Introduction

Pathways to Progress

Michigan South Central Power Agency, 1978-1998

On September 17, 1982, the Michigan South Central Power Agency, a municipally owned utility formed to serve five member communities, opened the doors of its brand new, 55-megawatt coal-fired electric generating station in Litchfield, Michigan. Over the next three days, citizens from Clinton, Coldwater, Hillsdale, Marshall, and Union City passed through these doors to view the machinery and meet the people who would soon be supplying power to light their homes, streets, offices and schools for generations to come.

   By mid-November, the plant went on line with the connection of its main generator to a 138,000- volt transmission system. On December 3, after a successful 24-hour test run at maximum capacity, the plant was declared commercially available. While not exactly "the shot heard ’round the world," the event enabled MSCPA’s five member communities to end their wholesale power purchase agreements with outside utilities and start down the road to energy self-sufficiency.

   This was the dream of the Agency’s founding fathers, all managers of municipal electric utilities, who envisioned the day when their community’s economic growth, jobs, and school budgets would no longer be dependent on an uncertain energy market to provide reasonably priced electric power.

   The Litchfield plant, later named in honor of original Board Chairman James Endicott, was the main instrument of that dream. Before construction of the Endicott plant, community-owned diesel and hydro generators were the only source of local power, supplying from three to thirty percent of total power requirements. The gap was filled with power purchased from two in-state investor-owned utilities, Consumer’s Energy and Detroit Edison.

   The Endicott plant has enabled MSCPA to fulfill its mission of providing member communities with reliable, cost-effective electric service. Since 1982, power supply requirements have grown more than 74 percent, from 310,211 megawatt hours to 540,427 megawatt hours in 1998. Similarly, non- coincident peak demand grew from 61.9 to 102.9 megawatt hours, an increase of more than 66 percent.

   Still, MSCPA continues to meet the needs of its industrial, commercial, and residential customers at rates generally competitive with or less than investor-owned or cooperative utilities.

   The availability of a ready supply of affordable electric power has given the Agency’s member municipalities the security and freedom to chart their own civic destinies. For the public, being served by an electric utility in which they are shareholders, run by a Board and officers drawn from among their neighbors, means that local energy policy will reflect their interests and concerns. This joint ownership adds to the already close connection that citizens commonly feel for one another–and their sense that these are special places in which to live, work, and raise a family.

   This history book documents the key issues MSCPA has faced in its second decade, a time when many of the underlying assumptions of the electric industry were challenged. As the local needs for power continue to increase, so do the demands from an increasingly complex technological, regulatory, and legislative environment.

   Today, deregulation of the electric industry nationwide promises a period of even more dynamic change.

"Offering customers the option to select their own electric supplier is a radical departure from the basis upon which our industry was founded," stated MSCPA Board Chairman James E. Spencer. "Changes in technology, especially information systems technology, will allow all customers to choose their electric energy supplier, just as they choose their long distance telephone carrier today."

   MSCPA has carefully monitored the ongoing policy debate on both the state and national levels, and actively participates in any decisionmaking process that could affect its ability to provide outstanding service to its customers. MSCPA has been diligently working to continue to be the supplier of choice for the consumers within each of member municipalities served.

   Whatever lies ahead, the past is prologue, and MSCPA’s record in meeting previous challenges inspires confidence in the future. To take a closer look at that record, this book focuses on three areas: technology advancements, strategic decisionmaking, and public policy advocacy in support of its vision.