units, the AMEA-Sylacauga Plant, were placed into
service in May 2004. This is AMEA’s first and only generation facility.
AMEA Sylacauga is the first municipally-built facility in more than 80
years.
Top of Page
|
| Q. Why do some municipalities have electric
utilities and others do not?
That choice is made by the city or town. Some
communities choose to purchase or construct their own electric
distribution systems in order to locally control the delivery and cost of
this vital commodity for their citizens. Many of AMEA’s members have
provided electricity to their citizens for over 100 years. In the early
1900s, cities either provided electricity for their citizens or they did
without!
Due to the [Alabama] Territorial Act of 1984, cities that were not
providing electricity on that date do not have the privilege of choosing
to provide electricity to their citizens today.
Top of Page
|
| Q. What is the difference between AMEA and
an investor-owned utility?
AMEA is a not-for-profit entity created to
provide its members with reliable, economical power. Investor-owned
utilities are for-profit entities that exist to make a profit for their
shareholders.
Top of Page
|
| Q. Does the Alabama Public Service
Commission regulate AMEA’s rates?
No. Its Board of Directors oversees AMEA’s
rates.
Top of Page
|
| Q. Who oversees the rates of
municipalities’ electric utilities?
The municipal governing body or, in some cases, a
board appointed by the governing body and/or elected by the citizens.
Top of Page
|
| Q. What is AMEA’s position on electric
deregulation/reregulation/customer choice?
AMEA supports the concept of electric
deregulation/retail competition provided it is structured to assure the
opportunity for low-cost, reliable energy service to ALL customers and
customer classes.
In order for retail competition to work for the
benefit of consumers, there must be a sizable pool of electric suppliers
that fosters competition between suppliers and choice among customers.
There must also be adequate transmission lines and connections to handle
the flow of electricity from place to place. At this time, the
transmission infrastructure ― owned and operated by several
different for-profit and not-for-profit entities ― is not adequate to support a fully
deregulated market.
AMEA is working with entities at the federal and local level to ensure
that the transmission system will be adequate and robust enough to
support a competitive wholesale market place.
Another challenge to a deregulated market is the
issue of market power. Market power exists whenever ― due to size or
economic clout ― an established utility can prevent the development
of competition in a service area. AMEA is active on both the national and
state levels where laws are being developed that will affect how municipal
electric systems may deliver electricity to their citizens.
Top of Page
|
| Q. What is the status of customer choice in
Alabama?
The Alabama Public Service Commission held public
hearings and took written testimony from all parties who wished to
participate. After review of all information provided, the PSC concluded
that retail choice was not in the best interest of Alabama citizens at the
present time. Hence, Alabama was spared the pitfalls of a rush to
deregulate that landed in full force on the citizens of California. As you
have read, the flawed market structure in California led immediately to
blackouts, price spikes and market manipulation.
Top of Page
|
| Q. What is AMEA doing to ready itself for
competition?
AMEA negotiated its current power supply contracts to allow AMEA more
flexibility in supplying its members with their firm electricity needs.
AMEA constructed and operates a two unit gas-fired generating plant,
called AMEA Sylacauga. The AMEA Sylacauga Plant came on line May 1,
2004. This peaking plant is one of the most efficient in its class of
generators and provides an energy cost hedge for AMEA.
Due to the volatility and uncertainty of the market in the near future, AMEA
is positioned to be flexible in its operation and power supply stance.Top of Page
|
|
Do you have a question that has not been answered? If so, email us at
lmiller@amea.com. Media
representatives may call (334) 262-1126 Ext. 118 if you are meeting a
tight deadline. We will make every effort to supply a prompt answer.
All retail customers of AMEA’s 11 members receive a bi-monthly edition
of Alabama Currents. The magazine supplies information about the
current status of electricity issues and local news about AMEA members.
The AMEA Board of Directors wants all customers to be informed
customers.
Top of Page
|
