1.5 ERMUSR 05-11-2021______________________________________________________________________________
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Michelle Canterbury – Executive Administrative Manager
MEETING DATE:
May 11, 2021
AGENDA ITEM NUMBER:
1.5
SUBJECT:
Recognition of the ERMU and MMUA Tom Bovitz Memorial Scholarship Award Winner
ACTION REQUESTED:
Recognition of the ERMU and MMUA Tom Bovitz Memorial Scholarship Award Winner
BACKGROUND:
At the April 13, 2021 Commission Meeting, it was announced that High School Senior Karl
Pederson was selected as the local winner of ERMU’s $500 Tom Bovitz Memorial Scholarship
Award. His winning essay was forwarded to Minnesota Municipal Utilities Association (MMUA)
judges for a chance to win an additional award through their statewide contest.
DISCUSSION:
The MMUA Tom Bovitz Memorial Scholarship Award winners were selected Tuesday, April 27.
Judges included five MMUA member utility representatives and one MMUA staff member.
Judges ranked their top four essays, point values were assigned and following winners were
selected:
• First Place: Geoffrey Skeim, Princeton
• Second Place: Karl Pederson, Elk River
• Third Place: Derek Brown, Rochester
• Fourth Place: McKenna Thompson, Sauk Centre
The first-place scholarship carries an award of $2,000, second place $1,500, third place $1,000
and fourth place $500.
The award is named in honor of the late Tom Bovitz, a firm believer in the value of education,
who was a former general manager of Hibbing Public Utilities and MMUA president. MMUA,
headquartered in Plymouth, represents the interests of the state’s 124 municipally-owned
electric and 33 municipally-owned gas utilities.
Steve Downer, MMUA Director of Communications & Member Services, will be attending the
May 11 Commission meeting virtually to present Karl Pederson with his certificate of
achievement for placing second in the 2021 MMUA Tom Bovitz Memorial Scholarship Contest.
The ERMU Commission will also have the opportunity to formally recognize Karl for winning
both the ERMU and MMUA scholarship award.
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FINANCIAL IMPACT:
$500 budgeted item.
ATTACHMENTS:
Certificate of Award – 2021 ERMU Tom Bovitz Memorial Scholarship Award
Certificate of Achievement – 2021 MMUA Tom Bovitz Memorial Scholarship Award
Essay – “The Many Advantages of Municipal Utilities” by Karl Pederson
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Tom Bovitz Memorial Scholarship Application
The Many Advantages of Municipal Utilities
Essay
Karl Pederson
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How are my utilities services provided? This important question is seldom asked. Can
you imagine a morning without electricity and water? Could you get started each day without an
alarm clock or the TV news? How about a coffee maker, stove, or water for the toilet and
shower? The benefits of these services is an obvious point. Still, our utilities are simply there
when we need them, and we rarely consider how we could manage without them. My area is
lucky to be serviced through Elk River Municipal Utilities, a public company with a rich history
in our community. Writing this essay opened my eyes to the contributions ERMU has made to
Elk River and to the many benefits municipal utility companies offer to customers throughout
Minnesota.
Private companies provide utilities to almost 1.5 million households and are by far the
most common form of utilities service in Minnesota. These corporations deliver a necessary
service while also striving for high profit margins that will please their shareholders.
Cooperatives and municipal utilities are other options for connecting services to consumers. Both
of these are non-profit organizations, though cooperatives often take a margin of their sales.
Municipal utilities serve approximately 357,000 citizens. Since municipal utilities are local
institutions, they generally serve a far smaller area than private corporations. Municipal utilities
are essentially owned and operated by the local citizenry.
Municipal utility companies are run by city councils or appointed commissions. Elk
River Municipal Utilities is overseen by two elected council members and three appointed
citizens. The members of this commission hold three year terms. Citizens can attend meetings
and speak with representatives about issues. Dates and notes from previous meetings for the
ERMU are listed clearly on the website. Private companies are far less transparent. Their board
meetings are almost always closed and notes available only to significant stockholders.
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Municipal utilities seek out their community's input and align their plans with the values and
desires of customers. Many municipal utilities make dedicated efforts towards accomplishing
long-term goals of importance for their community. For example, ERMU has begun giving
residents and businesses the option to receive energy from renewable sources. Also, they have
made electric vehicles more accessible to the community by offering rebates on chargers.
Commitments to clean energy programs like these are helping move our community to a more
sustainable future.
Another benefit of municipal utilities is cost. According to the American Public Power
Association, private utility rates were 14% higher than public rates on average. This may be
partly due to the fact that utility companies are natural monopolies. It is not practical and
probably not safe to have two power companies delivering service to the same area. Without
competition these companies are limited only by government regulated price ceilings. Unlike
non-profits, they have the additional expense of state and federal income tax. Since private
companies have an incentive to charge their customers more, public utilities save their
community money each year.
Quality infrastructure is paramount to good utility service. Cost-cutting measures by
investor-owned companies result in lower reliability and compromised safety. On the contrary,
public power is focused on providing quality services to their city for long periods of time.
Reinvesting in infrastructure is more likely with municipal utilities. The System Average
Interruptible Duration Index (SAIDI) shows that public-owned utilities have far fewer power
outages during the course of a year. In fact, the average time a customer went without power
while using municipal utilities was less than half that of the national average. The failure of
utilities infrastructure in Texas this past winter is an example of this and proved to be life
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threatening to many. Natural disasters and weather events such as this spotlight a need for
reasonable safety expectations in utility infrastructures.
As true stakeholders in their communities, municipal utility companies throughout our
state and nation answer to the specific needs of their consumers. ERMU has served the town of
Elk River and surrounding areas with expertise for more than 100 years. It first established
electric power for residents in 1916 by the creation of a dam and power plant at the confluence of
the Elk and Mississippi Rivers. ERMU has grown into a utilities provider of which this
community can be proud. Cost, safety, reliability and community partnership--the benefits of
municipal utilities are many. Elk River Municipal Utilities have been integral to the development
of my community. I am lucky to be both a customer and citizen owner.
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