The Values of Joint Action Agencies
Joint Action Agencies are a tool that municipal distribution utilities can use to accomplish their goals of reliable, safe and low-cost electric supply and services to their communities in an efficient and effective manner. Shared costs and mutual support make the effort manageable and provide an effective interface to the ever-growing complexity of the US electric power supply industry. Efficient wholesale power supply cost also helps protect the municipal distribution utility margins that support community budgets.
Beneficial Aspects of Joint Action Agencies:
Resources: The electric utility industry now more than ever requires highly educated, talented and experienced people and sophisticated tools to capture data and intelligence; observe, analyze, and prioritize trends and developments, and make informed decisions about which tactics to utilize and which direction to steer an electric utility. Municipal electric utilities typically cannot justify to their governing body the cost of these resources or cannot attract such resources to their organization. Joint Action Agencies are the ideal construct to gather and effectively utilize the required resources in an efficient manner.
Shared Costs: Do it once rather than multiple times, and share the cost based on a member’s ability to contribute. Resource acquisition, intelligence gathering and continuous training efforts to maintain skills and knowledge are expensive undertakings; often well beyond the capabilities of a single municipal utility. Joint Action Agencies can provide the necessary products and services in a manner that is cost-effective for every member.
Focus: Municipalities have their people and resources spread thinly over multiple areas of responsibility, which can cause loss of focus on critical operations. Joint Action Agencies have one focus: efficient, reliable, lowest cost power supply and energy services to members. Small mistakes in the electric utility industry can cost millions. The focus created by dedicated Joint Action Agencies is even more important now as the complexity of the electric utility industry increases.
Size matters: Small municipal distribution utilities have a difficult time getting the attention of a power supplier because of the relatively small amount of energy they require. Aggregation of electric power supply requirements through a Joint Action Agency results in larger blocks of aggregated energy requirement, which allows efficient resource provision by either more efficient design of right-sized self-supply generation resource additions, purchasing power from the market, or an optimized energy portfolio utilizing both self-supply resources and market purchases.
Common Cause: Municipal electric utilities have often tried to align with other entities such as investor-owned utilities or external contracted service providers, often with unsatisfactory results due to conflicting goals and values. A Joint Action Agency is created from the aggregating members and is governed by representatives of those members. Highly democratic governance by like-minded individuals with aligned values and viewpoints working together make for effective and productive results.
Image, Reputation and Communication: External entities, whether State and Federal governments, regulators, or financial institutions, view a well-run central aggregated entity, such as a Joint Action Agency, with more credibility, respect and relevance than they do with a single small municipal electric utility. The ability of a Joint Action Agency to communicate, educate and articulate needs to external entities is strengthened by the single unified message from the Joint Action Agency. Additionally, a well-run Joint Action Agency; using economy of scale, efficient generation operations and portfolio optimization; will earn improved reputation and credit worthiness ratings.