How Municipal Utilities Can Address
Surging Power Demand

Over the course of my 16-year career in the energy business, I’ve spent a fair amount of time in conversation with municipal utility managers. Here’s the key thing I’ve learned: As individuals, you’re as different as the communities you represent — small/large, conservative/progressive, rural/urban. But as a group, you’re united around a common purpose, keeping the power on and the price reasonable for those you serve. The fact that your customers are your families, friends and neighbors probably drive much of that accountability.

Unfortunately, for many municipal utility managers I talk to, it’s getting tougher to continue providing the highest levels of reliability, service, and value. Customer preferences are changing. Some want 100% renewable power overnight; others simply care about cost. Other challenges are mounting, too: New technologies. Increased regulation. Workforce shortages. Budget constraints. And perhaps biggest of all, rising demand.

The big question: how can you address it? Here are four strategies I’ve seen other municipalities employ to tackle the challenge — and start seeing results fast.

Strategy #1: Upgrade existing assets

The Challenge: Colby, Kansas, is a growing city of 6,000 residents and a regional hub for healthcare, shopping, entertainment, and education. The city is connected to grid power but still operates a public power plant built in 1910 for backup needs. The equipment inside was old and outdated, requiring lots of time and manual labor to maintain and bring online.

The Solution: Colby Public Power team invested in new, easy-to-maintain generators compliant with current emissions standards and electronic controls to start them up with the push of a button.

The Outcome: When Winter Storm Uri hit the area in 2021, electricity costs soared. Colby started up its updated power plant fast, saving the community about $1.7 million.

Strategy #2: Plan ahead to combat rising costs and emissions targets

The Challenge: Reading Municipal Light Department (RMLD) serves 80,000 residents and 3,000+ commercial and industrial customers in the Boston suburbs. The utility expects its electrical load to double over the next 25 years and is rethinking how power is generated since the Massachusetts climate bill calls for zero emissions by 2050.

The Solution: RMLD implemented a series of gas power generation assets with Distributed Energy Resource Management software which remotely monitors energy system signals and predicts opportunities to reduce costs.

The Outcome: The solution has led to $4 million in net savings to customers.

Strategy #3: Bridge the gap between traditional and renewable power

The Challenge: Deseret Power is a regional generation and transmission cooperative in Utah, where long-term drought conditions have limited the amount of hydroelectric power available.

The Solution: Needing additional sources of generation, Deseret Power broke ground on a 15 MW solar project along with a 15 MW power plant fueled by natural gas generator sets.

The Outcome: Operated remotely from 400 miles away, this “virtual” plant delivers fast, flexible power in a volatile market. It serves as a backstop when renewable power isn’t available due to weather. And Deseret Power can bring the plant online instantly to help mitigate changes in industry pricing or address a transmission outage.

Strategy #4: Pilot new energy solutions to prove out the benefits

The Challenge: Liberty’s utility operations span the U.S., serving more than a million customers nationwide. With increasing energy consumption, Liberty wants to implement alternative solutions to ensure resiliency.

The Solution: In New Hampshire, the utility is piloting battery storage to reduce peak load during high-demand times, provide backup power during outages and offer customers time-of-use rates. For the pilot, Liberty installed 2,600 kWh of lithium-ion battery storage at 100 homes to charge overnight when demand and rates are low. A distributed energy resource management system analyzes the energy industry then dispatches power from the batteries when it makes the most financial sense.

The Outcome: Liberty is saving more than $180,000 annually — and participating customers are seeing their monthly utility costs drop $60 on average, too.

Sounds good? What’s next for you?

At Caterpillar, we’ve been helping municipal utilities deliver reliable, cost-effective power solutions for decades. In recent years, that’s included several projects like the examples shared above. Our team of experts works in the background to meet your goals, while you maintain that all-important direct relationship with your customers. We’d love to discuss your goals and challenges, then talk about a plan that could deliver resiliency, revenue and possibly even carbon reduction for your community. Click here if you’d like one of our experts to contact you.