Small Town Finds Its Little Utility Quite Empowering

The price of Easton's electricity is set in the wholesale market, where a megawatt of power was at one time based on what it cost a coal, nuclear, natural gas or diesel plant to produce it. Now, the price is set by expensive peaking plants such as Easton's, the last generators called into service on hot days. It's a windfall for the town: On Aug. 8, 2007, the price of a megawatt of power spiked to a little more than $1,000 for one hour in the Easton area. The plants were running. The profit allowed Easton Utilities to save its customers 25 percent on their electric costs that day.

Its diesel generators produce 5.5 percent of Easton's electricity. Like Pepco and BGE, the town buys the rest through long-term contracts with energy suppliers. Rising fuel prices have pushed up bills in Easton as in the rest of the Washington region. But the nonprofit municipal system does not mark up prices.

And it is reliable: When a massive power outage left the Delmarva peninsula in the dark one night seven years ago, Easton used batteries to fire up its engines. The lights were back on in 39 minutes, but they stayed dark for about eight hours elsewhere.

"We had the only streetlights along Route 50 that were working," Mayor Robert C. Willey recalled.

About 2,000, or 14 percent, of the country's power plants are municipally owned, and a small number are run by nonprofit cooperatives. Like most other municipal power plants, Easton's was built out of economic necessity: Private companies were bypassing rural areas where homes were too far apart to run power lines and still make money. The Rural Electrification Administration finished the job during the New Deal.

About a third of the country's municipal power utilities make their own electricity. According to the American Public Power Association, those customers pay about 13 percent less on average than those served by private utilities.

When the cable television industry exploded in the 1980s, it looked like Easton would be bypassed again. Service to rural areas was not cost-effective. So the utility went into the business, laying 120 miles of cable. The town owned the valuable telephone lines and now offers its own Internet service.

It's hard to miss the power plant on Washington Street. But not everyone knows it produces such a valuable commodity.

"People tend to take things for granted when they work pretty well," said John Lopes, a retired analyst for the Department of Defense. The people the utility sends "stop at the door and take their shoes off."