An Overview of Brigham City's Electric Utility

Electric power in the U.S. is provided throughout the country by private utilities, like Rocky Mountain Power (RMP), and by municipal or public power utilities like Brigham City Public Power (BCPP), which purchases power through Utah Associated Municipal Power Systems (UAMPS). The power rates of private utilities are established by state public utilities commissions. The rates of municipal utilities are established by the elected officials of the respective cities.

Brigham City’s 20,000 residents and its commercial customers receive reliable and competitively priced electricity through 8,200 meter hook-ups from BCPP. State law requires that “enterprise services” cover all expenses (operating, maintenance, and long-term capital) from rates, fees, and deposits collected from customers. BCPP is a $16.4 million-per-year operation, and does NOT operate on tax money. It is a stand-alone operation based on user fees and power sales, and is required by law to distribute all operating expenses equitably among customer classes.

Profit generated by private utilities is returned to the owners and shareholders. In the case of RMP, the owner is Berkshire Hathaway, primarily owned by Warren Buffet. In contrast, profit generated by BCPP goes back to the taxpayers in the form of transfers to Brigham City’s General Operating Fund.

How Does Brigham City Public Power Benefit Brigham City Residents?

Brigham City Public Power provides significant benefits to customers and City taxpayers—at rates that are competitive to those paid by RMP’s customers. Some of these benefits are:

Access to less expensive sources of power. BCPP has long-term contracts for hydropower and other sources at locked-in prices.
A greater degree of reliability than RMP. More and more of BCPP’s system is being built underground. An aggressive tree-trimming program, dedicated power crews with quick response times, and an integrated system of smart meters that emails crews instantly when power goes out all contribute to greater reliability and better service.
Cost savings reduce taxes in Brigham City. Profits go back to BCPP’s customers in the form of lower property and sales tax rates through annual transfers to Brigham City’s General Fund.

Why Does Brigham City Transfer Funds from BCPP to the General Fund?

All properties in Brigham City pay for power, including those which are exempt from property and sales taxes, such as schools, non-profits, and churches. By transferring power profits to the general fund, BCPP provides a modest measure of equalization among Brigham City property owners. Without these transfers, Brigham City would either need to increase property taxes or decrease the level of service.

What are BCPP’s Power Sources?

BCPP enters into long-term contracts for power to cover baseload and anticipated peak loads.[1] These contracts are signed years in advance. BCPP’s least expensive source of power is hydropower purchased from the Colorado River Storage Project (CRSP), accounting for about 15% of the City’s total load. BCPP also buys power (and sells excess power) through a power exchange arrangement with the Utah Associated Municipal Power System (UAMPS). Finally, BCPP buys super peaking power, when necessary, on the spot market.[2]

What Challenges Does BCPP Face?

Whether an electric utility is private or municipal, it has one over-arching obligation to its customers: it must be capable at all times of delivering electric power to meet whatever the customer demand is at any time of the day or night—365 days a year, rain, snow, or shine.

The critical challenge for BCPP is matching the power supply with customer usage or demand as it varies hour by hour throughout each day. The highest level of customer demand or usage for BCPP is in the months of July and August, which can range from 20 MW to 42 MW on a daily basis.[3] The cost BCPP incurs for power changes hour by hour as well, with the highest demand, and thus the highest costs, occurring between 3:00 and 9:00 p.m. At times, a kWh can cost more than $1.00.

What About Solar?

On a typical summer day, solar panels produce their maximum between the hours of 10 a.m. and 4 p.m. Power is most available and least expensive during these hours because the marketplace where BCPP procures its power is flooded with excess solar-generated energy. But when demand skyrockets between 3 p.m. and 9 p.m., solar panels produce less and thus make less available to the BCPP grid. Prior to May 2022, BCPP was crediting solar-generating customers a minimum of 10.11¢ per kWh, but the value of that power when it was produced and available for use was often as low as 4.2¢ per kWh.

That is a great deal for the solar-generating customers, but not a very good deal for the other 98% of BCPP customers, who end up subsidizing the credit to solar-generating customers. BCPP was buying power it didn’t need, at a time it couldn’t use it, for more than twice as much as it could buy the power somewhere else. Currently, electricity cannot be stored in industrial-strength quantities. The technology just isn’t there.

