What it’s like to run an electric utility as a city

‘It's important to have your local officials setting the policy’

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ROCHELLE – Rochelle City Manager Jeff Fiegenschuh estimates about 70 percent of the city’s work involves Rochelle Municipal Utilities. 

The city-owned service is one of around 30 in the state that has its own electric utility and serves Rochelle and the surrounding area. The city’s overall proposed budget next year is about $85 million. Fiegenschuh said just over $60 million of that is utility-related and a good portion of his job is related to utilities. 

“One of the things I like most about my job is running the utilities,” Fiegenschuh said. “It's fascinating because you're running a government and running a business. The utilities need to be run like a business. I get the best of both worlds. I don't know if I'd ever want to be in a town where we didn't own the electric utility.”

Fiegenschuh said locally-owned electric utilities are more commonplace outside of Illinois. He grew up in Nebraska, which is entirely a public power state. In his career as a city manager, he’s always had the opportunity to have an electric utility within city government with the exception of two towns. 

For Fiegenschuh, running a utility service is a fascination and he’s found it to be the “best” and “most fun” part of the job. It was one of the things that attracted him to Rochelle. 

“I like local control and I think it's important to have your local officials setting the policy instead of somebody who's not from the community and who's driven by profits making those decisions,” Fiegenschuh said.

Fiegenschuh said the biggest challenge in running the utility has been a lack of investment in infrastructure over the years and “trying to play catch up.” He said he’s conscious of keeping rates low and providing cost effective power. 

Former RMU Electric Superintendent Jason Bird started the process of reinvesting in infrastructure and current Utilities Superintendent Adam Lanning and Superintendent of Electric Operations Blake Toliver have carried it on. Fiegenschuh said the electric utility has really been “turned around” in the past six years as far as infrastructure. 

“People not only want to have cost effective rates, but they want reliable power,” Fiegenschuh said. “The only way to guarantee you have reliable power is to reinvest back into the system.” 

Benefits of having a local electric utility include having a local office for customers to work with rather than calling a 1-800 number. Another benefit is local officials having the ability to do things like reducing or eliminating late fees during a situation like the COVID-19 pandemic when things were more financially dire for residents. 

Fiegenschuh said RMU’s electric outage times are lower than ComEd’s, which is the largest electric utility in Illinois. RMU also has the ability to generate power locally if any parts of its system goes down to keep lights on. During the hotter parts of summer, generating locally reduces RMU’s overall power costs. 

RMU has the ability to create programs for ratepayers that wouldn’t necessarily be possible with an investor-owned utility. It recently took part in a demand response program where ratepayers are paid to reduce their usage during peak times to save load on the power grid. 

The city can also use the local utility as a bargaining tool to attract businesses to town that will use large amounts of power. 

“If a company comes to town like Project Jackpot and says it needs this much power, we're not waiting for an investor-owned utility to come in and make their decisions,” Fiegenschuh said. “We get to make those locally. We control our destiny when it's a huge economic development tool."

Each fiscal year, the city transfers 5.5 percent of its previous year’s audited revenues from its utilities into its general fund, Fiegenschuh said. That accounts for about 21 percent of its general fund budget and helps pay for expenses like police, fire, streets and administration. 

"Having our own utility absolutely makes us more financially able to do things,” Fiegenschuh said. “We just have more revenue coming in to run our city. Those dollars stay in our community and support our local public safety people and our local electric utility reinvests back into the infrastructure and that's why we can make sure we have the lights on."