By Mike Hyland
Executive Director, NEPPA
My mother was a diehard baseball fan. Not surprisingly, she was a Philadelphia Phillies fan, and never missed a game – either in person or on the radio. My Mom graduated from Philly West Catholic in 1950, the year of the Phillies ‘Whiz Kids’ that won the National League pennant and lost to the dreaded Yankees in the World Series. I have fond memories of growing up in a house where the voice of the Phillies radio announcer Richie Ashburn was as familiar to me as any of my other eight family members. Richie was a member of the 1950’s Whiz Kids team and went on to broadcast the games from 1963 to 1997. I was amazed at how he would get so excited over each and every hit, strikeout or home run. Like many fans, my mom would talk to the radio as if she was having an actual conversation with Richie himself. On any given day, an error would be made by a Phillie – Richie would in turn exclaim his loud dismay of the Phillies loss, and my mom would “talk” to Richie. “Richie, it’s a long season. It’s just one game.” Just one game indeed. In Major League baseball, the current schedule of 162 games allows a team to win just 62% of its games and still attain 100 wins in a season. 100 wins guarantees you a spot in the playoffs. But remember – your favorite team also lost 62 times! As my mom periodically talked her invisible friend Richie off the ledge each week, the concept of looking at the longer season results sank into my developing approach to life. I learned the golden rule – it’s a long season. Prepare and play for the season, not just opening day.
I moved to APPA in 1996 and encountered a man who became one of my most impactful mentors in public power, Mr. David Penn. He had a diverse background from federal government service at the NRC, DOE and FTC, to becoming the first manager of the Wisconsin Public Power joint action agency. He had two degrees in economics, but his real love was golf. He played NCAA golf for the Wisconsin Badgers and even caddied for Jack Nicklaus in a pro-am tournament. When he discussed the long game, I had to ask whether we were discussing his use of old persimmon wood drivers on a par five hole or were we talking about his view on municipal finance. He was masterful at explaining either scenario. I loved chatting with him about his views on the economy, the strengths and weaknesses of the utility sector, and in particular, the future outlook for the 2000+ municipal electric systems operating throughout the United States. We discussed economic theories I did not learn in engineering school, such as the Herfindahl–Hirschman Index (HHI) explaining market share in any product or service, including electricity. We discussed the value of municipal electric utilities to their communities and when I asked about additional resources to expand my knowledge, he recommended a bunch of further readings, but two books still come to mind. The first book was the ‘Extraordinary Popular Delusions and the Madness of Crowds’ by Scottish journalist Charles Mackay, first published in 1841. The intent of MacKay’s book was to shoot holes in the financial mania and economic bubbles that sometimes produce a get rich quick idea, especially when backed by a crowd of like-minded people. The second book was the ‘Art of the Long View’ by Peter Schwartz. Schwartz’ book promotes the idea of a longer view of your organization, not just based on profit numbers but more on the intangibles such as the impact the company has on the employees and community. Interesting that although written 150 years apart, both authors promote focusing on the longer view of the value of an investment, and not focusing on the shiny new nickel and get rich quick schemes. As Mr. Penn hammered into my mind – the value of a municipal electric distribution system increases over time, not decreases.
Attacks, criticism, threat of sales, etc. occur towards the municipal segment of the electric industry on a regular basis. When I worked at APPA, I was amazed at the number of occasions where we would hear of a city council, mayor, or other appointed or elected officials asking for a review or analysis of the benefits of selling the municipal electric department. The list of communities that have examined the sale of their utility is long, some recent notables being Lafayette, La; Jacksonville, FL; and Santee Cooper, Sc. In each and every study (and I’m talking 10’s of studies) keeping the electric department is the best option, every time, bar none. The short-term bubble gains never outweigh the long term benefits to the community. Public power has verifiable advantages: Lower cost, local control, more reliable, and a focus on main street, not Wall Street. In fact, many areas of the country that are looking for more control of their utility future are examining public power as an option. From Maine’s Public Power initiative to New Hampshire’s Community Power Coalition, municipal voice and ownership are on the table for evaluation.
As my mom told Richie Ashburn more than once: It’s a long season. For those of us working in Public Power, we need to weather the current storm and focus on the long view. Our communities deserve nothing less.
Sincerely,
-Mike
Executive Director
NEPPA