BCPP currently has approximately 200 customers who have installed solar panels on the roofs of their homes, comprising 2.4% of BCPP’s customers. These customers made an investment in solar technology for a variety of reasons, but BCPP is still the electric provider of last resort when the sun isn’t shining, day or night. When the sun shines, these customers collectively generate about 1 MW; however, that power is mostly generated during the time of the day when it is least needed and least expensive to purchase at wholesale rates.

This is not a sustainable business model, and it doesn’t make sense for the other 8,000 BCPP residential and commercial customers, nor for Brigham City. BCPP cannot provide that kind of subsidy to solar-generating customers and remain in business. If all 8,200 BCPP customers generated solar on that same basis, BCPP as a utility would be bankrupt within a month.

Where Does BCPP Go From Here?

Nuclear Power

Due to the retirement of coal generation plants, utilities are having to rely more and more on gas-powered generation units to supply the reliable 24/7 power needed to keep the lights on. Long-term environmental and political strategies, however, are already targeting natural gas in both home use and power generation, leading to volatile prices. Through UAMPS, BCPP has committed to determine the feasibility of small modular reactor advanced technology, or nuclear generation. This project is promising, and if it is built at the Idaho National Laboratory site as planned, it will be a strong addition to BCPP’s power portfolio.

Renewable Energy

BCPP has investigated through UAMPS several renewable projects such as heat recovery, geothermal, and wind projects. So far, these projects have not been economically practicable, and large gas suppliers are reluctant to allow waste heat projects on their lines. Brigham City continues to investigate any and all potential reliable and clean sources that would benefit Brigham City electrical consumers.

Net Billing

Beginning August 18, 2022, BCPP solar-generating customers will be subject to a process called “net billing.” Net billing measures kWh going into a customer’s home from BCPP, and kWh going out of that home to BCPP. The power going into the home is sold to the homeowner at the same price per kWh as to all BCPP residential customers. The power generated by the customer that goes into BCPP’s grid is currently credited at 4.7¢ per kWh.[4] Net billing allows for a more competitive rate during the time of day that it can actually be used by BCPP.

Some solar companies have complained that net billing will drive solar power out of Brigham City. This is not the case. Even so, BCPP’s primary obligation is to the taxpayers and customers in Brigham City and not to the makers and sellers of solar panels. The current system does not make economic sense even on a small scale, and would be outrageous to the other 98% of BCPP’s customers and Brigham City taxpayers on an even larger scale.

What About Current Solar-Generating Customers?

BCPP grandfathered the solar-generating customers who were installed or had a completed application by August 18, 2022. BCPP will continue to experience revenue loss from subsidized solar-generator credits to these customers in the following ways: (1) payment for both contracted power and solar credits, essentially paying twice for the same power; (2) loss of operations and maintenance revenue; and (3) loss of municipal energy tax revenue.

BCPP still has to serve all of its 8,200 customers, and it still has to secure a base load power that will keep the lights on all the time, with or without sunshine. It still has to maintain the distribution system. Net billing does more to keep rates fair for everyone.

Some have argued that net billing is an effort by BCPP to prevent solar-generating customers from using “free” solar power. That is misleading. However, if a homeowner or business wishes to become both a BCPP customer and a co-generator via solar power, then BCPP is obligated to ensure the arrangement is fair to both solar-generating and non-solar-generating customers.

The staff at BCPP is available to respond to questions or provide additional detail about our operation. Please contact us at 435-734-6625.

[1] Baseload is the amount of power BCPP needs to have available to meet average customer demand. At times, and especially during summer months, those needs increase dramatically. This is known as peak load.

[2] Wholesale power markets allow utilities to buy peaking power on an hourly basis for whatever the on-the-spot price is.

[3] 1 Megawatt equals 1,000,000 watts or 1,000 kilowatts. A 15-watt light bulb draws 15 watts of electricity any moment it’s turned on.

[4] As of November 22, 2022. Rate is subject to adjustment by the Brigham City Council.